Murdoch leads charge to get readers to pay online

May 09, 2009 by Chris Lefkow
As US newspapers shrivel up and die, an unlikely figure is emerging as their potential savior: News Corp. chairman Rupert Murdoc, seen here in April 2009. The much-villified Australian-born media tycoon is preparing to battle against the practice many hold largely responsible for newspapers' current plight -- the "original sin" of giving away their content for free online.

As US newspapers shrivel up and die, an unlikely figure is emerging as their potential savior: News Corp. chairman Rupert Murdoch.

The much-villified Australian-born media tycoon is preparing to battle against the practice many hold largely responsible for newspapers' current plight -- the "original sin" of giving away their content for free online.

The 78-year-old Murdoch announced this week that the days of free are over.

He said he planned to begin charging readers of the websites of News Corp. newspapers "within the next 12 months," testing the scheme "first on some of our stronger ones.

"We are now in the midst of an epochal debate over the value of content, and it is clear to many newspapers the current model is malfunctioning," said Murdoch, whose holdings include The Wall Street Journal, the New York Post, The Times of London, the Sun and The Australian, among others.

The online already requires a subscription fee but newspaper owners across the United States will be closely watching as Murdoch bucks the conventional wisdom and extends a pay wall to other publications.

Murdoch himself is a late convert to the notion of making readers pay online, having planned before buying the Journal two years ago to do away with the system in a bid to increase traffic to wsj.com.

He changed his mind after taking over the paper, but it is precisely that kind of flexibility that some analysts point to when they say Murdoch may be the media magnate best equipped to lead newspapers into the digital age.

"The track record shows that is nothing if not bold," said Rick Edmonds, a media business analyst at the Poynter Institute, a non-profit journalism school based in Florida. "I don't think it's entirely surprising for him to be leading the way."

Frequently accused in the past of promoting tabloid journalism, Murdoch is "sometimes villified for the wrong reasons," according to Edmonds. "There's quite a degree of respect for him as an operator."

"Whatever you say about Murdoch, the guy's a savvy businessman," said Ryan Chittum, a business writer at the Columbia Journalism Review. "He knows a failed business model when he sees one.

"The free model has failed," said Chittum, who worked as a reporter at the Journal and left around the time . took over.

"The ad revenue's not there online and it's not going to be there," he said. "To have the scale to produce their current levels of journalism, newspapers are going to have to find other revenue sources."

Struggling US newspaper publishers would not dispute Murdoch's assessment that the current system is "malfunctioning" and that online advertising is not generating the revenue needed to support their current newsrooms.

But few have been willing to start charging readers online out of fears of losing traffic to their websites.

With Murdoch taking the lead and print advertising revenue evaporating at a dizzying pace, analysts said more newspapers may be ready to take the plunge.

"There's definitely momentum among newspapers in the area of charging online, especially as the financial situation continues to deteriorate," said Zachary Seward, assistant editor at Harvard University's Nieman Journalism Lab. "Whether it's a good business decision remains to be seen."

"It's risky," agreed Poynter's Edmonds. "But on the other hand, there's a lot of debate and a lot of sentiment within the industry that maybe they took the wrong fork in the road a few years ago."

Edmonds noted that a number of US newspapers, including The New York Times with its failed "Times Select" payment scheme, had experimented with charging readers.

"The proposition of putting the New York Post or The Times of London behind a pay wall -- it's not immediately clear to me why that would go over better with readers than pay online attempts in the past," Edmonds said.

"Quite a few United States papers experimented with that at least for a while and typically found their traffic fell through the floor and therefore weren't getting much ad revenue.

"The , a lot of people say, is a special case because of the relevance of that information to people's businesses," he added. "It makes them a lot more willing to pay."

Chittum said there may be risks but the US newspaper industry no longer has the luxury of sitting back, waiting and watching what happens with the Murdoch papers.

"They can't dither and talk and think-tank anymore," he said. "A lot of these papers are going to go broke if they don't do something soon."

