Rupert Murdoch’s “Paid Content” Gamble

Rupert MurdochMedia mogul Rupert Murdoch’s pronouncement last week that beginning in July 2010, online content for all of his news media properties will be available for a fee – not for free – has surprised many in the industry.

“Quality journalism is not cheap,” Murdoch declared. His announcement comes hard on the heels of his massive media conglomerate News Corporation reporting a ~$3.4 billion loss for the last fiscal year.

While admiring Mr. Murdoch’s brave stance and willingness to get out in front of an issue that has bedeviled the newspaper industry for the past four or five years, one is left wondering if he’s playing the role of Don Quixote rather than Richard the Lionheart in this drama.

For sure, the pay-per-view business model looks great to any publishing company that has seen the advertising-driven business model come under so much stress and strain in recent years. And The Wall Street Journal, one of Murdoch’s properties, has been able to charge a fee for online access in a practice that dates back prior to that publication’s acquisition by News Corporation.

So what will happen in this glorious experiment? Will legions of newshounds flock to the various Murdoch sites – The Wall Street Journal, Times of London, Australian, New York Post – and plunk down pay-per-view dollars or a monthly access fee for the privilege of reading the latest news bits?

Or will people rely on the many other (free) outlets for news, while also receiving and passing along “copy-and-paste” materials over the web — an effortless task that can be completed in mere seconds?

[And good luck trying to use legal means to prevent the dissemination of copyrighted material; the litigation costs could well outstrip any compensation dollars awarded, while being a major distraction inside the company and causing a PR kerfuffle outside.]

That giant sucking sound you hear could be the hordes of cyber-visitors heading on over to CNN, USA Today and other free news sites, whose traffic volume will spike and perhaps even bring in additional advertising revenues off the extra hits. Would these and other free, advertising-driven media properties like to find ways to increase revenues? Sure. But most of them would prefer to be #3 or #4 to take the leap on paid content – not a high-risk first or second.

There will always be some people willing to pay for premium content. But let’s face it; most news isn’t “premium.” It’s a commodity – and its dissemination is helped along by hundreds or thousands of people copying and forwarding articles and and/or links via e-mail, Twitter, LinkedIn, Facebook … you name it.

Rupert Murdoch has a history of being pretty savvy when it comes to the news business. And certainly he has the power and the resources to undertake this new effort.

But his naiveté may be showing on this one. He is, after all, nearly 80 years old and notoriously online-illiterate himself. And while the saying goes that “knowledge is power” … “power without knowledge” isn’t usually a good recipe for success.

3 thoughts on “Rupert Murdoch’s “Paid Content” Gamble

  1. Hey Phil, totally agree. Paid content only works if you provide very unique content that is not available anywhere else. The same goes for micro payments, where Apple (iTunes) has been quite successful. Many publishers are struggling with this one, especially those that produce only news. News is a commodity indeed.

  2. Phil—I agree. The move seems awfully dangerous, in part because it’s unilateral. It seems to me Mr Murdoch has to ask himself what the NYT is likely to do. And the FT. And other well-regarded news sources. As it stands now, those stand to benefit by a sizable uptick in readership if News Corp goes it alone. Of course, Mr. Murdoch is correct when he says that quality journalism is not cheap. But that doesn’t necessarily mean that people will pay for it, particularly if they have another source (or sources). Too, you’re right when you say people will copy and forward. Printed content is just like audio content—easy to share.

    The reality is that the paradigm has changed. And now there are always going to be people who will offer content for little or nothing. The question becomes not what content is worth, but what QUALITY content is worth and how to protect it when it’s there for pirates to steal.

    So are advertising-based business models the only answer? I don’t know. I do know this: at this juncture, my experience is that online impressions (with perhaps some exceptions) ain’t worth a fraction of what traditional media impressions are worth. I have made good money consistently in the printed NYT, but I’ve NEVER found a way to make money on NYT.com. Not even close.

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