Murdoch's strategy isn't to profit off online news at all - it's to cultivate an industry-wide strategy that makes online news completely unprofitable. If people are forced to pay for online news, they're more likely to switch back to print.
The problem with this strategy is, of course, that while News Corporation can certainly strongarm lesser corps into following their actions lock-step, it's notoriously harder to convince a ragtag band of hacker journalists with a wifi card, laptop and camcorder as their biggest overheads to follow suite - they've less to lose, and less for Murdoch to threaten. And even if you do, there's a few thousand others you have to coerce as well.
"The problem with this strategy is, of course, that while News Corporation can certainly strongarm lesser corps into following their actions lock-step, it's notoriously harder to convince a ragtag band of hacker journalists with a wifi card, laptop and camcorder as their biggest overheads to follow suite - they've less to lose, and less for Murdoch to threaten."
The "rag-tag band of hacker journalists" is a silly bit of romanticized fiction. Even if a few "rag-tag" journalists exist, and even if they manage to produce hard news in some semi-legitimate form, they've got to feed their families, too. Real reporters have full-time jobs. They can't do it for free.
One of my biggest pet peeves with the technology industry is that highly paid programmers -- intellectual property professionals! -- act as though content is just some sort of data stream that springs fully formed from the earth's core. They seem to believe that they're entitled free access to this content, and that the "dinosaur" industry of "old media" is doomed to failure because of the overwhelming success of their brilliant new business insights (namely: people like getting stuff for free). In order to believe this myth, however, you need to completely disregard the fact that the rotting corpse of the "old media" is the fuel that keeps the new media going.
Someday soon we're going to reach the end-game: ad-blocking will become ubiquitous in browsers, and this long, strange nightmare of "free" content and "zero marginal costs" will have to yield to the simple reality that content costs money to produce. We've got to stop investing in the childish notion that we can all become bazillionaires by aggregating other people's hard work with a comment thread.
Put another way, he's leaving a gap that can be filled with very little overhead. What happens if big news corps refuse to be online? Someone else will be online. The latter will be read.
"""It is not, what’s more, merely that Murdoch objects to people reading his news for free online; it’s that he objects to—or seems truly puzzled by—what newspapers have become online. You get a dreadful harrumph when you talk to Murdoch about user-created content, or even simple linking to other sites. He doesn’t get it. He doesn’t buy it. He doesn’t want it.
Every conversation I’ve had with him about the new news, about the fundamental change in how people get their news—that users go through Google to find their news rather than to a specific paper—earned me a walleyed stare."""
The newspaper industry has gotten itself into an interesting predicament.
The reason nobody wants to pay for news online is that they are used to it being free, and that it is so easy to go to a competing newssite if one starts charging. But history shows that people are willing to pay for news - millions have done so for many years via subscriptions and newsstand sales. If all online newssources cost money I'm certain millions would start paying, I know I would. But if only a few started charging I would simply switch to a competing free source. If NY times started charging money I would switch to NY Post.
It's classical game theory - if everyone agrees to charge the industry will be much better off, but if there are a few defectors they will get all the eyeballs and marketshare.
If Murdoch wants to charge for the content, then they better remove barriers to consuming their content once I have paid:
1. PDF version of the newspaper (maybe?)
2. *FULL* article text in RSS feed body
3. Little to no advertising.
Emphasis on the second point. Obviously I would have to authenticate to gain access, but the whole point of the 'teaser' text in RSS feeds is to drive you back to the side for ad impressions. If I'm already a paying customer, then I shouldn't need to be 'driven' back to the site if I don't want to.
I'm still trying to work out if people buying newspapers was ever part of their core business model. I'm pretty sure they made a loss on sales but got the money back on advertising. If that is the case then they're just bug losers since advertising revenue has dive-bombed and created an unsustainable business.
It's easy to charge for high-quality national news. In America, there are basically three sources of this: The New York Times, The Washington Post, and the Wall Street Journal. If all three start charging for news that can only be found in those publications, they'll be fine. Cable news websites don't currently offer the same quality of news as those three do, and function more as of a competitor to USA Today.
