Matthew Buckland has a great guest post on Silicon Valley Watcher looking at Google’s Newspass payment system for publishers. (It’s cross-posted from memeburn.com) Buckland compares the value proposition for users with Google’s system and the system that Rupert Murdoch has instituted at The Times. He likens Newspass to a cable television subscription in which a consumer makes a one off, predictable payment to receive a package of content each month. He says:
Take the analogy of satellite TV. You pay once and you get a bouquet of hundreds of channels. The transaction is simple and easy. You know you’re getting good value for money too because there is an economy-of-scale effect at work. Now imagine another scenario: What if you have to pay individually for each TV channel and go through the effort, time and extra cost to do so. It’s a no brainer really.
Of course from the consumer’s point of view, it makes a lot more sense to pay once for a bundle of content rather than paying subs to several different providers or micro-payments for individual pieces of content. However, if newspaper groups had the rationality to think about creating value propositions for their readers, they might have spared themselves the mess that they are in.
The big question, as Matthew highlights, is whether a significant number of publishers will choose to join Newspass or create their own payment system. I’m not sure that such a payment system would be possible in all jurisdictions based on competition/anti-trust law. That notwithstanding, knowing publishers, I would expect them to lobby for a relaxation of anti-competition laws in their own countries to make such a system possible rather than partner with Google, which they have as Matthew rightly points out, a love-hate relationship with. I’d say that it’s bordering on hate-hate these days, but that’s a matter of interpretation.
Matthew sees Google as a “dispassionate third party”, but with the egos in publishing and the ‘not invented here bias’, I’m not sure that publishers see Google as dispassionate or without skin in the game. Murdoch and his lieutenants, though possible an extreme example, refer to Google as a “parasite”. For them to be pushed into partnering with the likes of Google, they would have to be pressured into seeing past their almost self-destructively hyper-competitive natures and see that some loss of advantage was worth new revenue streams. In fact, I would see them being more open to partnering with another company just in an attempt to screw Google. Despite the existential threat facing some newspapers and newspaper groups, I’m not sure that they have seen the light, by which I mean the light some reportedly see with near-death experiences.