A Google Paid Content System For Publishers May Be Coming By Year-End

6 Comments

Credit: Flickr/Spencer E Holtaway

Updated: Google (NSDQ: GOOG), which had hinted for nearly a year now that it was working on building some sort of paid content system for publishers, is reportedly set to launch such a system by year-end. According to a report in the Italian newspaper La Repubblica, Google is now reaching out to publishers to get them to sign up for the system, which it is calling Newspass.

Google wouldn’t confirm the La Repubblica report, saying “we don’t pre-announce products and don’t have anything to announce at this time.” But the Newspass system — at least from the translation of the La Repubblica article — appears to have many elements of a paid content proposal Google made to the Newspaper Association of America last fall. Back then, Google said it was “uniquely positioned to help publishers create a scalable e-commerce system via our Checkout product and also enable users to find this content via search–even if it’s behind a paywall.”

La Repubblica says that, with Newspass, people will be able to log-in to the sites of participating news publishers using a single login. Publishers will be able to designate what type of payment they want to accept, including subscriptions and micropayments. People who find content from participating publishers in Google search will see a paywall icon next to that content and be able to purchase access directly from there using Checkout.

La Repubblica doesn’t specify what countries Google is planning to launch Newspass in, although from the statement Google provided to us — which is included in full below — it sounds like Google would launch any system like this globally and not just in Italy.

Google has had some of its ugliest confrontations with the news industry in Italy, where publishers have complained loudly that they are not making enough money online and have talked about a lack of transparency on Google’s part in the way it handles both its search engine and Google News. Those complaints have in part prompted other actions by Google to improve its relationships with news publishers, including its recent disclosure of the percentage of AdSense revenues it shares with publishers.

Here’s Google’s full statement: “We’ve consistently said we are talking with news publishers to figure out ways we can work together, including whether we can help them with technology to power any subscription services they may be thinking of building. Our aim, as with all Google products, would be to reach as broad a global audience as possible.

We don’t pre-announce products and don’t have anything to announce at this time.”

6 Comments

concerned

Publishers have to be wary of putting all their eggs in the Google basket. This is not another “lest they get too big” argument, but rather one about risk management.

Google has often been charged with being responsible for demolishing the business models of traditional publishing. Online, publishers are now dependent on Google’s independent algorithmic decisions for their traffic, meaning that their Display and Adsense revenue streams are now directly affected by Google’s algorithms. Any algorithmic twitch by Google today percolates across the entire publishing eco-system, leaving site managers scrambling for ways to recover their lost revenues each time a detrimental change is made. With Adsense, major publishers are now finding that Google is responsible for more than half their advertising revenues. By going with Google’s paywall system, publishers will be letting Google in on one of their last remaining revenue streams – Subscription Revenues, at a 30% premium, with Google potentially holding the reins on how publishers price their content (at least on the micropayments side) as well.

The choice of a paywall solution cannot be a pure technology consideration. When evaluating revenue streams through paid/metered/subscription access solutions, publishers have to evaluate the risk landscape carefully, and ensure that revenue risks are well hedged through diversification of their revenue sources.

Newspass may be a big story for Google, but I am not sure this is something for publishers to rush into.

Guest

This is a terrible idea for Google and for its users. The only people who win with this are dinosaur newspaper publishers. I would not use Google if I knew that any more than one of the top ten organic results was behind a pay wall. Newspass would seem to be a great thing for competing search engines if their content remains free. At the very least, the paid results should be segregated from the organic results, similar to the way AdWords ads are segregated now.

qwerty9876

But obviously you do enjoy reading and talking about them Norman

Erin

The company will use the proceeds to build out its platform. Two-year-old Magnetic, which was previously known for contextual ad serving as DomDex before changing its name.

Norman Rogers

I rather like the idea of exposing the how and why of this sort of thing. Anything that kills newspapers is fine by me.

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