"No one can point to a quality journalism product that has depended only on advertising revenue," Brill said during the conference's opening keynote speech. "The closest was the network news operation when there were three networks and even then their news content was a loss leader."
Brill, who is best known for starting American Lawyer and Court TV, has been making the rounds to talk about the potential demise of quality journalism.
Brill's start-up will, among other things, create an ecommerce site where consumers sign up just once to pay for all types of news content online from publishers who joined Journalism Online, which Brill said could include bloggers and journalists who operate independent news-gathering sites that want to receive payments for their work.
The venture's success, however, depends heavily on Brill persuading large traditional publishers to join Journalism Online. Brill's startup will make its money by taking a percentage of the fees paid by consumers, so it needs to bring in the media companies that consumers want content from to make significant revenue. Brill's partners in the venture are L. Gordon Crovitz, the former publisher of The Wall Street Journal, and Leo Hindery, the former CEO of AT&T Broadband.
Brill said that each publishing company that joins Journalism Online will decide how much and in what form it wants to get paid for content, but Brill said that the ecommerce site could offer an "all you could read" program that charges $30 for all the affiliates or targeted subscriptions such as sports for a lower price.
To watch out for any antitrust concerns since the industry can't collude on pricing, Brill has brought on David Boies, who led the Justice Department's antitrust suit against Microsoft's and former U.S. Solicitor General Ted Olsen to counsel the company as well as be a part of negotiations with aggregators and search engines that traditionally have pushed for content to remain free.
He also wants to offer market intelligence to publishers that strike deals with his company. "We'll give them reports from the front lines, what's working and what's not working," he said. "There are debates about micropayments versus subscriptions. Who knows which works best? Our affiliates will know because we are giving them reports."
This kind of intelligence may be the most compelling concept behind Journalism LLC as more companies in the media industry consider shifts from free models to paid content models. It's also going to be increasingly important as more online properties -- whether journalistic or not -- realize that their content is not being supported by advertisers either. Another big issue discussed at OMMA Publish was the problem of selling excess online ad space inventory. Or said differently, why is it that even when content is free, advertisers may not be interested in paying to reach consumers viewing those pages?
Brill's success may depend heavily on having access to that kind of information as well if Journalism Online is going to succeed. Brill is not espousing putting all content behind a paid firewall, he said, but instead getting eight to 15 percent of visitors to pay for more unique content. The remaining majority of readers would access existing content for free that is less unique. Helping publishers figure out what should and shouldn't be behind a firewall and how much people will pay could be key to Journalism Online's success as business and distribution models continue to evolve.
Indeed, during a panel discussion at OMMA Publish an hour after Brill's speech, executives from Rodale and Time Inc. noted that these issues are already being discussed, and some are already in practice. The panel, titled "The Payment Plan: Pipe Dream or Promise," focused in part on what type of payment plans for content are already in place.
Moderator Terence Kawaja, managing director with GCA Savvian Advisors, asked all the panelists to give their thoughts on Brill's plan. All were supportive of Brill's passion to make certain that quality journalism survives because it's important in the broader discussion of issues such as democracy and civic duty. But they also see the difficulty in taking what was once free and making consumers pay for it.
"The struggle is how do we charge for content that is already free," said Sean Nolan, vice president of online operations and external online marketing at Rodale. "But for us, the content that we charge for has never been free."
Time Inc. executive vice president John Squires echoed that sentiment, saying that it is a misperception that the company's magazine content is free. "People magazine's content isn't free online," he said. "People.com is an hourly site with different content. We've always believed in paid content."
They also noted that new distribution models, particularly on mobile devices such as the Kindle and iPhone, may be changing the way consumers think about paying for content. "It may not be that consumers won't pay, but what will be the advertising model for mobile," Squires says.