Google News fast payment flip

This topic was one of relevance to the MarketingMag community as there is a combination of paid journalists and guru bloggers who create the content you read and Niche understands that search traffic is an important element of attracting an audience.

One of the biggest changes to shake up online media consumption has been the recent announcement by Rupert Murdoch to charge for access to all his news websites from 2010.  This free-for-all model is planned to end for all News Corporation websites this financial year joining the Wall Street Journal fee for access model.

This follows a very aggressive previous move by Associated Press to take legal action against websites & blogs that use its articles without legal permission.  While these seem more focused at trying to slow the dependence on Google News & Blogs it appears similar to the music labels heavy handed approach to piracy.

While the issue is around critical mass is key to any successful online platform, if Google News already offers 4,500 news sites to consumers why change? Part of the issue has been the claims that Google News cannibalises the potential advertising revenue and then further devastated publishers by placement of ads next to their headlines and article snippets.

The recent move towards paid content by large media groups was accelerated with Journalism Online reportedly signing up 176 daily newspapers as potential clients for its service but was far less than the initial claims of 500 newspapers that showed expressions of interest.   The Journalism Online business model is fairly profitable as it revolves around commission of 20% paid on any subscription fees paid.

The twist to this happy ending is why would News Corporation move away from dependence on Google News to become dependant on Journalism Online? News Corp has the option of pushing towards the formation of its own content consortium because of its global operations and established regional nameplates. News Corp appears to have stayed away from US centric technologies such as Amazon Kindle (uses Whispernet EVDO) so what is planned next?

The issue here is not around if journalist should be paid for great content but online access to that content. The problem is the mix bag of complaints about revenue from placement advertising not reflecting the quality of the content and maintaining total control of content.  Some media groups such as Tribune Interactive have been very aggressive in trying to draw as much traffic from sources such as Google while others seem to be giving up.

The only true media platform that has had the ability to attract large numbers of people willing to pay for music has been iTunes.  Much of the success is around the simple “one-click” micro payment system they offer consumers demonstrating that such a micro payment solution has potential but needs to be centralised.

A recent request from the Newspapers Association of America for proposals of how to best charge for content online received 11 applications including Google & Journalism Online.  The interesting point is although Google will likely expand their Checkout payment system to cover micropayments they still do not see this as the key driver of revenue.

The reason why Google don’t see micropayments as a major source is because they have an established Adsense/DoubleClick platform that will likely continue to be the key driver of revenue sharing with the content providers.

The recent launch of a new Google labs product “FastFlip” has re-ignited the interest in how Google can deliver a better media product for consumers and keep media providers happy.  The initial tests show how new the product is with only limited sharing options with a FriendFeed “like” rating button and a disappointing lack of customisation of news feeds.

FastFlip has already showed that it is more suited to magazine/book publishers as the screen shots allow articles to be partially read but the real issue is that the screen shots don’t allow the content providers ads to be displayed. This method used to present the articles seems to re-break the advertising model and place content providers back at square one.

The new format also shows limitations of contextual placement of advertising with those shown do not appear to be relevant to the article and only partially relevant to the category.  The ability of Google to generate revenue for FastFlip but at the cost of the publisher’s ads will likely require more generous revenue sharing agreements.  This screen capture is likely to become a larger issue as it may exceed fair use claim used in the past to allow Google News to display snippets and article titles.

All this experimentation is healthy for the media industry a consolidate approach that combines display ad revenue and micro-payments seems to be the best solution long-term.