WORLD> America
Move to make free online news history
(Agencies)
Updated: 2009-04-16 08:13

SAN FRANCISCO -- Three media veterans plan to bundle the Internet content of newspapers and magazines into a subscription package that will test Web surfers' willingness to pay for material that has been given away for years.

The system won't be ready until the fall, but the plans were announced late on Tuesday because so many publishers are already clamoring to sign up, said Steven Brill, co-chief executive of the new venture, called Journalism Online.

"The interest in this came together a lot more quickly than we anticipated," said Brill, the founder of Court TV and American Lawyer magazine. "We are dancing as fast as we can now."

Brill declined to identify the publishers willing to participate because agreements haven't yet been signed.

Journalism Online's other principals are former Wall Street Journal publisher Gordon Crovitz and former cable television executive Leo Hindery. The decision to place more toll booths in front of online news reflects the deepening financial problems threatening the survival of print publishers, particularly newspapers.

Since 2005, the annual volume of print advertising in US newspapers has plunged by $12.7 billion, or 27 percent, according to the Newspaper Association of America. Over the same time, the amount of online advertising on newspaper websites has risen by $1.1 billion, a 53 percent increase, not nearly enough to offset the erosion in print.

With their profits shriveling, newspapers have been laying off workers and cutting other costs. In the most severe cases, five newspaper publishers have filed for bankruptcy protection since late last year, while the Seattle Post-Intelligencer has gone online only and the Rocky Mountain News has closed.

Many newspaper publishers now believe they can stop the hemorrhaging by charging for at least some of the material on their websites instead of giving it away. Besides raising more revenue online, Internet subscriptions could be included in the cost of a print subscription, as a way to persuade more readers to keep paying for print editions.

"That's a very important piece of this," Brill said. "If you are trying to sell your product with one hand and give it away with the other, then you are undermining the integrity of your product."

The risk of asking readers to pay for online news is that many publishers might find it shrinks their audience, especially if other sites remain free. And that could leave the publishers that charge fees with even less ad revenue, exacerbating their headaches.

Few newspapers now charge for access to their websites. The Wall Street Journal is the largest one to do so, with nearly 1.1 million subscribers.

By putting content behind a "pay wall", publishers also could keep search engines from indexing the stories and then delivering links to them in search results. Journalism Online hopes to negotiate licensing agreements with Google and other services so the search engines could show links to stories that only paying subscribers can read.

Journalism Online's business model will share some elements with the cable and satellite TV packages that have become staples in millions of households.

The company plans to offer an "all-you-can-read" option that would give customers access to the content of all the participating publishers for a monthly fee, expected to range from $15 to $20, Brill said. The publishers will divvy up the revenue, based on which articles draw the most readership each month.