Will papers' pay walls topple the web’s freedom to pillage news?

A further 1,200 news organisations worldwide have signed up with Journalism Online, a new media payment firm whose clients are expected to start rolling out fees next year. Even The Guardian, a vociferous champion of free content, is preparing to charge for an iPhone application giving access to its website.

Publishers are making a bold attempt to regain financial control in a world where their content has been broken into its constituent stories - what Eric Schmidt, chief executive of Google, calls "the atomic unit of consumption" - and distributed across the web for free.

In America, regional papers have closed as readers have migrated online and advertising has collapsed. This year US newspaper advertising will total about $28 billion (£17 billion), $10 billion lower than last year and sharply down from the record $49.4 billion in 2005, according to Alan Mutter, a former newspaper executive who writes the influential blog Reflections of a Newsosaur. "Online advertising has dropped for the last six quarters. It's clear that online advertising isn't enough," he said.

John Fry, chief executive of Johnston Press, said: "We have a core asset, which is local news and information and we have to look at how we maximise the return on that asset."

He said the group, which runs more than 300 weekly and daily papers, polled readers ahead of the move to charge for online access: "If you ask: 'would you like to pay for something you get free?', you can guess the answer. The real question is will they pay?"

That question is pitching large parts of the news industry against the biggest player on the net, Google. While online advertising has made Google the world's most powerful web company, it has so far proved a disappointing revenue source for traditional media players.

News executives, most notably Rupert Murdoch, chairman of News Corporation, have lambasted Google for building a business based on other people's content without rewarding them for their labours.

News Corporation is believed to be in talks with Microsoft that could see its content move exclusively to Bing, the technology giant's search engine.

Last week, Murdoch gave a speech to the Federal Trade Commission, the US consumer protection agency, which was holding a workshop entitled From Town Crier to Bloggers: How Will Journalism Survive the Internet Age?

"There are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production," he said. "Some rewrite, at times without attribution, the news stories of expensive and distinguished journalists who have invested days, weeks or even months on their stories - all under the tattered veil of fair use.

"These people are not investing in journalism. They are feeding off the hard-earned efforts and investments of others."

Matt Brittin, Google's UK boss, defended the web giant when he gave evidence to the House of Commons culture, media and sport committee on the future of local and regional media. "I've read in newspapers, oddly enough, some of the comments that have been made about parasites. I want to make one thing incredibly clear - we do not steal content," he said.

He argued that Google was "like a virtual newsagent", delivering 100,000 clicks a minute to news publishers' websites.

Google moved to address some of the criticism last week by limiting free access to stories on paid-for news websites, something that has been a sore point for publishers. But newspaper executives said it was a small move that did not address the real issue: all those clicks are meaningless if they do not generate a real return for the expensively-created content they are linking to.

The consequences of allowing all this content to go free will be dire, said Douglas Rushkoff, an American media commentator and author. He said the view among Google's supporters that online distribution is somehow more valuable than the underlying content "undermines the entire conception of human beings creating value with their time and energy and thinking".

"Let's be clear. 'Free content' means Google is getting the money for it," said Rushkoff. "I'm not arguing against the idea that people should be able to get this free, I'm arguing against the idea that people think this is free. It's not. The only difference is that the company that is getting paid to deliver our eyeballs to that content doesn't pass the money down to the people who created that content."

Unless something is done to address the issue, Rushkoff said, professional journalism could collapse leaving society to rely on an army of online amateurs.

"There is a tremendous value to a literate, self-expressive amateur society that can't be overemphasised. At the same time, when corporations and governments are employing highly-professional communications managers, it requires that people have professional journalists who can deconstruct all this public relations.

"People will not understand that until they are living in something akin to fascism."

Jeff Jarvis, creator of the Buzzmachine blog and author of What Would Google Do?, disagrees: "I'm not religiously saying everything has to be free. I'm saying free is a smart business move because it is going to bring you more audience."

Jarvis argues that we now live in a "link economy" where the value of content is created by the amount of links it generates online and how those links are leveraged.

"All you need is one copy of anything online. It's the links to it that bring value," he said. Charging for content will sever those links, Jarvis insisted. "I've always said that if you can charge, God bless you. What I'm saying is it's not going to work and you'll make less money doing so."

Jarvis said that arguments with Google were a distraction from the news industry's real problem - that too much money is being wasted on old means of production generating information that is available elsewhere.

Rushkoff countered that while it was true that the media industry needed to adjust to the new environment, Jarvis's idea of a link economy was "vapid and idiotic".

For all the talk of free versus fees, Gordon Crovitz, co-founder of Journalism Online and former publisher of The Wall Street Journal, doesn't believe the future is so binary. He said a "freemium" strategy may work for many publishers where large parts of their sites are still available online with regular users charged a premium for more in-depth content.

"There are a lot of visitors who are quite casual and who see articles from a particular publisher quite rarely. But then there's another group of readers who are very active, go to the site regularly and are pretty good prospects for becoming paying subscribers for full access," Crovitz said.

"The happy medium here is for search engines to index the content and for publishers to control the access in order to monetise their revenues streams."

With pressure from both a cyclical downturn in advertising and a generational shift in the way publications are read, more and more publishers are looking to "monetise" online content, which they once handed out free.

"The critics say that people won't pay," Murdoch said last week. "I believe they will - but only if we give them something of good and useful value. Our customers are smart enough to know that you don't get something for nothing."