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Google's Schmidt: Tear Down Your Pay Wall, Mr. Murdoch

  • Reuters, Friday, September 18, 2009 1:13 PM
Now that Rupert Murdoch has made up his mind about online publishing, and the notion that advertising can't support it, you'd think the industry's fate was sealed.

Not at all, says Google chief exec Eric Schmidt, who, despite lacking Murdoch's menacing bravado, is arguably as influential. Speaking to a group of British broadcasting execs on Thursday, Schmidt said publishers of general news would find it quite hard to charge for content online due to the surplus of sources available.

"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," said Schmidt. Then someone hit his "reset" button and he said it again.

As many have speculated, however, niche publishers such as business news providers will have better luck charging for their fare, Schmidt added.

"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," Schmidt said. Still, we're surprised Schmidt is so bearish on the future of pay models given that Google is developing a micro-payment platform that will be available to both Google and non-Google properties within the next year.

According to a document that Google just submitted to the Newspaper Association of America reveals, the company's "vision" includes subscriptions across multiple news sites, syndication on third-party sites, accessibility to search, and various payment options, including small fees for access to individual pieces of content -- popularly known as micro-payments.

Murdoch, whose vast media empire spans from the New York Post to equity in Hulu, said this summer that he'd had it with free content, and would soon begin charging for access to any and all content under his control.

Also, at Murdoch's behest, News Corp. execs have been meeting with top publishers -- New York Times Co., Washington Post Co., Hearst Corp. and Tribune Co. -- about forming a consortium based on charging for distributed content, both online and on mobile devices.

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