Tuesday, April 19, 2005

Beginning of the end for free content

In a move that could spell the beginning of the end of unlimited free content on the web, the Associated Press has decided to start charging its members for using its stories online, just as it always has charged for material in print and on the air.

In so doing, the AP may force newspapers, broadcasters and other traditional news outlets to discontinue history's longest-running free introductory offer: The free use of all the material produced daily by most news organizations.

"The need for online licensing is clear," says Tom Curley, the CEO of the media-owned news co-operative. "For the Associated Press to endure during this digital transition, we must be able to preserve the value and enforce the rights of our intellectual property across the media spectrum."

When the new policy goes into effect on Jan. 1, the AP license will be a new cost for the newspapers and broadcasters who already spend prodigiously to gather and publish the "complimentary" content they provide on their web sites. With the notable exception of the Wall Street Journal and a few other newspapers, most media companies publish their entire daily report on the web for free.

Although the AP license undoubtedly will be modest in comparison to the other production costs shouldered by the media companies, the pain of writing the check -- and the principal articulated by Tom Curley -- likely will motivate publishers to reconsider their long-term generosity. Accordingly, it is fair to predict that at least some of today's complimentary content will carry a pricetag in 2005.

About 300 commercial web sites, including popular destinations such as Yahoo, AOL and MSN, already pay for the use of AP content, according to the news organization. The AP reportedly is discussing a licensing agreement with Google, which earlier this year was sued by Agence France Presse for using its content without paying for it.

Although most of the legacy media companies are afraid of being the first to start charging for their valuable product, some 40 of the nation's 1,456 daily newspapers have tried it -- with mixed success.

:: The Wall Street Journal, the most successful paid site with 731,000 subscribers, charges print subscribers $39 a year to read its web site and requires online-only users to pay $79 annually. Revenues approach $40 million a year.

:: The Spokane (WA) Spokesman-Review allows print subscribers free use of its web site, but charges online-only readers $7 a month to get beyond the headlines on its home page. The primary aim in charging for the site is to encourage subscription to the print product, according to Ken Sands, its online publisher. To date, the newspaper, whose print circulation is a bit more than 100k, has added about 550 new paying subscribers. Because traffic to the site dropped when the newspaper started charging, advertisers were nervous, reports Ken. But he plans to introduce more unique and compelling content to the site to build traffic.

:: The Los Angeles Times permits free use of its online news, but restricts certain features in its entertainment section to either print subscribers or online-only users who pay $4.95 a month. Because traffic to the site has declined, the paper is reviewing the decision to charge for it, according to the New York Times.

:: Most newspapers charge a nuisance fee of $2 or $3 to retrieve old articles and clippings in their archives. This is required by the contracts the larger papers have with such database services as Lexis-Nexis, which charge for use of their services. As the industry moves toward charging more widely for the use of content, it is to be hoped the mugging or morgue readers will cease.

So long as a number of major news sites continue to provide free access to their content, none but the bravest publishers will bolt from the herd. In taking the first step on behalf of the legacy news industry, the AP not only is clearing the way for its members to act but also emphasizing dramatically that the new media are the future of publishing.


Post a Comment

<< Home