Google’s Schmidt To Murdoch: ‘Mass Market Paywalls Won’t Work’

Eric Schmidt

Online news is too freely available for Rupert Murdoch’s global paywall plan to work, according to Google (NSDQ: GOOG) CEO Eric Schmidt. Speaking in a Q&A session at the Royal Televison Society Convention in Cambridge, England, on Thursday the search giant boss said via video link that while WSJ.com had succeeded in selling public subscriptions to finance professionals, “in general these models have not worked for general public consumption because there are enough free sources that the marginal value of paying is not justified based on the incremental value of quantity.” (via Reuters.com)

He continues: “So my guess is for niche and specialist markets … it will be possible to do it but I think it is unlikely that you will be able to do it for all news.” So Schmidt backs WSJ and FT.com to carry on profiting from paywalls, but gives Murdoch no chance of succeeding with charging models on News Corp.’s mass market, general interest titles such as the New York Post, The Sun or The Australian.

It’s not exactly a helpful comment from Schmidt, given his company’s strained relationship with the news biz and its recent overtures to publishers: Google is for the first time (albeit on an experimental level) sharing revenue with news publishes via the Fast Flip project and has offered to help the paid content cause by sharing micropayment tools. But you can’t blame Schmidt for saying what many of us are thinking: it’s going to be an uphill struggle to convince a generation used to free online content to suddenly start paying for it.

Murdoch’s paid content battleplan has moved from online to mobile, with the announcement that WSJ’s BlackBerry mobile app will be paid-for from next month. But so far, no News Corp (NYSE: NWS). site has followed WSJ in charging for content and the rhetoric is yet to backed up with action. The company’s UK wing is preparing Sundaytimes.co.uk, a companion site to the Sunday Times broadsheet title, which will come complete with online-only content and staff. Given the timing of Murdoch’s announcement, that site could well be used as a test bed for general interest paid content.

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