Will Murdoch's readers pay for online news?

Rupert Murdoch, long seen as the devil incarnate by many in the newspaper world, is bidding to be its saviour – but a public grown accustomed to 'free news' will not like it, writes MARK HENNESSY, London Editor

FOR YEARS, GOOGLE has been the leviathan of the internet, due to the quality of its search engine – its news content is fed by thousands of newspaper websites around the world that do not get paid for the privilege of appearing there.

News International chief Rupert Murdoch has grown tired of it, and this week Google offered a compromise, saying internet users would get five “free clicks” daily to media sites, before being requested to pay, or to register with the organisation concerned.

Trumpeted as a significant move by the search giant, the reality is that it probably is not, since general readers are unlikely to use Google that number of times in a day to read any one publication.

Instead, they flick from one to another like gadflies.

So far, newspapers are struggling to make the internet pay. In Hyderabad in India this week, the World Newspaper Congress warned that newspapers will not be “financially viable” unless they find some way of doing so, and quickly.

The theory was that digital advertising would replace lost print revenues, yet last year just $6 billion was spent on newspapers’ online sites, compared with $176 billion in print.

"Like an over-eager, middle-aged dad, desperate to look cool, we ended up dancing obediently to other people's tunes. We are allowing our journalism – billions of dollars' worth of it every year – to leak on to the internet," says Les Hinton, the chief executive officer of Dow Jones Co, which publishes the Wall Street Journal– and which was recently bought out by Murdoch.

Research in Ireland on the impact of the internet on newspapers is limited, but a study in the UK, published last month by Ofcom, offers a guide to what has happened there, and what may happen in the future.

Sixty-six publications closed throughout the UK in the 18 months up to July, though the majority were weekly free-sheets that had never achieved a position of dominance in their home markets.

During that period, 900 journalists lost their jobs – mostly sub-editors, who lay out pages and carry out other critical production duties, while, in all, staff of all types working on local newspapers have been cut by a quarter.

Northcliffe Media, for example, merged its subbing operations for six of its newspapers into one, losing 20 sub-editors in the process: "That was absolutely necessary because we couldn't afford it," says John Meehan, editor of the Hull Daily Mail.

The Hull paper makes 12 per cent of its revenue from online advertising – a figure that is better than most: "It's significant, but whether we will ever make enough to cover for losses in revenue elsewhere is another question entirely," says Meehan. Murdoch now insists that he will put all of his stable of publications behind a "pay wall" from next year, though the Wall Street Journalhas always charged for its work – a good fortune shared with the Financial Timesin London.

The question now is whether Murdoch can make it work, or whether an audience that has grown used to believing that journalism is not merely cheap, but free will simply ignore the online incarnations of the Timesof London, or the Sun, and go elsewhere.

However, the trend is happening at local level, too. This week, the Johnston Press – one of the biggest owners of UK regional and local press – announced that it will start to charge for access to six of its papers.

However, the fee is trifling: £5 (€5.50) for three months, but, even with that, the company – which owns the Limerick Leaderand the Leinster Leader, among others in Ireland – is far from sure that readers will comply.

The project is being tested by Johnston – which has haemorrhaged advertising revenue in the last two years and is cursed by some very expensive purchases, many in Ireland – on the Northumberland Gazette, the Whitby Gazette, and other even smaller titles.

Reaction has been mixed. One Whitby resident, Jane Legge, speaking to the Times, gave the contradictory response typical of many readers, saying: "I think that paying for news online has got to happen eventually, otherwise newspapers will go under, but I wouldn't subscribe. To say there's not a lot going on in Whitby would be an understatement."

The battle faced by the British local and regional press is tougher than any elsewhere, because they also have to counter the BBC’s gargantuan online presence, which is now seeing it produce ever more local content.

Back in Hull, Meehan rails against the BBC’s operations – which are mirrored in Ireland, but to a lesser extent, by RTÉ – because its online presence is paid for by the television licence fee.

“The public think this is for free because they have no choice whether to pay the licence fee or not. If they had a choice to opt in or opt out, they might opt to pay for the BBC services, but they have no choice in the matter,” he says.

The BBC competition could have been even tougher, if it had got permission to go ahead with a plan to set up a local video network that would have employed 400 journalists and produced 240,000 stories.

The project was to have been trialled in Lincolnshire and Yorkshire, but was ruled out by the BBC Trust, following a major lobbying campaign by regional media companies who warned that it threatened to put them out of business.

Now, the pendulum may be heading in the other direction. Last week, Mark Thompson, director general of the BBC, said a review of BBC Online next year would decide whether “many millions of the pages that are up there need to be there. It might be a slightly smaller website,” he said. “It might be stronger, making sure we are playing to our strengths,” added Thompson, who is conscious that if the Conservatives should come to power, the fortunes of the BBC could change significantly for the worse.

However, apart from Google and the BBC, the reality for newspapers is that circulation started to fall even before the internet came along. Since 1972, UK morning circulation has dropped 1.4 per cent a year, while evening sales fell by 2.9 per cent.