The price of news

Enjoy getting content online for free? Cancelled the newspaper subscription? Well, you might be putting your hand in your pocket again. Mainstream media publishers have spent most of this year threatening to lock up their content behind pay walls, partly blaming Google for the parlous state of their finances.

Now Google is exploring ways to prevent the backlash and is looking at developing a micropayment scheme that would allow users to buy digital content through an online payment system.

Nothing has been officially announced but Google has explained in a letter to the NAA that micropayments could be a payment vehicle to both Google and non-Google properties within the next year.

The idea is to charge the reader very small payments that would be aggregated across different publishers over time and collected by Google. The merchant system would be very simple and Big Brother Google would keep an eye over fraudsters by assigning credit limits based on past purchasing behaviour. It would monitor and supervise credit limits and use “proprietary risk engines” to track abuse and fraud.

Google says the micropayment system is consistent with Google’s efforts to help publishers monetise their content and engage with bigger audiences. And they also address the publishers’ big fear that if they start charging, they will be penalised by search engines who ignore those crouching behind the pay walls. A Google spokesperson says they will help the publisher’s content be easily discovered.

But let’s just imagine this reconfigured Google now in charge of collecting money from readers and distributing it to the content providers. It would in affect control the purse strings and the distribution channels via search. That raises a lot of new questions apart from the obvious one of whether people will pay.

First, one could imagine that Google itself won’t let a commercialisation opportunity like this go by and will clip the ticket. Might Google then skew searches towards the most lucrative content? And what intelligence will Google be able to gather on people’s content purchasing habits that will give it more knowledge over users than the individual content creators? Might Google favor those top tier news organisations charging for content over free sites?

On the other hand it might aid the long tail – all those small niche sites that are publishing content but are too small to attract advertising revenue. They might be able to charge for their content, charge for eBooks and thereby create another stream of revenue for their businesses.

And once people get used to paying for content online, what are the implications for the independent broadcasters which are planning massive expansion? Might the taxpayer who has accepted the no advertising mantra decide that the pay-per-use model is a better one to pursue, so that those who don’t give a toss about the ABC and the BBC don’t have to pay for it?

Whatever the outcome of the war between publishers and Google, this market that has already been massively disrupted and is set to go through more major change in the next 12 to 24 months. And as usual there will be great opportunities for smart entrepreneurs.