(c) 2009 AFP

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User comments : 20

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LWM
not rated yet May 09, 2009
Hmm...if there are free options out there, I'll probably stick with free. I think overall they are being a bit greedy on this because they get money for the advertising content. The 'free' model of the internet will not die from suppliers, it will die from ISP charging per MB.
Bob_B
not rated yet May 09, 2009
Rupert Murdoch is a greedy person who is not interested in news, but he is interested in profits.

Every news organization he has touched has lost "news" from its programming and moved into a "shock and awe" concept of "news."

Americans are less and less likly to know what is going on in America. Americans are now so much better at "knee-jerk" type of "news" where an opinion substitutes for "news."

When Rupert Murdoch, et al, are recycled into chemical parts perhaps Americans can begin to understand the concept of news once again.
noosfractal
not rated yet May 09, 2009
R.I.P. newsprint. You will not be missed.
NeptuneAD
not rated yet May 09, 2009
If they insist on charging for the news then it will fail like it did last time, come on Murdoch you are meant to learn from past mistakes not repeat them, advertising is a much better way of revenue gathering than charging for the news, because it actually works.
Ivan2
not rated yet May 09, 2009
"Whatever you say about Murdoch, the guy's a savvy businessman"



!!!!!!!



Isn't every far-right lunatic? They are perfect businessmen! They have perfect lips and know when and what to kiss, that is all that matters, isn't it?



In fact they are such "savvy" businessmen that not even a single left-wing newpaper "magnate" exists in the whole planet...
jcrow
1 / 5 (1) May 09, 2009
Rupert Murdoch is the biggest POS on the planet. If you have lots of cash you get to dictate reality. I hope that worthless POS dies soon. He has destroyed the radio and the credibility of his news stations. He is damaging America with his nutbag agenda.
earls
not rated yet May 10, 2009
Rupert Murdoch should try being not so damn old.

Yesterday's Business Practices plus Yesterday's Offline Market Generation plus The New Millennium = A simple equation that is not going to add up positive.
GrammarKnight
not rated yet May 10, 2009
I skipped this article because I knew the comments would be hilarious. Senility and neurosis are a great comedic combo. Thank Physorg commentors!
docknowledge
not rated yet May 10, 2009
Ha, ha, GrammarKnight, I did the same!

I realize I'm a minority in the big consumer ocean, but I don't mind paying online for services. What I mind is that a year or two from now my private information may sold for 10 cents by organized crime to Madison Avenue ad agencies.

Heck, at Excite@Home our customer service agents were telling people their personal information and passwords were secure...when they could see the passwords in plain text on their screens. And the Marketing Department? Shoot, no one told them they couldn't sell customer information. So they did.

It's my privacy I'm worried about, not paying 2 cents to read an article!

P.S. GrammarKnight: Do we really need the articles at all?
Spinoza
not rated yet May 10, 2009
People, people, let him do it, it's not like anyone who would normally get their news from Fox can read anyway.

And in any case, how hard would it be for a couple of bloggers (or other related pirate related enterprises) to copy and paste the articles out.

Someone must've forgotten to show Rupert how to press CTRL C and CTRL V.
tonyo
not rated yet May 10, 2009
I didn't read the dirty digger's rubbish when it was free and I sure won't be paying for it
vlam67
not rated yet May 10, 2009
Who cares?
There is no such thing as news these days. You can have a thumbnail of what's going on by these guidelines:

*Middle East:- Palestinians are still suffering from Israelis occupation, Hamas firing rocket occasionally, Israel threaten Iran and pressure the world community over alledged Iran nuclear ambitions, Arabs are protesting it vocally but have no wish to get involved, suicide bombs are going off in Irag, Pakistan, Afghanistan, etc..like the news on month and years ago.

*Africa:- Still a primitive jungle with many "governments" run by tribal attitudes and method ala 100BC. Some honestly do without these pretenses at all!. Dafur still is a killing field, capitalists the world over cried their croc tears and move on, as there is no oil, nothing sh*t there to get involved.etc..like the news on month and years ago.

