Rupert Murdoch vs. Rupert Murdoch On Free vs. Paid News Websites

from the which-rupert-is-rupert dept

Rupert Murdoch continues to shift his position on the value of "free content" but he seems to be going in the wrong direction, and not giving anyone much confidence that he knows what he's doing. You may recall that right before he completed buying the Wall Street Journal, he claimed that the WSJ would be better off going entirely free:
"We are studying it and we expect to make that free, and instead of having 1 million [subscribers], having at least 10 million to 15 million in every corner of the earth.... Will you lose $50 million to $100 million in revenue? I don't think so. If the site is good, you'll get much more."
That was just under two years ago, and his reasoning is actually quite sensible. However, after he took it over, there was apparently some back-and-forth and the Journal convinced Rupert to keep it behind a (somewhat porous) paywall. Of course, as many note, the WSJ is able to charge because of the reputation of its content (far above most other publications) and the fact that it's reporting financial info, where the direct value can be quite high to many readers.

Still, it was a bit of a surprise earlier this year when he started complaining about free content, saying:
"People reading news for free on the web, that's got to change."
And then he complained about Yahoo/Google "stealing" (he later changed it to "taking") content. Of course, that's not true. Both Yahoo and Google either link to content or have license deals. There is no "taking" of anything.

Either way, given those statements, perhaps it's no surprise at all that Murdoch is now planning to put paywalls across all his online news properties in the relatively near future. Apparently the plan will be based on the WSJ model, meaning that some stories were be available for free, but there will be severe limits. Given how many old school newspaper guys have talked about putting up a paywall, this isn't much of a surprise (though, it is still odd given his comments from two years ago).

That said, if newspapers are going to charge for online content, then let's see them go and charge. I think it will fail (miserably), but let's see him try to prove us wrong. Here's why I think it will fail:
  1. Those other sites don't have the qualities that make some people willing to pay for the WSJ. The quality isn't as good and the direct monetary benefit is not nearly as clear.
  2. Most of those other sites have much clearer (free) competition.
  3. Nowhere at all does Murdoch talk about actually giving people a reason to buy. All he's saying is that if they put up a paywall, people will pay. Sure, a few might, but it's a small number, and doing so will stagnate any sort of growth, piss off advertisers, and allow competitors to take a giant leap forward -- all in one shot.
But... if he wants to charge and thinks that these points are incorrect, we're eager to see how Murdoch gets around these issues. In the meantime, if you work for a publication that competes with a Murdoch news site, start revving up a marketing/promotional campaign about how you don't charge, and see how much market share you can build. Unless, of course, Rafat Ali is correct in his thinking, suggesting that this is all a big bluff to get others to put up a paywall. I don't believe it though... because if I'm a competitor the fact that Murdoch is going paywall, gives me even more reasons not to do so.

Filed Under: charging, fee, free, journalism, news, rupert murdoch
Companies: news corp.

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  1. identicon
    Free Capitalist, 6 Aug 2009 @ 7:47am

    Panic Waffles

    I agree Rupert might just bury his media orgs if they rush to paywall. Frankly the 'urgency' to convert to paywall sounds like knee-jerk management following on myopic 'cash today' concerns.

    If they want to believe people will just stop using aggregators to find news they find relevant or interesting, let them. Frankly I will never long for the days of monolithic media franchise being the only source for information. Even before news from many sources became broadly available over the Internet, I cancelled my newspaper subscriptions out of sheer boredom (ok I admit I did keep the WSJ for a few years).

    Times are indeed hard for many, not just the media. But rushing to obtuse, short-sighted business plans is a great way to alienate customers and create long-term antipathy in public opinion.

    Take some of the more cash-strapped, TARP infused banks. Pretty much all banks raised their credit card rates (not to mention adding outrageous fees without warning), but some took very long term, good standing accounts and raised their rates to DEFAULT levels (29%), or forced them to opt-out potentially harming their credit record. These greediest of banks might have trapped a lot of hard working people, and perhaps even bring some to financial ruin, but you can bet *everyone is doing everything they can to transfer balances and/or pay those cards off. Its the kind of move people will not forget for a very long time, and those who got shafted won't be coming back.

    Rupert's organiztions won't face the same intensity of backlash down the road that I anticipate will happen to some banks. Then again, if no one can see their news, who will care when they close-up shop.

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