Online advertising still king for newspapers - Google CEO
NEW YORK - Google CEO Eric Schmidt has told newspaper bosses they should continue to rely on advertising but needed to embraced new technology to support more profitable business models, and insisted Google was there to help, not harm.
Speaking at the Newspapers Association of America convention in San Diego yesterday, Schmidt assured newspapers that advertising is still king on the internet, and subscription-based models or micropayment schemes can only account for a small amount of revenue.
However, he said these models were on their way. "I think you're going to end up with all three," he said.
Schmidt's speech came days after News Corp CEO Rupert Murdoch said newspapers must begin charging for content in order to survive.
Dean Singleton, AP chairman, said AP would actively pursue legal and legislative actions against those who were found breaching copyrights - hinting at news aggregator websites and blogs, such as the Huffington Post, and search engines like Google, which host headlines and snippets of many news articles, including AP, under terms of "fair use".
Although Google and AP signed a distribution agreement in 2007, the search engine giant has recently come under fire in the media, branded as the bane of the newspaper industry for hauling in profits from its ad-funded search results, which link to newspaper websites.
Yesterday, Schmidt called on newspapers to work together with Google to create content that would entice readers and engage web users in a deeper online experience.
Schmidt sees the future of the industry as more than just news online, but rather in user-generated and edited environments, much like Wikipedia, with real-time updates from services like Twitter, connected to users' mobile phones.
Further down the road, Schmidt sees the newspaper industry coming to resemble the television industry, with a majority of free content, balanced out with some pay-per-view content.
However, he said the environment must remain ad-funded because subscriptions and micropayment models work on scarcity, adding "the internet distribution model doesn't work on scarcity, it works on ubiquity".
Blog posts of the newspaper crises:
- Schmidt micro payments and subscriptions will happen
- Bad day to kill print in Detroit/Is there an e-reader future?
- US newspaper crises accelerates as Senator bids to keep business afloat
- Free lunch is over says The Economist as Indy talks charging.
- This is not a newspaper website (Seattle Post-Intelligencer goes digital).
- Would you buy a failing newspaper?
- Paid for content high on Guardian wish list.
- Time Inc considers charging subscription fees.
- How US newspapers are failing and the local future.
- Newsday -- beginning of the end for free content?
- Is it time for newspapers to start charging for content?
- Could the New York Times go under?
- The end of print for the Independent.
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