For Broadcast August 20, 2009

The internet mantra of “everything must be free” has been questioned for some time now. The music industry has tried (and is still trying) to work out ways to charge for songs that suit both consumers and record labels. Michael Grade recently said micro-payments for the likes of clips of Britain’s Got Talent could begin next year. But figuring out the business model for any kind of online payment has not been an easy road for traditional content creators and now the newspaper industry is trying to tackle the problem.

Newspapers have been decimated by a double whammy of an ad recession and an online revolution. Sound familiar? That’s why the TV world should be watching what newspapers do. Besides that, one of the biggest newspaper empires in the world, News Corp, also happens to be the biggest single stakeholder in BSkyB.

Newspapers have been struggling with the internet and particularly with Google, which is hijacking newspaper content for little or no remuneration. Like the music business, newspapers have realised that some kind of charging is necessary if they are to survive. But how much will the punter pay? And what will they pay for? Perhaps most importantly, how will the newspaper industry’s relationship with its advertisers develop?

One answer is Journalism Online, begun by a trio of industry veterans including ex-top cable TV executives Steven Brill and Leo Hindry, which earlier this week said it has signed up 500 newspapers to a variety of charging models (they say some 16 models are being tested) to be launched this autumn. Electronic payment systems will aggregate the papers’ content and charge for it. The hope is that the relative success of paid-for newspaper content online from the Wall Street Journal (owned by News Corp) and the Financial Times, can be replicated to other, less business-critical papers.

The TV business is complicated by the complex ownership of TV programmes. How do you split the spoils - assuming there are any - between the broadcaster/commissioner and the producer/creator?

Fremantle Media boss Tony Cohen has already said that micro-payments as low as 5p are the way to go for TV, rather than the iTunes model of a relatively high charge per song. Certainly there is room for micro-payments, particularly for clips, but there may have to be a “series price” or some kind of bundling longer shows to make it significantly remunerative for the broadcaster/producer to be interested. The point is to avoid charging too much, or giving it away too cheaply.

But perhaps the first hurdle is who will control the distribution point online? MSN’s quiet launch of its online video offer is a challenge to others like the promised UK launch of Hulu.com as well as Arqiva’s plans to create a UK online TV destination site out of the assets of Kangaroo. And Canvas will need to wrest itself free of the BBC Trust and Sky and Virgin’s whingeing if it is to become a common UK platform.

The newspaper industry might have problems - but at least it’s got a lead on TV when it comes to online distribution.