The problems affecting established business models used by companies in the Music and Software industries have long been known to also be affecting the traditional print media as the Internet devours all before it. The spotlight in the last week has been on Newscorp after it's unsurprising announcement of losses totalling US$3.4 billion in the last year to June 2009.

A meeting of minds

The first rumors of a big problem would be the Models to Lawfully Monetize Content" meeting held in Chicago in May of this year. Prior to this it had been known that print media was suffering, but this was the first meeting held by all the majors to try to find a way to combat the internet. It was nice of them to reassure the rest of us that they are pursuing a "lawful" solution, because collusion between all the media giants, to, for example, construct a pay-wall around all their content, would be illegal in the US and many other countries.

Following the Chicago meeting, in late July, Associated Press announced a plan to track and protect their articles. Having read this, I'm left wondering how they are going to achieve the "protect" part of their plan as the effort simply involves inserting some HTML style tags into their article pages. The problem is that these tags would be easy to strip out, so only the honest sites would leave the tags intact, and those sites aren't the AP's current problem. I can only assume that the "journalist" who wrote the linked article doesn't really understand the objective because if the AP actually paid for protection and believes that's what they've got, then I've got a bridge that I'm sure they'd love to buy.

An obvious solution

Newscorp and others are suffering because it's very expensive to run a massive media empire while advertising is contracting due to readers moving to the Internet and the ongoing recession. Rupert Murdoch isn't taking this lying down, revealing that over the next year all of the online publications belonging to Newscorp will begin charging for access, apparently on a micro-payment per article basis.

These problems stem from the fact that news has been turned from a premium product, available only in print form from an organisation large enough to collect and deliver it in a timely manner, into a commodity, where anyone with access to a PC can break the latest story through social networking sites like Twitter, hours before the mainstream media even hears about it.

Erecting a pay-wall is the obvious solution for someone who has no idea what the Internet is, ignoring the equally obvious problem that Newcorp products are not the only source of news on the internet. As mentioned previously, this plan would only work if all the news sources erected pay-walls and then colluded to price-fix the news, which is illegal. Murdoch justified this plan by stating that "quality journalism costs money", and that may be true, but many of Newscorp's publications are hardly examples of quality journalism

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The death of journalism

Newscorp and other media behemoths have no-one to blame but themselves for the current situation. Here in Adelaide, South Australia, in 1970's our primary TV channels produced their own news services, and we had two local newspapers, one of which, Adelaide News, is where Murdoch began his career.

Over the years I've watched the big media companies gradually purchase all the locally run operations, radio stations, newspapers and TV, move their headquarters to Melbourne or Sydney and then slowly strangle the local operations until all we've been left with is effectively the same service Australia wide, from all sources, with a thin veneer of local events for flavour.

News media is now a science, designed to produce a generic product that appeals to a mass audience. An example of this thinking that has directly affected me is the ever diminishing shelf space for science fiction novels at book stores. It's more efficient for both the publisher and the major bookstore chains to not stock a niche genre because it takes up space that could be more profitably used stocking titles with generic appeal. It's a question of efficiency, but by doing so, they've also shrunk their market penetration and left the door open for alternatives, like the Internet. Reality TV is another example.

What's the real solution?

As news is becoming a commodity, there is simply no longer the money avaiable to support the media dinosaurs. Erecting a pay-wall around the operations of a few of the generic news sources will drive readers to all the cheaper or free alternatives on offer, not send them reaching for their wallets and purses. Nobody has yet come up with a fool-proof get-rich-quick scheme for monetising the news on the internet, and maybe that's because there isn't one.

Some sites are making good money by providing value-adding services, such as selling t-shirts and souvenirs, offering services related to the website, or selling related advertising in niche markets that the big media producers simply cannot afford to compete in. What's really happening here is that products such as news, music and software are being turned into commodities by the Internet and are no longer able to generate the fantastic wealth that the ownership classes have grown used to.

A DDoS for your trouble

I find it quite the interesting that around the time that Rupert Murdoch announced his plans, as-yet unnamed parties were launching attacks on three of the more prominent Internet sites that are competing with traditional media. Twitter, Facebook and Gawker Media have all been taken down in the last couple of days. A coincidence? Probably, but interesting timing, nonetheless.