The decision has been driven by the industry-wide slump in advertising revenue and a piss-poor financial report (News Corp, the mother ship, made a £2 billion loss in the most recent financial year) but really, it was always inevitable and to be honest with you I'm surprised it hasn't happened before now.
Whether it'll fly is another matter. The New York Times experimented with premium content last year or the year before, and as far as I know they were quite pleased with the results. They discontinued the experiment, as I understand it, because projected advertising revenues easily met operating costs, but now I hear they're considering reintroducing it.
Would it work with titles like The Times and The Sun? I dunno. I can't see people paying to get access to sections of The Sun when the paper itself is so cheap, unless they start posting those pics of Britney Spears getting out of limousines without her underwear. I can see some sections of The Times website being premium-walled and people subscribing to them - Mike Moran does a very good film section called Blockbuster Buzz which doesn't appear in the physical newspaper, and I can see the comment community paying to continue to air their views. But will this notably defray a two billion quid loss? Nah.
Of course, what Rupert has done is raise the great question of what a newspaper does in the age of the Internet. The Sun and Times websites both feature content that's unavailable in the paper you pick up at the newsagents'. I think the Times site is really rather a lovely piece of work - it looks good, it links well, it's easy to read, and the comment apparatus is easy to use. The Sun's site looks more or less as you'd expect it to - like being shouted at by an enormous sweaty man covered in tattoos.
But the whole thing boils down to this: it costs money to report the news. It costs money to put out a newspaper, and newspaper companies make that money back chiefly by selling advertising space.
In a golden age - and the past decade or so is starting to look that way - a paper could afford to give away its content online because the advertising in the physical paper paid for it. That's not happening to the same extent any more, and now papers can't afford to hand out news for free.
In a way, I'm glad Rupert's made this decision - although as I said, it could go pear-shaped on him. In general, the Fleet Street papers have reacted in different ways to the internet. The Guardian's site isn't really a newspaper site any more - it has content from the paper, but it relies heavily on blogs and its Comment Is Free feature and it led the way in featuring podcasts and resembles a `web portal' more than a newspaper site these days. The Daily Telegraph has, for a while now, been running little television-news-type video items, of varying quality. The Daily Mail has reacted by becoming the most content-rich newspaper website in the country - they just put everything online. Everyone, of course, has blogs.
The News International decision is going to concentrate minds about what to do with the internet. Obviously, big brains at The Guardian and the Telegraph will be thinking about paid content now, if they weren't already. They'll be thinking things like: what do we give away? What do we ask people to pay for? The Financial Times, which already has annual subscriptions for over a hundred quid a pop is, I understand, thinking about adding more premium content.
Now, this might work and it might not. The audience has become used to the free model, and how they react to the introduction of premium content is obviously going to be desperately important. My guess is the websites will lose readers. And my guess is also that they'll be competing to offer inducements to readers to pay subscriptions. It could be a disaster. Or it could be a success. There's no way of telling. We'll see.
Will I pay to read the news online? Probably not.