The Prisoner’s Dilemma of online news sites

From Slashdot News Story | Murdoch Says, “We’ll Charge For All Our Sites”

Cooperation to solve prisoner’s dilemma? (Score:5, Insightful)

by Willbur (196916) on Wednesday August 05, @11:49PM (#28967475)

Online news has been stuck in a prisoner’s dilemma situation (from their POV). If everyone charged for news, then they’d be OK. When only some people charge for news, those that charge lose their audience. That drives the system to the equilibrium of noone charging for news. From the consumer’s POV this is a good thing.

Because Murdoch owns so much of the news, he might be able to break out of the current poor (for newspaper publishers) equilibrium. Of course, if he can do so then he’s pretty much demonstrated that he has enough of a monopoly that market power isn’t working. There would be evidence for an anti-trust case against him.

The other problem with all this is that it assumes that the problem newspapers are having with revenue is caused by the cannibalisation of the print editions by the online editions. I understand, although I cannot provide evidence, that the real problem is that the classified market has gone away. The newspapers lunch got eaten by eBay and Craigslist, not cannibalised by their own online offerings. And if this is true, then raising prices for consumers might increase revenue, but it wont return it to where it was.

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