News Corp Will Charge For Newspaper Websites 453
suraj.sun writes "Rupert Murdoch says having free newspaper websites is a 'flawed' business model. Rupert Murdoch expects to start charging for access to News Corporation's newspaper websites within a year as he strives to fix a 'malfunctioning' business model. Encouraged by booming online subscription revenues at the Wall Street Journal, the billionaire media mogul last night said that papers were going through an 'epochal' debate over whether to charge. 'That it is possible to charge for content on the web is obvious from the Wall Street Journal's experience,' he said."
More Daily Show Fodder. (Score:2, Interesting)
Anyone who has been watching/reading news corp material and comparing it to on the ground reality or watching the daily show at the same time know murdoch and his henchmen are losing grip with reality and receding into delusion.
I look forward to him slowly losing his grip over news media by shutting out the majority of online readers.
Well It's a Long Painful Death For ... (Score:5, Interesting)
Also, Murdoch, please be sure to notify Google that you don't want their help [slashdot.org] in gaining readership. I would also like to hear how you explain MySpace's massive success ... you only host that for free because it's user created content? You can't afford a staff with the money these sites bring in?
Good luck, you're going to need it. I would claim a move that reduces readership in any way is a bold move by any news source.
Flawed comparison? (Score:5, Interesting)
The P0rn option... (Score:3, Interesting)
On the other hand, there are pay services for porn. Where quality and quantity is enough, a pay service is doable. Probably newspapers are near the quality and quantity needed to make it feasible. And with quantity, I mean how often you need the service. No one in the right mind will pay for a online encyclopedia, with the better one free. But for daily news, and porn, maybe.
Choice is key (Score:4, Interesting)
Re:Another smart move from the movers and shakers. (Score:5, Interesting)
What does Murdoch know about making money, anyway?
I don't know. But I know this: it sets off alarm bells ringing when somebody claims that a business model which has been evolving for nearly two decades is 'malfunctioning' just because it's not working in precisely the way in which they personally want it to work.
Believing that the universe revolves around you may be a useful trait for someone determined to push their agenda onto the world, and make money whilst doing so. But I don't think for a second that makes those people right - just powerful.
Re:The P0rn option... (Score:4, Interesting)
I was thinking exactly this as well.
For the consumer that only wants a sixty second clip, there exists a free option.
For the consumer who wants more content, there exists a place to input the credit card number.
Newspapers could well do the same. Blurb is free, full story (and access to the discussion) requires subscription.
Give me a PDF, iphone app, etc. (Score:5, Interesting)
I'm totally fine paying for an electronic paper. For many sitting down at the breakfast table with your paper, reading it on the train, or having it next to the toilet is great. I'm going to miss some of the things the physical paper can bring.
I like to linking to stories and all, but sometimes I want the real deal and even with 3G I'd still like a properly formated thing without stupid flash ads off to the side. A decent app for my cell phone or something like the kindle would be great.
I'd be happy to pay 5 bucks a month for the a paper in some electronic form. And yes it'll be pirated to all hell, but even though a lot on here won't believe me...some people actually like to pay for things...the whole keeping the system moving forward....some of us did grow up after all.
Re:Another smart move from the movers and shakers. (Score:5, Interesting)
The question is what the Wall Street Journal provides that people are paying for. Mr. Murdoch seems to think that people are paying for access to the general newspaper sections that are shared with other papers - global news, national news, op-eds. I strongly suspect that he is wrong, that subscribers are paying primarily for the financial news. If I am right, then this model cannot be easily expanded to other newspapers.
Re:The P0rn option... (Score:4, Interesting)
Yes. And even a $.99/month option would probably net more income than ad revenue alone would...
Re:The WSJ is unique and non-substitutable. (Score:1, Interesting)
The WSJ is very much replaceable. I stopped my subscription a few months after the paper was acquired by ole Rupert. It was that bad. More politics, less financial, and more sensationalism.
I'm quite happy with my pick of FT (a superior paper). As they report news rather than spin it.
Thomson/Reuters and Bloomberg also make fine substitutes.
Competition is not always good. (Score:5, Interesting)
Today, a citizen of Boston can use the Internet to read news from a variety of sources: "New York Times", "The Washington Post", "San Francisco Chronicle", etc. He is not forced to buy only today's editon of the "Boston Globe".
Just as any standard economics textbook states, if you destroy the monopoly by introducing competiton, monopoly profits also disappear. So, the "Boston Globe" is bleeding money.
Yet, is this competiton good? Maybe not.
Monopoly profits enable a newspaper to fund long-term investigations for stories that benefit society. For example, Bob Woodward and Carl Berstein spent months in investigating the "Watergate" scandal. That investigation cost money.
