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How will we pay for the web?

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Two big stories out today have revealed a quandary facing big internet publishers: how people will pay for the content they read and watch.

The New York Times, part of Rupert Murdoch’s News Corp empire, has announced it install pay walls from 2011 and will charge for unlimited access to its website.

Details are sketchy, but it seems in general old media companies are convinced that readers should pay their way.

In Britain, the Financial Times already charges for access beyond a certain point, while The Sun and The Times – also part of the News Corp group – seem destined to follow suit.

The problem is in the figures. Murdoch has been quoted saying that there isn’t enough advertising in the world to fund the large number of newspaper and independent news sources online.

The New York Times recorded a loss of more than £22m in the third quarter of 2009 after ad revenues dropped 30 per cent on the previous year.  

But asking readers to pay might not be the answer either. The paper was forced to abandon a paid-for structure back in 1996 when it couldn’t get sufficient numbers to sign up.

On the flip-side of the argument is Google, that bastion of free stuff, which has just penned a deal to screen Indian Premier League cricket on its online video sharing site YouTube.

The business model is, you guessed it, advertising.

The same applies to deals allowing YouTube to broadcast shows from ITV and Channel 4’s back catalogues as well as live music events shown on the website.

Who is right? Most likely a combination of both. The future of online increasingly looks like it will be funded by a combination of subscriptions and advertising – just like the old newspaper model.

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