Media Execs: Paid Online Content Is Future

Media and entertainment industry executives said here Tuesday that consumers will be willing to pay for popular digital content as more sector companies explore new online pay models.

Les Hinton, chief executive officer of News Corp.’s Dow Jones & Co. and publisher of the Wall Street Journal, said newspaper firms’ mistake was to give content away for free on the Web for too long, which allowed Google to become a kind of digital vampire.

This “fed Google’s lust for newspaper blood” and allowed it to pick up money all over the place, he said in a keynote speech at the official launch event for the PricewaterhouseCoopers “Media and Entertainment Outlook 2009-2013” report. “They gave Google’s fangs a great place to bite,” he quipped.

But Hinton also suggested that there is still room to make money for media companies.

And he suggested Google could lose market power over time. “They will be the gorilla in our midst for a long time,” but providers of smarter search and the like will cut into its business, Hinton said. Microsoft’s Bing search engine will be just the first of many more challengers, he added.

He also signaled that Dow Jones is working on a technical platform that would allow people to pay for the Journal and other Dow Jones content, as well as third-party news and information. He didn’t provide specifics, but hinted that the system could allow for subscriptions and micro payments.

Industry observers have argued that as more media companies start to charge for digital content, a common payment system is needed to make the pay process smooth and easy. Several companies have been working on such a system.

Earlier in the PwC conference day, Newsweek CEO Tom Ascheim had also argued that consumers will pay for content in the digital age. “People will pay for stuff they love. They won’t pay for stuff they think is mediocre,” he said. He pointed to the Journal’s Web site and ESPN as examples of attractive content in the digital age.

At the same event Tuesday, Michael Del Nin, senior vp of international corporate strategy at Time Warner, suggested his firm’s TV Everywhere initiative won’t run into as much consumer opposition as some argue. It would require consumers to subscribe to a cable operator or other video provider to get access to online video content of cable networks.

“There is still time to get used to watching video [in] a different way,” he said.

Asked if online joint venture Hulu will not get content from TW’s Turner cable networks unit unless it authenticates cable subscribers, Del Nin wouldn’t comment specifically. “It’s a work in progress,” he said.

Nielsen Business Media