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Monday, June 14, 2010
Shift to charging for online news inevitable, Dow Jones chief says
Newspapers around the world will soon have no choice but to start charging for Web content, according to Dow Jones CEO Les Hinton, who called it "madness" to give away "expensive and valuable journalism for nothing."
Media organizations like the Wall Street Journal, the leading U.S. business daily published by Dow Jones & Co., spend "millions and millions of dollars" each week so thousands of journalists can cover the news worldwide, Hinton said at a lecture last Monday organized by Keizai Koho Center in Tokyo.
The WSJ's decision to charge for online content in the mid-1990s "established in people's minds that what we do has value," he said, emphasizing the need for media organizations to persuade people to pay for their hard-earned content.
The problem with newspapers, he said, "is getting the horse back into the stable."
Newspapers have no choice but to start charging for their Web editions, he said.
"I must say we're not alone . . . I think that every major newspaper operation — a great many of them — will be testing a variety of different ways of having their journalism paid for," he said.
Rupert Murdoch, CEO of News Corp., which acquired Dow Jones in 2007, said last year that he would charge for all online content associated with the newspapers and TV stations he owns.
He has also said Japanese newspapers, most of which give away at least part of their general online news, will start charging as well.
Nikkei Inc., publisher of Japan's leading business daily, launched a digital edition of the newspaper in March.
Hinton said that those who work in the media "have to be both in the content business and in the technology business." Technology moves the consumer closer to content, while content is "what brings technology to life," he said.
Dow Jones today gets nearly half its revenue from digital publications because progress in media technology is continuing despite a global recession, he said.
"New products come to market faster than ever, and the WSJ's new iPad application debuted only a few weeks after development began . . . It is only one of the few products we launched this year that we hadn't even imagined a year or so ago," he said.
Hinton said Apple's new gadget is significant because it is among "the first of scores of mobile tablet media" that can replicate the functions of newspapers, adding that the machines "are going to get lighter, faster, cheaper, and will be universal."
He also said major media organizations with a global reach need to localize their content to fit the needs of each market.
"It doesn't do just to be global anymore. You have to be local, too," he said, explaining that the group now publishes news and business information in a dozen languages including Japanese, Chinese, Spanish, German, French and Arabic.
"In all the markets we operate in, we concentrate more and more on developing local language versions because people are showing they are willing to pay to read," he said.
A blog that Dow Jones launched to report real-time information on China, for example, can be read in both English and Chinese, but the local version is overwhelmingly more popular, he said.
This need for localization seems ironic, given that the ongoing trend toward globalization of news and information has many big newspapers expanding their influence well beyond their core markets, he said.
"You can read the WSJ in Manila as easily as Madrid. The publisher of the Washington Post recently estimated that 90 percent of the page views of that newspaper's Web site are from outside of Washington D.C.," he said.
This trend is not limited to the news industry, and consumers around the world are increasingly enjoying content — music, TV programs and movies — that is universal.
"This expanding radius has got to be good for business in the long term," he said. "We can meet anyone, anywhere, anytime. Who could ever have dreamed of such a thing before the Internet?"
Hinton said this leaves him wondering "why it is such a nightmare" for the newspaper industry, where many firms are steadily losing circulation and advertising revenue.
He said he is confident great newspapers will survive the shift to the digital era, where you will likely surf the Internet for news from the world and "find yourself awash with information but kind of starved of understanding at the same time."
The average Internet user "can very quickly start to tell where you can rely on news and where you can't," and there will be a future for newspapers "if we properly position ourselves, properly promote our brands and properly maintain our right to be trusted by people," he said.