In much the same way, the monopoly profts of the old AT&T, a telephone monopoly, funded breakthrough research at Bell Laboratories. It gave us the transistor.
A research environment -- for either newspaper-investigative research or scientific research -- is ideal for allowing dedicated individuals the freedom to pursue their interests for the betterment of humankind. Competition -- with its profit-reducing mechanisms -- precludes such an environment.
What can we do? There are 3 options.
1. Go with a Public-Broadcasting Service model. Turn the newspapers into non-profit organizations that hold pledge drives to raise money. The government provides matching funds. The government, essentially acts, as the sugar mama. There is 1 potential problem. The government might try to control the news. If the investigative reports by a government-funded "Washington Post" reveal terrible things about a liberal politician, will a liberal-party-dominated government try to reduce funding to the "Washington Post"?
2. Go with an endowment model. A rich philanthropist sets up a non-profit newspaper funded by the interest of a billion-dollar endowment. The salaries of the entire staff is paid by that endowment. In this model, the newspaper is free of external meddling.
3. Go with a public-service model in which a major non-profit organization (e. g., a university or a church) maintains a newspaper division. The best example of this model is the Christian Science Monitor.
I think that choice #2 is best.
Regardless of which model is best, we must continue to have newspapers in our society. Newspapers are the bulk of the 4th branch of government. They are our eyes and ears in keeping us informed about our government. An uninformed electorate is the first step toward creating an authoritarian society.
Re:Another smart move from the movers and shakers. (Score:5, Interesting)
Some of the same things can be said of the New York Times. And if you've read the WSJ lately, it has been diluted with entertainment news, sports news(this is not to denigrate sports, just to show that the WSJ is becoming just like other papers), and all the other things that make it par for the course for a Murdoch publication.
No, something else besides level of technicality needs to explain why people are willing to pay for the WSJ.
Here's a possibility: as another reader pointed out, you are allowed to access WSJ's premium content if you have been referred from another site. So what you are really paying for is the indexing of content at the WSJ site, and the ability to read the content which you can otherwise get for free the same way you would read a newspaper.
Great... (Score:2, Interesting)
Now we'll all start pirating our news because they'll probably set the price too high, then they'll blame the pirates (or anyone but themselves) for their new business model failing, and insist the News Printers Association of America be instated to protect them. And by protect, I mean bash down doors, arrest innocents, and harass the population as a whole, all to protect their profit margin.
And only the lawyers will really benefit from it all.
Re:the sad thing is (Score:4, Interesting)
Re:Another smart move from the movers and shakers. (Score:4, Interesting)
The Journal doesn't report the same news that every other paper does, and it doesn't just rely on AP and Reuters feeds to do the work for them, it actually offers things that are nearly unique in the news industry. That, and only that, is why they can get away with a pay wall.
Considering that the business model for free online newspapers is unsustainable, and paper news is dying out, that implies that eventually all newspapers will be behind a pay wall. If, as you say, the only way for a news paper to thrive behind a pay wall is to offer very high quality unique content, that would imply that in the future all newspapers will offer high quality unique content. That sounds pretty nice.
tax (Score:2, Interesting)
I think that most folks who subscribe to the WSJ also deduct it as a business expense. A lot of other periodicals it might be sorta iffy if that would fly with the tax man.
Re:Another smart move from the movers and shakers. (Score:4, Interesting)
When was the last time you bought a pot? I bought one 3 years ago for a plant (that is now nearly dead). I suspect that that pot was made in a factory as well.
You don't hear people crying about the dying pottery business. Business models change. Society evolves. There will always be a need for news. Maybe news will be reported by those that were there. Maybe news will be paid for by TV networks using revenue from advertisements. Maybe even news services could be covered by your property tax. The current news model is evolving, newspapers appear like they are on thier way out. Maybe the town crier is posed for a comeback.
Re:the sad thing is (Score:5, Interesting)
Which is why this is a great move. Not for Murdoch or News Corps employees of course, but for all of the free news web sites out there. News Corp is removing its self from the gene pool and will drive traffic to the sites that 'get it'. And with increased traffic comes ad revenue, commenters ^H unpaid content providers, and with more revenue and more content they can offer a better product.
Owning a newspaper has always been about the vanity of owning a newspaper, they've never made money.
Re:the sad thing is (Score:3, Interesting)
The airlines do this all the time, where one carrier raises prices, then maybe one or two follow to see if it can stick.
Murdoch won't be permitted to make it stick. The actual value of his journalistic endeavors is pretty poor-- especially in the post financial crisis meltdown. Add in the dubious qualities of Fox Network, and the only possibility he has is to take other Fox media and put it onto Hulu and hope.