*Europe:- Still struggling to get the EU to work, concern with radicalization of Islamist extremists, trying to lead the world in greenhouse production,..etc..like the news on month and years ago.

*Asia: Chinese are still making cheap goods for everybody else on the planet,although they don't sell as much these days. Tibetans still protesting over Chinese occupation, and everybody else on the Pacific rim are protesting and keeping an eye out for the Chinese who declare (mosty)the whole sea are theirs. Occasional avian flu cases here and there, hundreds died in coal mines, traffic/transportation accidents every month, Japan still hate Chinese guts, and North Korea still give the finger to everyone else except the Chinese..etc..like the news on months and years ago.

*United States:- Still staggering from the mistakes of financial troubles, wondering how to pay for debts money borrowed from China, so to be able to borrow more, to buy Chinese goods, so that the Chinese can make money, to produce more goods, and can lend more to them, to buy more Chinese goods...does that make sense to you? NASA is till in a tunnel with no lights, and over budgeting is par for the course, and the lay public have no idea whether they should be the tech leaders of the world or get back to Bible thumbing,etc..like the news on month and years ago.

As for the rest of the world...you get the idea...news like the news on month and years ago.
Ivan2
not rated yet May 10, 2009
I didn't read the dirty digger's rubbish when it was free and I sure won't be paying for it

That is the scam about buying both the NYTimes and WSJ. He is trying to save his own right-wing lunacy under a "respectable" mask.
rwinners
not rated yet May 10, 2009
I'll never buy any news content from Her Rupert. He's almost as bad as FOX, in his own way.
vika_Tae
not rated yet May 10, 2009
All it will take is for one savvy entrepreneur to subscribe to a half dozen of these papers, read the news, rewrite the interesting stories in his or her own words, and post them to an advertising supported site.

Their advertising rates will skyrocket, and it'll be a source of free news that will continually force the paid walled gardens out of business.
EricMS00
not rated yet May 10, 2009
No newspaper is too big to fail, especially not yours Rupert. Die WSJ, die! Die New York Post die! You made your bed, now sleep in it scumbag!
Raffy2
not rated yet May 11, 2009
I always believe the maxim that drives success in the internet: it's gotta be FAST, FREE and FOREVER. No one owns the internet, not even Rupert's Billions; so, we'll see who prevails -- the web community wanting fast, free and forever or Rupert.
wiyosaya
not rated yet May 11, 2009
Murdoch is trying something that has been tried by other outlets like CNN. CNN moved away from charging, I expect because no one would pay. From this standpoint, this matches Einstein's definition of insanity.

Good luck to him, but I think the consumer may be about to teach him a lesson.
JeanPierreSarti
5 / 5 (1) May 11, 2009
The problem with guys like Murdoch is that he probably has never read an email much less surfed the web for information. He gets his old-fashioned paper WSJ and FT ironed by his butler everyday and stokes his ego by counting the number of times his name shows up.

He should stick to creating one-sided news organizations that print money and leave real journalism to people with a little more integrity. If there are any left in the world.
jeffsaunders
not rated yet May 17, 2009
Rupert is saying that add revenue from internet readers does not pay enough for declining sales. Oh well that is probably because there is a lit more competition on the internet.

Many cases newspapers are delivered for free and you pay for them at the news agency to cover a handling cost. On the internet the actual delivery cost is a lot less than the delivery cost of a newspaper so the newspaper magnates are competing with much smaller operations on a more level playing field.

The upshot of all this is that yes even if he does charge for content there will be plenty of others that don't and after some fallout takes place there will be less operaters in the market place (read on the internet) and most people will still be reading news for free.

What does it all mean? it means that many of the above contributors are correct, most news will be read for free off the internet and those that charge will get smaller and smaller market share until they cease to exist.

unless of course Murdoch and the like can get some sort of license franchise from the government and crush the opposition through regulation and licensing fees. This is what the American racing and gambling organisations have managed to do - not sure if it is possible with the news but where there is a will there is also a way.