Local news is where things get more complicated. Local newspapers have plenty of competition from TV station websites that suck, but probably don't suck enough to make people want to pay for news. Most papers have already stripped themselves so thin that they don't offer much more than aggregated bloggers and press releases could. In-depth journalism has been relegated to the alt-weeklies. I think there are several ways local newspapers could make more money online, but they seem more interested in laying off people to cut costs than figuring out how they're going to survive.
The elephant in the room is that the quality of 99% of journalism is so low that no one in their right mind would pay for it. Murdoch is a major purveyor of this rubbish.
Will I pay for warmed over wire service I can get in the original elsewhere? No. Would I pay for well researched investigative reporting? Maybe. But Murdoch would be changing his whole approach if he actually engaged in that.
The death of the daily newspaper doesn't have to mean the death of the printed newspaper. I quit the subscription to all my daily newspapers a while back, not because I thought they where bad, but because I simply didn't have time to read them every day and all that I really got out of it was huge piles of paper I had to carry to the recycling bin every week. I do however still subscribe to several weekly and monthly magazines and regularly buy the weekend edition of my favourite newspapers since on the weekend I have time to read. For day to day news I use the newspaper web sites, but when I have time to read long well researched articles I want to do it on paper and sitting in my favourite chair.
So that is the direction I think the newspapers should be taking. Stop trying to put out a paper every day, settle for one to three times a week. Keep your website updated with day to day happenings and time sensitive news and use your print media to write longer, more researched articles.
I've been suspicious of Murdoch's motivations in the past (vis a vis the particular bias of Fox News) but this for-pay initiative seems like a testable proposition.
If Murdoch can decide, one day, to charge for "news," and if this sentiment is echoed all over, and if it turns into implementation, then it will serve as yet another example of consolidated, command-and-control media. It's one thing to enable an "echo chamber" where dozens of media voices repeat what the others are saying, but changing the business structure of the medium itself will be another thing entirely.
Like some other commenters here, I would like to believe that the sheer numbers involved in the amateur news-generating population would cause Murdoch's strategy to be impossible... and yet, I've witnessed other "impossible" things seemingly happen according to Murdoch's will.
I think this article ultimately give devastating critique of that kind of thinking: ... the news business, supported for a hundred years by advertising, whose core skill has been selling advertising, believes it must right away, this second, re-create itself with a new business model where advertising is just the cream on top and where it’s the consumer who pays the true cost of newsgathering.
Print newspapers are the buggy whip industry of the 21st century. Look at the Seattle Post Intelligencer.
“Rupert Murdoch is going to battle against the Internet, bent on making readers actually pay for online newspaper journalism…” People were not willing to pay for their product printed on paper when it came loaded with tons of money saving coupons, I doubt very many people will take out a credit card and pay for it online on a regular basis.
I think the news industry has more than a content delivery mechanism problem here. I certainly won’t be buying any shares of their stock based on this new business model proposed by Mr. Murdoch, lol.
[+] [-] JCThoughtscream|16 years ago|reply
The problem with this strategy is, of course, that while News Corporation can certainly strongarm lesser corps into following their actions lock-step, it's notoriously harder to convince a ragtag band of hacker journalists with a wifi card, laptop and camcorder as their biggest overheads to follow suite - they've less to lose, and less for Murdoch to threaten. And even if you do, there's a few thousand others you have to coerce as well.
Murdoch's playing a rigged game of whac-a-mole.
[+] [-] timr|16 years ago|reply
The "rag-tag band of hacker journalists" is a silly bit of romanticized fiction. Even if a few "rag-tag" journalists exist, and even if they manage to produce hard news in some semi-legitimate form, they've got to feed their families, too. Real reporters have full-time jobs. They can't do it for free.
One of my biggest pet peeves with the technology industry is that highly paid programmers -- intellectual property professionals! -- act as though content is just some sort of data stream that springs fully formed from the earth's core. They seem to believe that they're entitled free access to this content, and that the "dinosaur" industry of "old media" is doomed to failure because of the overwhelming success of their brilliant new business insights (namely: people like getting stuff for free). In order to believe this myth, however, you need to completely disregard the fact that the rotting corpse of the "old media" is the fuel that keeps the new media going.