Murdoch lives in fantasyland, along with a lot of other old media publishers.
Re:the sad thing is (Score:3, Interesting)
Re:Competition is not always good. (Score:3, Interesting)
You forgot option 4), the cable TV model: instead of each newspaper trying to pay, a group of sites get together under some banner. Let's call it WumpusPay. If you have a subscription to Wumpus pay, you get past the gate at every site that is part of WumpusPay. This significantly reduces the exclusion that happens to sites that put up a pay barrier since you probably already have access, and you get a lot for you money.
Then, the members of WumpusPay distribute the revenues based on which newspapers are being read, which, if people have to log in to read, is pretty easy to do.
Re:the sad thing is (Score:5, Interesting)
Which is why this is a great move. Not for Murdoch or News Corps employees of course, but for all of the free news web sites out there. News Corp is removing its self from the gene pool and will drive traffic to the sites that 'get it'. And with increased traffic comes ad revenue, commenters ^H unpaid content providers, and with more revenue and more content they can offer a better product.
And what are you going to do when we're all charging for access? That time is coming and a lot sooner than you'll like. Online advertising revenues aren't going to carry the water by themselves. At some point, you're going to either pay up or do without.
Owning a newspaper has always been about the vanity of owning a newspaper, they've never made money.
Absolutely false. Newspapers' profit margins have traditionally run upwards of 15 percent (by comparison, ExxonMobil (XOM) [yahoo.com] has a profit margin of just under 10 percent). The reason newspaper publishers are whining now is because they're no longer making money at rates that make the Mafia envious and are desperate to preserve a profit margin that's possible in no other industry. Until a few years ago, print advertising paid revenue like no other source, to the point that newspaper executives (who, almost without exception, are not from the reporting side of the industry [/bitter]) flat-out refused to consider spending money on trying to figure out how to come up with some sort of business model for online content delivery. Newspapers are still profitable; the bean-counters' problem is that newspapers aren't as profitable as they used to be and the bean-counters haven't come to terms with that fact yet.
I can't begin to count how many meetings I had to endure where business-types implored us reporter types to figure out how to attract younger readers to the traditional printed newspaper. They really didn't want to hear me tell them that younger readers have grown up with the Internet, greatly preferred online news delivery and really didn't care about a product that was at least six hours old by the time they got it. I rather suspect --- but can't prove --- that my bluntness on that topic made me part of the class of laid-off-and-bought-out journalists back in 2005, when it was still a bit of a rarity compared to now [graphicdesignr.net].
Re:the sad thing is (Score:3, Interesting)
At the moment, I get my mainstream media news from timesonline, telegraph, guardian and news.bbc.co.uk. BBC is the most popular site in the country, and I believe the Telegraph is the second most popular.
I expect most timesonline readers are people who like me also read other newspaper sites. If Murdoch starts charging for it, they will just continue to read the other sites and not bother reading the Times.
Re:the sad thing is (Score:2, Interesting)
For all intents and purposes, newspapers have been getting paid by advertising for years. I doubt the $0.50 I have to put in the box for daily newspaper covers the cost of the trees they have to cut down. Why can't the online advertising model work as well?
Because the newer generations are not like the previous generations. We do not blindly trust the words of an advertisement. We have a huge amount of information at our finger tips and can discover many points of view in seconds. We do not put all our trust in the editors and publishers of media to deliver our news and tell us what to buy.
In short, the power of the media to influence people is less than it was 20 years ago. Advertisers have realized this and are paying less for it.
Re:the sad thing is (Score:4, Interesting)
And what are you going to do when we're all charging for access?
I'll probably ride my unicorn up over the rainbow into the clouds, because that will never happen.
The fact of the matter is that (porn excepted) people don't pay for online content. Period. If that means we only get "amateur" news reporting, then that's what it will mean.
Show me one successful online news source that pays for a large investigative staff off of walled-off subscription content. One.
I know my local paper [tulsaworld.com] tried allowing online access only to subscribers (print subscription worked). It failed. There are just too many other places to get free news (even if its inferior). They eventually had to make everything free to try to generate some kind of revenue off of it. Salon [salon.com] tried the same thing when their VC money initially ran out. They hemoraged readership. Within a few weeks they felt the need to provide public access again with annoyance ads that you could buy away. Eventually those were gone too.
Perhaps Mr. Murdoch thinks he has some grand business theory that nobody on the web has ever thought of before to make pay content work. But unless porn is involved, he's wrong.
I don't have a crystal ball, but my guess for where we are all headed is a web full of independent investivate reporters with their own websites. Here's a local example [gossip-boy.com]