Who Will Be Right — Murdoch or Schmidt?

Rupert Murdoch is continuing his plans to erect a pay-wall around his news websites but Google CEO Eric Schmidt is right, I think, when he says: “In general these models have not worked for general public consumption because there are enough free sources that the marginal value of paying is not justified based on the incremental value of quantity. So my guess is for niche and specialist markets … it will be possible to do it but I think it is unlikely that you will be able to do it for all news.”

As I have written elsewhere on this blog, a pay-wall will only work if the vast majority of major news websites charge for content and that is unlikely. If traffic decreases, then advertising revenue will fall-off. Only the purveyors of premium news in business and sports coverage and other niche areas will be able to charge — although even in sports, sites that have been charging for content are finding great resistance.