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New venture to help US newspapers make money on Web

WASHINGTON - Three veteran US media executives teamed up on Tuesday and launched a company designed to help ailing US newspapers and other publications make money on the Web by charging readers for news.

Journalism Online intends to “quickly facilitate the ability of newspaper, magazine and online publishers to realize revenue from the digital distribution of the original journalism they produce,” its founders said in a statement.

The company is led by Steven Brill, the founder of Court TV, Gordon Crovitz, a former publisher of The Wall Street Journal, and Leo Hindery, a former chief executive of AT&T Broadband.

The venture comes as newspapers across the United States grapple with a steep plunge in print advertising revenue, steadily declining circulation and the migration of readers to free news online.

Two newspapers, the Rocky Mountain News of Denver, Colorado, and the Seattle Post-Intelligencer, have shut down in recent weeks and several big newspaper groups have declared bankruptcy, including the Tribune Co., publisher of the Chicago Tribune, Los Angeles Times and other dailies.

Brill said the company has already held talks with most major US newspaper and magazine publishers and they expressed “strong interest” in the venture.

“We think this is a special moment in time when there is an urgent need for a business model that allows quality journalism to be the beneficiary of the Internet’s efficient delivery mechanism rather than its victim,” he said.

“We believe we have developed a strategy and a set of services that will establish that model by restoring a stream of circulation revenue to supplement advertising revenue,” he added.

Brill said he and his partners were convinced that readers “will continue to support journalists by paying a modest, fair price for original, independent, professional work distributed online.”

Among major US newspapers, only The Wall Street Journal currently charges readers of its website although a number of other dailies, including The New York Times, have said they are considering introducing a similar system.

Media analysts have been engaged in a fierce debate over whether readers will be willing to pay for news online after becoming accustomed for so many years to getting what they want for free.

The founders of Journalism Online said they were convinced consumers would pay for “quality journalism” and outlined plans to develop a website that would allow publishers to charge for content.

They said it would be a “password-protected website with one easy-to-use account through which consumers will be able to purchase annual or monthly subscriptions, day passes, and single articles from multiple publishers.

“The password-enabled payment system will be integrated into all of the member-publishers’ websites, and the publishers will have sole discretion over which content to charge for, how much to charge, and the manner of charge.”

“The website will provide a way for publishers of quality journalism to charge whatever they believe is a reasonable amount for their content in ways that are seamlessly convenient for readers,” said Hindery.

“The only condition of participation is that the publishers have to charge for some portion of their content,” he added.

Journalism Online would also provide annual or monthly subscriptions to consumers who want to pay one fee to access all of the content from member publishers. Revenue would be shared among publishers.

Journalism Online would also negotiate wholesale licensing and royalty fees with intermediaries such as search engines and other websites.

One of the most popular online news aggregators, Google News, has been the target of criticism from some US newspaper publishers for linking to their content without sharing advertising revenue.

Other newspaper owners have not complained, however, saying Google News is driving traffic to their websites that they would not otherwise receive.

“Journalism Online will enable news publishers to negotiate from a position of strength,” Brill said. “Consumers will benefit because they will have greater choice, and search engines and other intermediaries will benefit because they will have access to more journalism.”