6/12/10

Publishers Fight Back With a Communal Digital Newsstand

The publishers, representing eight of the leading dailies and weeklies in France, said last week that they had formed a consortium to manage the project, which aims to create a single online portal to sell the publications’ contents via the Web, mobile phones and tablet computers like the Apple iPad. Consumers could buy articles or subscriptions with a single click of a mouse once they had created an account.

“The idea is to put a value on online content,” said Frederic Filloux, a former newspaper editor who is heading the project. “It’s a matter of survival for us.”

The plan is being introduced as newspapers everywhere are rethinking their digital business models, which until now have mostly been built on advertising-supported Web sites that were free to users. With online ad revenue falling short of hopes, some publishers are putting up pay walls, and others are considering plans to charge users for access to their sites.

The need for new sources of income is particularly great in France, where newspaper readership is low and many publications survive only because of government support.

The introduction of the digital kiosk, planned for the next year, could represent a significant expansion of the amount of French content behind pay walls. While many French publications have begun charging for their archives or other niche services online, they generally still provide free access to general news stories.

Under the plans described by Mr. Filloux, the members of the group would maintain their own Web sites — presumably with extended pay walls, so that consumers could not make end runs around the digital kiosk to gain access to the same content. He said details, like the kinds of packages available and the pricing, had not been determined.

While the consortium hopes to generate more revenue from consumers, there is another goal as well: to increase the members’ leverage against digital powerhouses like Google and Apple. Publishers in France chafe at the fact that they are not paid when the Google News service displays snippets of their articles. And they say the 30 percent commission that Apple charges to include publishers’ applications in its iPad and iPhone App Store is too steep.

Mr. Filloux said the publishers had no plans to block their articles from Google News, as some publishers elsewhere have done when they erect pay walls.

“We have very good relations with Google,” he said, but added, “If we are able to speak in a more collective way, it would be much more efficient.”

Google says it is “working constructively” with the publishers. In a statement, it called the formation of the consortium “a positive move which allows us to talk to eight leading publications at the same time and see how they can best use Google products for mutual advantage.”

In addition to its advertising services, Google has been developing a system to help publishers operate paid sites, though it has not yet been deployed commercially.

“At end of the day, it would be suicide not to reach an agreement with people like Apple or Google,” said Thibaut de Smedt, managing partner at the investment bank Bryan, Garnier in Paris, who works with media and technology companies but is not involved in the kiosk project. “The value will be shared with all these players, but the publishers want to get a fair portion of the revenue.”

The digital kiosk is not the only European initiative aimed at giving news publishers greater bargaining power. In Germany, for example, newspapers and magazines are pushing for a new copyright law that would enable them to require online users of their articles, like news aggregators, to pay royalties. In Italy, newspaper publishers are pursuing an antitrust complaint against Google.


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