News Corporation will begin charging readers of online versions of its various publications from next year in a move that chairman Rupert Murdoch hopes will spur other publishers to shift away from free news content on the internet.

Murdoch broke the news after the global media giant reported that it ended its business year with a net loss of $3.4 billion due to hefty charges of $9.2 billion. The sprawling US media empire had posted a net profit of $5.4 billion a year earlier.

"We have a lot to do and we have to face the challenges of free-to-web television and digital newspapers," Murdoch said during a midweek conference call with analysts and reporters. "We are very hopeful that we can produce significant revenues from the sale of digital delivery of newspapers."

Murdoch acknowledged that there is nothing to stop online readers from switching to websites where stories are accessible for free, but the chief executive said he believes the competition will follow his company's lead. "We just have to make our content better and differentiate it from other people," he said. "I believe if we are successful we will be followed by other media."

The number of website hits triggered by celebrity scoops posted online by News Corp is "astronomical," said Murdoch, who added he thinks people will be "happy" to pay for such stories.

Online income for newspapers has failed to offset plunges in revenue from advertising in print publications, pressuring the industry to break from the free-story model that has been the Internet norm.

News Corp already charges for its Wall Street Journal website and claims it is the most successful paid news site on the internet. The Wall Street Journal is sold as digital content for Amazon.com's Kindle electronic readers, but News Corp says it is irked that Amazon doesn't share the identities of subscribers.

"Kindle treats them as their subscribers not as ours, and I think that will eventually cause a break between us," Murdoch said. However, News Corp is not likely to make an electronic reader that people could use to read digital newspapers because "we are not in the hardware business".

The strategy to extract fees from online readers is still lacking in many details, but News Corp executives have revealed they are in talks with Sony, which makes e-readers that compete with Kindle devices. Sony is on board with the notion that News Corp should know who is subscribing to digital versions of the Journal, according to Murdoch.

Most existing pay models at major news publications, News Corp's The Wall Street Journal and its rival Financial Times being the most prominent, allow casual users to read articles for free, but once value is established - that is, people start coming back for more - they ask for money. There's no direct value-addition, other than to make it possible to read content without jumping through hoops.

But charging readers for all content has not proved very successful so far, as people expect information on the net to be free. The New York Times hoisted a pay wall around its columnists, only to find that everyone stopped reading them. After their star journalists started to complain, the NYT abandoned the strategy.

The Wall Street Journal and Financial Times have actually had only limited success in charging for specialist financial news and comment. The proliferation of free online sources, aggregated by the search giant Google, has doomed to failure any attempt by others to extend such charges to general news content.

Rupert Murdoch's announcement that all News Corp's newspaper websites – including the Sun, News of the World, Times and Sunday Times in the UK – will charge by next year is therefore a sign that the news industry is running out of options.

The old business model – cover price plus ad revenue – has been blown apart by the loss of classifieds to online networks and collapse of cover-price revenue due to falling sales. The hoped-for cash from online advertising has not materialised, at least not on the scale that would support the kind of journalism practised by serious newspapers.

At the same time, analysts believe that Murdoch is hugely influential and could orchestrate a sea change for his contemporaries in the news business. His explanation that charging for news was natural because "quality journalism is not cheap" was virtually identical to the phrasing used by New York Times executive editor Bill Keller in an interview last December.

Murdoch said in May that his company would test new pay models on one of its sites, adding that News Corp would charge for some of its flagship content "within the next 12 months" and that it was looking at charging for all content. He has assembled a global team, personally overseen by himself, to determine the best way to charge for content-and "save journalism." Murdoch predicts "significant revenues" from the paid-content model.