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Apr.15

3:30 PM ET

Wednesday, 15 Apr 2009

Can An Online Article Superstore Save Journalism?

Posted By:Julia Boorstin

Topics:Internet | Movies & Film Studios | Television | Technology | Media

Sectors:Media

Companies:Microsoft Corp | Google Inc | Apple Inc | ATT Inc | News Corporation Limited

Woman using a computer
There's no question that journalism needs a new business model. But until now, no one has come up with the solution.

Three veterans of print publications are teaming up to launch their solution to the media-monetization problem.

Unlike most news sites, "Journalism Online's" golden bullet is *not* advertising; it all hinges on getting people to pay up. Journalism Online, set to launch in the fall, is an e-commerce platform on which news organizations can charge subscription fees or charge for individual articles. The site's real asset will be its technology, which publications can use either on Journalism Online's site, or which they can bring to their own websites.

The new venture's team has quite a promising combination of experience. Steven Brill, one of the co-founders, founded "American Lawyer" magazine, Court TV, as well as Brill's Content, a magazine that took a critical eye to the media and produced some highly-respected investigative articles before it closed in 2001. Perhaps most interesting, Brill created Contentville.com, a late 1990s website designed to be a clearing house for news and information online. The site crashed and burned in 2001, it wasn’t alone in doing so, but it sounds similar enough to this new venture that he may have gained some valuable experience.

Joining Brill are Gordon Crovitz, who was publisher of the Wall Street Journal and Leo Hindery, whose background is in cable. Hindery runs a media-oriented private equity fund and previously headed Tele-communications Inc. before it merged with AT&T in 1999. The Wall Street journal has managed to successfully establish a subscription business and cable is all about subscription, so we'll see if this trio can apply some of that experience.

Media's Future

With advertising revenue falling off a cliff, particularly for the publishing industry and as Internet ad growth slows, focusing on subscriptions makes sense. But with so much content available (ad-supported but effectively for free) it's unclear if people will really be willing to shell out for something they currently take for granted. And it could be confusing if publishers take advantage of the website's potential to charge different amounts for individual articles and subscriptions. As we've seen with the success of Apple's iTunes' one size fits all model, people don't like to think too much when making an online purchase.

Journalism Online won't just look to individuals for subscription revenue. Part of the plan is to negotiate fees for distributors like Google. Journalism Online, of course, thinks Google isn't paying enough. If the company can get enough small papers to join their ranks, they might have some decent negotiating power with Google. It certainly makes sense to try to scale this business. To tackle this part of the business they've hired attorney David Boies (he prosecuted the Microsoft antitrust case) and a former US solicitor general.

If anyone can make it work, its this group. They've got the experience. They've got the big names. Now they just need to get the content and committed relationships with major publications.

And this fall, we'll see if people will pay.

A New Way To Pay For Journalism