How much would you pay for news? A new coalition seeks an answer

For a great many Internet users -- perhaps a majority -- who believe they're already paying monthly fees for content, the thought of paying a subscription fee for online news may be akin to yet another "tax." Certainly the purveyors of the news-is-by-nature-free argument may elect to characterize such a fee as a "tax." But challenging and defeating the new conventional lack-of-wisdom is just one of the challenges facing a group of businessmen at the nucleus of a new online news coalition.

Perhaps if there were just one fee that pertains to a whole portfolio of news providers, enough readers would see enough value in their product as a collective, to subsidize it through a single subscription fee. That's the bet being placed today by Journalism Online, LLC, the latest venture from business innovator and Court TV founder Steven Brill, venture capitalist and former TCI CEO Leo Hindery, and former Dow Jones executive vice president and The Wall Street Journal publisher L. Gordon Crovitz.

"We've all heard some people say that Internet journalism needs to be free because other less-valuable content is free. But we believe Americans know that advertising alone can't support quality journalism -- and the truth is that it never has," Brill pronounced in a statement this morning. "The irony is that by using the Internet, publishers of newspapers and magazines have dramatically improved the quality and breadth of their journalism with online updates, video reports, blogs, data analyses, and specialized beat coverage. The problem is that, with rare exceptions, they are getting paid nothing for it."

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Though at present, there do not appear to be any charter members of the JOI coalition (and with Rupert Murdoch now running the WSJ, its likelihood of membership is slim), its hope is that enough publishers would be willing to supplement their advertising-based income that they would pool their premium content together, with fees payable through a single source. Though members would not have to charge for all their content, one condition for membership, JOI stated this morning, is that they must charge for something.

Crovitz' contribution to this morning's statement made it clear -- perhaps in a roundabout way -- that members would not have to be the size of Dow Jones to qualify. As an example of one way a publisher may monetize its content, he said that pooling subscription resources could give smaller publishers a leg up: "This way, when a story from a publisher that is not one that a consumer usually reads 'pops' in popularity and becomes prominent, that publisher will benefit from all of the interest in it in a way that would not happen if the reader had to have a separate subscription to that paper." (Note Crovitz still calls the publisher in question a "paper.")

The three founders of JOI already have some spectacular histories with the problem of building business models around online news -- histories that are not success stories throughout each and every chapter. Crovitz' insistence upon some premium content at WSJ.com was generally regarded as unpopular, and even reportedly had its doubters within the newsroom. Almost immediately after Murdoch's appropriation of Dow Jones, CORRECTION Murdoch Crovitz announced his intentions to make WSJ.com completely free -- a decision which was partly behind Crovitz' swift exit. However, in light of the current economy, Murdoch's declaration has never yet led to action.

Leo Hindery is known as the architect of the deal that led AT&T to purchase John Malone's TCI, catalyzing a series of transactions that ended up catapulting Comcast to the top of the heap in US cable TV and broadband. Hindery's brief tenure as CEO of fiberoptic firm Global Crossing was not exactly perceived as successful. Having left InterMedia Partners in 1997 to head TCI, he essentially founded it again in 2005 as InterMedia Advisors, with the mission of funding new media ventures. And if Hindery's name is ringing a bigger bell than Crovitz's, it's because it was linked to the failed nomination of former Sen. Tom Daschle to head the Dept. of Human Services. Reports say that Sen. Daschle, a member of InterMedia Advisors' board, advised then-Pres. Elect Obama to hire Hindery, who also happens to be a top-ranking fundraiser.

In a September 2007 conference sponsored by The Deal, Hindery told attendees that online media could not achieve long-term success without a viable growth plan. Such a plan must include, he said, some kind of barrier to entry -- a premium that disables competition from players that can't ante up.

And then there's Steven Brill. He's an innovator of business models by trade, one of his most recent successes being the Clear system that offers subscriptions to airport travelers for faster security screenings. Beginning his career in the 1970s publishing a magazine that cast light on some of the shadier sides of the legal profession, he used the funds he received from a Time Warner buyout of that magazine and other properties to found Brill's Content, one of the new media industry's first regular journals. As a symbol of its own innovation obstacles, Content was a monthly printed magazine, which sank like all the other such publications of the period.

Recently, a memo that Brill wrote in November 2008 -- obviously with the intention of being read and debated -- was published by the respected Poynter Online journalism site. Its subject was the revenue debacle currently facing The New York Times, and whether it could afford sticking to a free publication model.

"A business model that is based uniquely on expensive editorial quality but that derives revenue only from advertisers who only indirectly use or pay for that quality is a business model that cannot work," Brill wrote. "There is simply no example, not one -- in print, online, in television -- of quality content offered for free ever resulting in a viable business. The Times has made great strides in developing beyond a simple print business, yet it is currently wasting all of that by sticking to that free model."

If ever there were three men in this industry with the war chest, the fire and brimstone, and the battle scars necessary to get things moving in the direction of a viable online news business model, these are definitely the three.

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