Someday soon we're going to reach the end-game: ad-blocking will become ubiquitous in browsers, and this long, strange nightmare of "free" content and "zero marginal costs" will have to yield to the simple reality that content costs money to produce. We've got to stop investing in the childish notion that we can all become bazillionaires by aggregating other people's hard work with a comment thread.
[+] [-] netsp|16 years ago|reply
I'm not going back to print. Rupert be damned.
[+] [-] rms|16 years ago|reply
You have a great point there. Rupert Murdoch has a true love for the printed newspaper.
[+] [-] n-named|16 years ago|reply
Every conversation I’ve had with him about the new news, about the fundamental change in how people get their news—that users go through Google to find their news rather than to a specific paper—earned me a walleyed stare."""
Is this some sort of joke?
[+] [-] mixmax|16 years ago|reply
The reason nobody wants to pay for news online is that they are used to it being free, and that it is so easy to go to a competing newssite if one starts charging. But history shows that people are willing to pay for news - millions have done so for many years via subscriptions and newsstand sales. If all online newssources cost money I'm certain millions would start paying, I know I would. But if only a few started charging I would simply switch to a competing free source. If NY times started charging money I would switch to NY Post.
It's classical game theory - if everyone agrees to charge the industry will be much better off, but if there are a few defectors they will get all the eyeballs and marketshare.
I wrote about it some time ago http://www.maximise.dk/blog/2009/03/online-news-and-prisoner...
[+] [-] pyre|16 years ago|reply
[+] [-] Quarrelsome|16 years ago|reply
[+] [-] natrius|16 years ago|reply
Local news is where things get more complicated. Local newspapers have plenty of competition from TV station websites that suck, but probably don't suck enough to make people want to pay for news. Most papers have already stripped themselves so thin that they don't offer much more than aggregated bloggers and press releases could. In-depth journalism has been relegated to the alt-weeklies. I think there are several ways local newspapers could make more money online, but they seem more interested in laying off people to cut costs than figuring out how they're going to survive.
[+] [-] ErrantX|16 years ago|reply
There might be logic in that approach; he's certainly done ok with it so far...
It will be interesting to see what happens.
[+] [-] djehuty|16 years ago|reply
Will I pay for warmed over wire service I can get in the original elsewhere? No. Would I pay for well researched investigative reporting? Maybe. But Murdoch would be changing his whole approach if he actually engaged in that.
Do some real reporting, and make us care.
[+] [-] dagw|16 years ago|reply
So that is the direction I think the newspapers should be taking. Stop trying to put out a paper every day, settle for one to three times a week. Keep your website updated with day to day happenings and time sensitive news and use your print media to write longer, more researched articles.
[+] [-] idm|16 years ago|reply
If Murdoch can decide, one day, to charge for "news," and if this sentiment is echoed all over, and if it turns into implementation, then it will serve as yet another example of consolidated, command-and-control media. It's one thing to enable an "echo chamber" where dozens of media voices repeat what the others are saying, but changing the business structure of the medium itself will be another thing entirely.
Like some other commenters here, I would like to believe that the sheer numbers involved in the amateur news-generating population would cause Murdoch's strategy to be impossible... and yet, I've witnessed other "impossible" things seemingly happen according to Murdoch's will.
[+] [-] joe_the_user|16 years ago|reply
[+] [-] Scott_MacGregor|16 years ago|reply
“Rupert Murdoch is going to battle against the Internet, bent on making readers actually pay for online newspaper journalism…” People were not willing to pay for their product printed on paper when it came loaded with tons of money saving coupons, I doubt very many people will take out a credit card and pay for it online on a regular basis.
I think the news industry has more than a content delivery mechanism problem here. I certainly won’t be buying any shares of their stock based on this new business model proposed by Mr. Murdoch, lol.
[+] [-] Adam503|16 years ago|reply
[+] [-] nopinsight|16 years ago|reply
I think 'humored' above should be 'honored'. What do you guys think?
[+] [-] joe_the_user|16 years ago|reply
[+] [-] chinmi|16 years ago|reply
[+] [-] newsdog|16 years ago|reply