James Murdoch set out the battle lines for the future of online news in his MacTaggart lecture at the Edinburgh International Television Festival 2009 last night.

“As Orwell foretold, to let the state enjoy a near-monopoly of information is to guarantee manipulation and distortion,” he said. The next 18 months will almost certainly see the closure of a number of major national and regional titles close. Circulation and ad revenues are falling.

Newspapers need to start charging for their content on the web. But in the short term this could hasten their demise driving traffic to sites that don’t charge notably the BBC.

“Dumping free, state-sponsored news on the market makes it incredibly difficult for journalism to flourish on the internet. Yet it is essential for the future of independent digital journalism that a fair price can be charged for news to people who value it,” said Murdoch.

The BBC is distorting the market for online news as it will never charge for its content because of its funding structure.

The full text of the MacTaggart lecture is posted on Broadcast’s web site.