The (Media) Empire to strike back

Are we at a cusp of media upheaval? Are we soon going to see a war betting the old (traditional) media vs. new (Online) media??

Rupert Murdoch, speaking at the World Media Summit in Beijing, was mentioning that Search Engines and other content aggregators need to pay for any news reports or articles they currently take for free

He said “The aggregators and plagiarists will soon have to pay a price for the co-opting of our content”. A Media Mogul whose company owns newspapers, other publications and TV channels across the globe, his view comes as ominous. He was particularly harsh on Search Engine like Google, Yahoo! And other websites like Wikipedia, YouTube and Facebook

While Mr. Murdoch and other media companies are right that there is a price for the content they create. As content owners they need to be compensated for exploitation of the original content for commercial purpose.

Having started my career with a media company, I have been taught and now know that there is nothing called Free in ‘Media’ business :)

While the new media companies had focussed and invested on technology and interactive features, they had left out information. Information was already available in the offline world, and since the ‘paid’ business model of online information business (News) has not been successful, the information was not available for free for one and all.

The idea of charging the Search Engines, and other website (content aggregators) is justified, it would have a domino effect on the way Internet would function. Broadly, the following are ways a media company would charge –

1) Flat fee for content basis time period
2) Cost per content basis

This would mean that the websites who are not breaking even now (I’m not talking about Google here:)) – will have to shell out more, and get deeper into red. The only option then left for them would be: -

- Tie up with fewer media companies, or
- Fewer content on their sites

Also from advertising revenue perspective the following would happen – Online companies would start charging more for advertisements (to offset the extra cost incurred for content), the number of ad impressions served would decrease (as the content pages decrease, and the user visits to webpages decrease) which means lower ad inventory.

But another truth is that most of the online media company websites get their traffic from the very sites the plan to charge for content. Search Engines like Google / Yahoo!, websites like Wiki, YouTube, and Facebook are the ‘gateways’ who are generating and driving traffic.

If the idea of charging for content fructifies, then there would be drastic changes in the online business models and way the most of the Internet businesses function
I feel while this would take time to happen, and if it does happen it would be with trade-off from both sides. What the trade-offs could be?? Mail me, I’ll let you know :)

Cheers

Santosh

Article reference taken from news.bbc.co.uk

Comments

Unknown said…
check this out it is going to be a revolution , still in early stage beta www.mygeni.org Social meets content meets relevancy meets advertising meets share in revenue
10:07 PM
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