The Washington Post reports that Samuel Zell, the billionaire in the process of purchasing Tribune Co., doesn't think news outlets can afford to continue to give away their content online to companies like Google. His opinions carry significant weight because the Tribune Co. owns such important newspapers as the Chicago Tribune and the Los Angeles Times in addition to other properties like the Chicago Cubs.
Zell is upset because while the average consumer of news is increasingly getting their information online, his personal slice of cyberspace is not making any money. His concern regarding internet revenues is important to the newspaper business because the crown jewels of the news world, the Chicago Tribune and particularly the Los Angeles Times, are actually losing circulation. This overall trend has been going on for at least the past decade and seems to be accelerating.
Zell's comments regarding Google aren't really even specific to the newspaper industry. Search engines like Google essentially freeload off the content that everyone else on the internet generates. If all sectors of the economy defended their intellectual property with the vigor of book publishers, Google's business model would implode. In a real sense, Google receives a significant subsidy from all the content they index.
Zell obviously wants a larger share of the advertising revenues derived from viewers of his newspapers. The outcome of his push for compensation could have implications for the rest of the internet. Content is king, but also largely free. If a spat over the distribution of advertising revenues gets too intense, content providers may move in the direction of a subscription-only model. And that would be a shame, because information just wants to be free.
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