Reports: Rupert Murdoch to Charge for All Online Content

No more free ride

No more free ride

Rupert Murdoch, the Australian media baron who controls the Wall Street Journal, the New York Post, Fox News and dozens of other print and broadcast properties, says he will begin charging for all the online content of his newspapers and TV news channels sometime within “this financial year,” as his News Corp. posts a $203 million quarterly loss in part on plunging ad revenue.

From the Financial Times:

The comments by News Corp’s chairman came as he predicted a “high single digit” rebound in the group’s operating profits next year. The worst of the media sector slump might be behind the company, he said, as he reported “some good signs of life” in advertising.

“All content” apparently includes FoxNews.com, the Web site for the popular cable news channel, one of the few bright spots in an otherwise lackluster News Corp. earnings report. Fox reported operating income up 50 percent and primetime ratings up 45 percent from the same quarter last year.

Of his decision to charge for online content, Murdoch said:

“Quality journalism is not cheap. An industry that gives away its content is simply cannibalising its ability to produce good reporting.”

Murdoch’s lockdown would be a drastic change in strategy. While the Wall Street Journal has charged for online content for years, Murdoch’s other sites, like the New York Post and Fox News, are free. Murdoch had said he would begin experimenting with new paid models on his Web sites next year, but this week’s News Corp. earnings report have obviously prompted a change in thinking.

After the jump, more about what the move means, some questions it raises and other notes from Murdoch’s earnings report.

Murdoch’s move would also mark the first time a major media conglomerate has abandoned the “free” online news model for a “paid” model on such a large scale, and it will likely give other large media companies an excuse to pursue their own paid models in a similar fashion.

Already, proponents of the free model are criticizing the plan. TechDirt, noting that the subscription model works for the Wall Street Journal, wonders whether people will want to pay for News Corp.’s other sites, where the news quality isn’t as good and the monetary benefits to subscribing isn’t clear. Plus, those sites already have plenty of free competition. Putting up the wall will

stagnate any sort of growth, piss off advertisers, and allow competitors to take a giant leap forward — all in one shot.

New media scold Jeff Jarvis, writing in the Guardian, says that for most media entities, “pinning hopes for the survival of news on charging for it is not only futile but possibly suicidal.” Locked down content prevents search engines like Google from crawling news sites, thus limiting content’s wider exposure to the Web. Rather than embrace the Web, Jarvis says newspapers — late to the Internet game — are still trying to apply an outdated business model to the new “link economy.”

The author of a new report on newspaper Web site traffic thinks such openess will be necessary, with time spent at newspaper Web sites now estimated at less than 1 percent of all time spent online.

“The dialogue in the industry should not be about building paywalls, punishing aggregators, tweaking copyright laws or anything else that would constrict, rather than build, the online audience for newspaper content. The dialogue should be primarily about transforming newspapers into online-first digital enterprises.”

To that end, some competitors are already happy over the prospect of a locked down News Corp. Gawker publisher Nick Denton, for one, dreams of the day when his gossip rival, the New York Post’s Page Six, is stuffed behind the pay wall.

Subscription? Micropayments?

And what exactly will the pay wall look like? Murdoch hasn’t yet provided details about the nature of the model. Last month, Murdoch told TheStreet that micropayments aren’t a good alternative to ad revenue, and that subscriptions similar to what the Wall Street Journal offers might be a solution. But there were no new details today.

The subscription possibility is intriguing, however, given the size of Murdoch’s media empire. What if readers could pay a flat monthly or yearly fee to access not only the Wall Street Journal, but all the other Murdoch papers and news sites around the world? What does it mean competitively, to smaller news providers, when a large conglomerate of News Corp.’s size can offer so much news content for one fee?

Other Notes

Murdoch’s plans for charging for content don’t end online. The New York Post notes comments from News Corp. COO Chase Carey, who says the ad-supported broadcasting business not longer works. “A scenario could involve charging cable and satellite operators to retransmit the Fox broadcast network,” the newspaper says.

Murdoch also took aim at Amazon’s would-be print savior, the Kindle, criticizing the way it controls the financial and consumer relationship. Meanwhile, he praised Sony’s new reader. (He also noted that “Apple is said to be coming out with a reader before the end of the year.” That’s likely a reference to the rumored Apple tablet touchscreen computer.)

Fox Interactive Media — mainly the has-been social-networking site MySpace — was a big part of News Corp.’s losses this time, on charges related to MySpace’s recent layoff. This, as MySpace traffic drops and Facebook continues to grow in traffic and members.

What Do You Think?

Is the shift toward paid online news content inevitable? Necessary? How will Rupert’s move influence other media and affect competitors? Let us know in comments.

Related

News Corp. quarterly report and Webcast

Will people pay? – Mediaite

“Fail written all over it” – Valleywag

Rupert’s last stand: Making you pay for it – Newser

“We’ll be asserting our copyright at every point.” More notes from Murdoch’s call – PaidContent.org

Fox News: Keeping News Corp. afloat – NYTimes

The link economy: Reuters says linking, excerpting, sharing are good for the new business – TechDirt

MySpace in January: Facebook traffic is big, but at least we make money – Silicon Alley Insider

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4 Responses

  1. […] only the rich need to be “in the know.” I think it’s more likely that Hussman and friends got used to astronomical profits (just under 28 percent since 2000 — and that’s after […]

  2. […] only the rich need to be “in the know.” I think it’s more likely that Hussman and friends got used to astronomical profits (just under 28 percent since 2000 — and that’s after […]

  3. […] only the rich need to be “in the know.” I think it’s more likely that Hussman and friends got used to astronomical profits (just under 28 percent since 2000 — and that’s after […]

  4. […] only the rich need to be “in the know.” I think it’s more likely that Hussman and friends got used to astronomical profits (just under 28 percent since 2000 — and that’s after […]

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