Google is creating a micropayment system that will allow newspaper publishers to charge users to read their content.
“Google believes that an open web benefits all users and publishers,” the company said in a document to the Newspaper Association of America. The document was obtained by the Nieman Journalism Lab at Harvard University.
“However, “Ëœopen’ need not mean free. We believe that content on the Internet can thrive supported by multiple business models — including content available only via subscription.”
“In addition, a successful paid content model can enhance advertising opportunities, rather than replace them.”
In the past, newspaper publishers have been upset by Google’s News feature, which gathers links to articles for readers, free of charge. Google has responded to that claim, stating that Google News is actually helping publishers by increasing their traffic on the Web.
Now, the print forms of media are suffering due to a drop in advertising interest. The NAA has been a part of an effort that will find new ways to charge readers for content.
The NAA issued a request for paid content proposals to several major tech firms, including Google.
“It’s surprising, given the newspaper industry’s tenuous relationship with Google, that the company was involved at all,” Nieman Lab noted.
The proposal would create an extension of Google Checkout in order to allow users to buy digital and physical goods from merchants, who will be able to set up recurring billing and subscriptions.
Additionally, Google said it is in the early stages of developing a micropayment system that would be “available to both Google and non-Google properties within the next year.”
“The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants and over time,” Google said in the proposal.
“Google will mitigate the risk of non-payment by assigning credit limits based on past purchasing behavior and having credit card instruments on file for those with higher credit limits and using our proprietary risk engines to track abuse or fraud.”
Google would be likely to share its earnings with newspaper publishers, much like Apple does with its iTunes store.
“While we believe that advertising will likely remain the main source of revenue for most news content, a paid model can serve as an important source of additional revenue,” Google said.
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