Murdoch Pay-For-Content Strategy A Dud

Words and images diminish in value, commercially speaking, because the Internet has turned everyone into a writer, publisher, anchor, newspaper editor and network producer.

"Professional" content is now freely obtained online and repurposed by users. At the same time, "professional" content is losing "mind share" to the musings and videos of peers on social sites, blogs, YouTube and other digital media venues.

Last week, media mogul Rupert Murdoch of NewsCorp. waded into this situation by announcing a "new" old business model: By next year, he will be charging for access to all his websites and enforce copyright protections through the courts. First to be "fire-walled" and no longer free is the venerable Times of London. His Wall Street Journal already is partially walled off and, presumably, so will all his sleazy tabs like the New York Post, News of the World and his Fox TV empire with its websites.

"Quality journalism is not cheap and industry that gives away its content is simply cannibalizing its ability to produce good reporting. The digital revolution has opened many new and inexpensive distribution channels, but it has not made content free. We intend to charge for all our news Web sites," he said.

More lemmings or visionaries?

He forecasted that others will follow, and another two or so media outlets said they would do the same. Some, like Barry Diller, said Murdoch's new strategy is correct because people have always paid for content.

But Murdoch and others are the King Canutes of the business world, trying to hold back the tides.

I would argue that people have not paid for journalism or television content because it has been a loss leader subsidized by advertisers for decades.

(Newspaper subscribers pay the cost of delivery, not much more, with the rest of costs covered, and profits provided, by ads.)

So the real challenge for media empires is not that people refuse to pay for content but that younger readers and viewers bypass the newspaper and TV advertisements and commercials by going online for news and entertainment.

This has forced the advertisers to reduce their spending in order to follow the under-50 year old eyeballs into the digital world where they roam. Thus advertising revenues to media outlets have been plummeting worldwide and companies are being shuttered.

This underscores the problem with Murdoch's media "solution". The only way it would work is if all the world's brand-name media outlets ganged up, monopoly-style, and decide to charge for their websites. Even so, piracy would flourish. Just one subscriber or viewer, listener or ticket-holder could steal content then peddle it all over the world or give it away then hide and resurface.

Enforcement is difficult because taking and sharing content is now done by millions, which means that armies of litigators cannot collect damages because most people would be judgment proof, or without any assets to recoup. This is what happened to the music business model.

New world, new media

Frankly, the world unfolds as it should and the media industry is adapting. Legacy media is cutting costs and growing digitally. New media has found different business models such as blogs which don't charge or pay for content then monetize their audiences by attracting advertisers if their traffic is huge.

Tax supported and not-for-profit support for "good" journalism are taking up some slack. The world's citizen journalists, with their cellphone cameras, are filling the vacuum left by the ponderous or depleted media such as the footage the world saw during the latest uprising in Iran.

Frankly, the party ended when the barriers to entry fell. The Internet meant that the Power and the Glory no longer belonged to those with millions to spend on presses and delivery or to the high priests and priestesses who wrote for them.

Everyone I know in the media is working harder than ever for less money. Frankly, it's not a disaster, nor is it reversible which Mr. Murdoch may soon demonstrate.

Diane Francis blogs at Financial Post and CanWest newspapers

 

Comments

[PragmaticStatistic]

What Murdoch fails to understand is that people writing of articles on their blogs, refering and quoting his content about Conservative and opposing views, drive traffic to his web site and his advertisiers in greater numbers than his self promotions do.

With newspapers dying, charging for his web site content will only reduce the traffic on his more profitable web sites. As a result, I can only assume Murdoch wants to limit the ability to expose the senationalized and fear generating content of Glen Beck, O'Reilly and others Murdoch's media organization hires. Murdoch must fear that the internet and the current banking industry bailout have educated the people to the fact that politicians of both political factions are more loyal to their corporate sponsors than they are to the people. That the people now question the influence business lobbying has on their government and that of their on-air spokespersons Murdoch hires.

[LMPE]

I never pay attention to any of King Rupert's pseudo-news outlets.

[Ozarks]

Pay for entry to Murdock's websites???? All I have to do is watch some republican tell some lies. Murdock just regurgitates Republican talking points. What is he going? Sue people for blogging Republican talking points ? duh

[zooperman]

It seems Murdoch is unable to see that the 21st century business model of news gathering and dissemination will no longer support billion dollar payouts to owners, hundreds of millions of dollar payouts to top executives, million dollar payout to other executives and "key" employees, and all the perks that are expected to go along with such incomes.

These people will eventually get out of the business ("Can't make a reasonable profit") and news operations will be purchased or started by normal people who are not expecting to earn millions upon millions upon billions of dollars; who will live quite comfortably on far less; who are driven to gather and disseminate news instead of driven by greed.

Sort of like pushing a reset button.

[ConfuciusSay-]

Let him charge.
His subscriber base will shrink to the faithful. And the plan will fly as well as an iron potbelly stove.

[jerichoj8]

The only way for this to have a chance is to do what he already does except ten times louder and more potent - Screaming Falsities. Luring viewers with Inflammatory Headlines and Fractional Truths.

[Ozarks]

I can get that from the National Inquirer

[larry278]

To be churlish: Bad cess to his Rupertship & all publishers who plan to charge websites & web users for using their news copy.
May other media provide reliable news copy free of charge to web sites & users which would make News Corp copy useless. That might change Mr Murdoch's mind about charging for sites to use News Corp copy, I hope.

[josephXY]

That's Reuters policy, for instance who recently told AP, the agency, to stop whining.
http://www.reuters.com/

[josephXY]

An interesting article. But there is more to it.
Bill Wyman wrote a highly article on that subject. Particularly interesting the first three points:
1. Consumers have never paid for news. Advertisers did.
And aroung this one time monopoly of distribution ads they wrapped news. Some serious, some
fluff.
And all too often newspaper publishers, their ad sales bosses, left no doubt that the whole purpose
of the paper was to lead readers to the advertising of those advertising, exposing them to that.
http://www.splicetoday.com/politics-and-media/five-key-reasons-why-newspapers-are-failing

And as far as Murdoch is concerned: it could possibly be that what for instance Fox News and those
pundits are into, the way they are creating outrage, trouble, ..., are doing their share to render
advertising useless. It could be that the perception of the media, the overall experience, is
changing. That they are increasingly regarded just as nuisance, a pain in the ...., and hence
there is certainly no such thing as pleasure watching advertising coming with all that.
And thus most of the media just useful as advertising vehicles: discount sales and fire sales.
Such advertising can be placed anywhere, provided the price is reasonable. And there are a
number of media of media who have matured to that discount-level only.
Christmas will be show again how it all works out.

[ConfuciusSay-]

Quite insightful comment here.

[vandegrasse]

My word, what a sensible thoroughly well thought out analysis and such a stunning conclusion. Bravo! I am a fan!

[Whitley2009]

The article is right. Faved.

If it's not PBS or BBC I no longer pay attention to the news.