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Web Publishers Eye Your Wallet

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Pat Kenealy, International Data Group's kinetic chief executive officer, has a particular fondness for analogies. To him, "Google is like a newsstand on the internet," "bloggers are like pamphleteers" and business journalism is "really just another name for information arbitrage."

Because IDG publishes 300 tech magazines, newspapers and websites -- everything from Computerworld to InfoWorld to NetworkWorld to PC World -- Kenealy has a unique vantage point from which to make sense of online media.

So when he thinks of the future, what analogy comes to mind?

Television.

"In 1955, TV was free," Kenealy said, "and two generations later most people pay for it. There was a built-in reluctance to pay for TV until it got so much better than broadcast. That's what I think will happen with the internet."

Although there is far too much synonymous content on the web for every publisher to charge for news, if Kenealy is right, you will see what has been called "the Balkanization of online media" -- a digital world where many publishers will hide their products behind gates, far from search-engine crawlers.

Just like we got used to paying extra for cable to receive better reception in urban areas, movies on demand and far more choices and channels -- in my case, don't even think of asking me to go without HBO -- Kenealy believes we will get used to paying for internet content. After all, to draw another analogy, we got used to paying $1.50 or so at some ATMs -- and that's to withdraw our own money.

Imagine a world where you could have ready access to thousands of different types of content and purchase anything you like on the spot. Although it sounds like that old Qwest TV ad for broadband, in which a clerk at a seedy hotel promises a traveler that in his room he will have access to "every movie ever made, in every language, any time, day or night," Kenealy sees it as more akin to a newsstand.

"All those magazines are there for the browsing," he said. "You leaf through a magazine you like, you buy it for $6. The newsstand gets $2; the magazine publisher gets the rest. And if you really like it, you subscribe."

The only thing slowing down the move away from free content is the sorry state of micro-transactional software. Once all the bugs are worked out, the free internet gateway in which publications generate revenue from ads will slowly morph into another, more-lucrative business model: gated content.

Full Story.

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