Osnos: News generates money, but little goes to providers
By Leah McBride Mensching, Wednesday 7 May 2008 at 22:01 :: Online/Digital Publishing :: #1630 :: rss
The idea that “free” news on the Internet is the cause for current financial woes in journalism is incorrect; on the contrary, a lot of money is generated by the news, very little of which makes it back to news providers, wrote Peter Osnos, senior fellow for media at The Century Foundation on Tuesday.
The fact that content creators are not receiving a fair amount is “no longer tolerable,” Osnos stated. “News is no more free these days than the 'complementary' bag of pretzels you get on a plane, after you’ve paid for the ticket.”
Newspaper subscriptions are miniscule compared to the costs of broadband Internet, mobile phones and service, televisions, iPods and laptops, Osnos points out on the Century Foundation Web site. Therefore, if newspaper content is accessed through these expensive devices (US$1,099 for a Mac laptop, versus $5.10 per week for a home-delivered New York Times subscription), it is paid for in the grand scheme of things, but just not to the newspaper providing the content.
The Googles of the world make a fortune in advertising, mobile service providers make a fortune in transmission and computer companies like Apple make a fortune in hardware, he writes, all by providing someone else's content. The financial woes of the news industry would evaporate if these three would “pay a share of the cost of the news and information that flows through them,” Osnos states.
“There is a direct precedent for this concept in cable television in which the content providers – ESPN, CNN, and all the rest of the proliferating channel spectrum – are paid for each subscriber by the companies carrying the programs. Most of the cable channels also sell ads, which makes them double-dippers in the way newspapers and magazines have always been. This is very lucrative. Rupert Murdoch’s News Corporation’s cable channels, including Fox News, posted a 23 percent increase in profit in the last quarter of 2007. No wonder Murdoch is prepared to throw billions at newspapers. He sees that the profits will come through his other holdings, recycling the news or charging the cable providers for it.”




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