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. icon
    BobinBaltimore (profile), 6 Aug 2009 @ 2:08pm

    Rupert the Fool?

    So a few comments on various items above:

    1. I agree with Mike (shocker) that having a paywall requires a hook...something that creates value and imperative to get people to pay. WSJ and some other national newspapers probably have that, if done well. Most don't. That's a problem for this approach, definitely.

    2. If done thoughtfully, paywalls do not have to be anti-search engine. Exposing enough teaser text and media with proper SEO can do the trick.

    3. Despite all the Fox and FoxNews references above, I have seen no mention, even in his competitor sites (like The Guardian) of any intention to paywall any sites other than his newspapers.

    4. Note that for all your News Corp-In-Freefall thinkers, News Corp's major divisions are still quite profitable (see: http://www.guardian.co.uk/media/2009/aug/06/rupert-murdoch-website-charges), just not as profitable as they were a year ago. But there are very few businesses that haven't fallen substantially year-over-year, and many that see less than zero net. News Corp is not in a bad position relative to its competitors.

    5. I do find is humorous and a bit disappointing how readily even thoughtful people here and elsewhere seem to dismiss Murdoch as a floundering fool, someone who doesn't understand his business, his markets or the complexities of consumer relations. Murdoch - and his team - is a leading multimedia visionary, one of the tops in the last 50 years. He has both lead markets and created new opportunities out of whole cloth where non existed previously. I don't think he has all this figured out yet, but to intimate he has suddenly become blind to the changing ways of markets and to the desires of his consumers is folly. After all, hasn't he been accused relentlessly for 30 years of doing not much more than pandering to what the market wants...the lowest common denominator and such? I say that if any major media outfit is going to figure out the right mix to stay in business at a large scale and give the market want it wants, News Corp is probably it.

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