Posts Tagged ‘rupert-murdoch’

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People WILL pay for online content, research finds

February 15, 2010

Dropping circulations

A new report from Nielsen (FT article – subscription required) suggests a third of people around the world (in 52 countries) would be happy to pay for online content.

While this will please many in the newspaper business (notably Rupert Murdoch, who is introducing paywalls for some of News Corporation’s papers this year), the research findings are not quite the equivalent of a reprieve for struggling newspapers.

The bottom line for newspapers is how much they can earn against their operating costs.  The margins once enjoyed by papers have been eaten up by plummeting circulations, reducing the revenues they generate from both sales and advertising.  This has been exacerbated by people moving online to read their news (and the associated loss of loyalty it is presumed this entails).

Online advertising just doesn’t generate revenues in the way it traditionally did offline, and even online advertising sales have been dropping (these Newspaper Association of America figures make depressing reading if you are in the newspaper industry, and highlight how newspapers online are competing with specialist sites like Craigslist or Gumtree for classified advertising).

So making people pay for newspaper content online is seen by many as the solution (notably not by Alan Rusbridger at The Guardian).  As readers of this blog know, I believe this is the solution.  Either way, the question that has yet to be answered is this: even if a third of people say they are happy to pay for online content, will the revenue this could potentially generate cover the costs of running a newspaper? 

It comes down to a balance between the price newspapers can charge, and the number of subscribers (or people paying micropayments for articles) they keep.

And we will find out whether a profitable balance can be struck later this year, first when News Corp erects its paywalls, and second, when the rest of the newspaper industry decides whether to follow suit.

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Harding calls ‘the trickery and fakery’ of circulation figures

November 18, 2009

James Harding, Editor of The Times

Finally someone has said it.

The editor of The Times, James Harding, yesterday stated that circulation is not the be-all-and-end-all of online newspapers. And he went on to outline a number of ways he can add value for loyal (and presumably, paying) customers.

“We think it’s good for us and good for business to stop encouraging the trickery and fakery of the ABCs. We want real sales to real customers – that’s what our advertisers want too.”

The Murdoch show – followed closely here – rumbles on.

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Murdoch: get off my land!

November 10, 2009
Rupert Murdoch

Picture courtesy of Michael Albov http://www.flickr.com/people/44653897@N00

So that’s how it’s going to be, then.  Rupert Murdoch today hinted that his decision to charge for online content will be enabled by building walls and closing access by legal action.  Not very new media.

The decision to charge for content on News Corporation’s media sites around the world (which include The Times and The Sun in the UK, Wall Street Journal via Dow Jones and The Australian) seemed like the first step in a sensible direction for online media.

Coming just a week after he admitted his online payment plans are behind schedule, Murdoch’s interview on Sky News Australia reveals he is prepared to take a very heavy-handed approach to ensuring he creates a watertight system for monetising his online media assets.

Is this worth it?  While there is rock-solid logic to the argument for charging for media content when there is a cost associated with its creation and distribution, it’s not clear that issuing threats to sue the BBC will genuinely help the media industry move towards a sensible settlement with its customers.

What’s holding back online media is a lack of micropayment standards to allow them to make money from their work.  The focus should be on the establishment of a standard that allows users to pay for what they use, without onerous barriers to entry (so a mix of prepay and post-billed options would make sense).

Even if this is merely the opening parry in what could turn out to be a prolonged negotiation through lawyers and the media, its disappointing that News Corporation’s reputation with anyone other than shareholders seems to have passed the old dog by on this occasion.

I’m not suggesting Murdoch should be operating on behalf of anyone other than his own shareholders… but could you imagine Google looking after its own interests in such a blunt and one-dimensional way?

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Murdoch gives the order to charge

August 7, 2009

Rupert Murdoch has done it.  As suggested at News International’s last quarterly earnings call, he says his online newspaper portfolio will begin migrating towards a paid-for model within the next financial year.

The response has been electric, with no media title able to ignore the story.  As previously acknowledged here, at No Free Lunch, Murdoch is one of the few media moguls large enough to foment industry-wide change towards charging for online newspaper content, though in this instance, he is clearly being ably supported by the Financial Times’ Lionel Barber.

Commentary has varied in tone, from outright skepticism such as Larry Dignan’s analysis at ZDNet to praise from Andrew Keen at the Daily Telegraph.

But could this work?

Murdoch is in a unique position in the media – where he goes, he stands a very real chance that others will follow.  What this means is, while the skeptics are right that charging people for content will drive his audience to rival online sources, they are also missing a key dynamic: if the others start charging too, there will be nowhere to go.

The problem for online newspapers since they began giving away their content free has been the fragmented system online – news just leaks.  But if all – or even just a proportion – of the online newspaper community moves as one, this could work to everyone’s advantage.  As Andrew Keen says:

The holy grail of the digital economy is discovering how to get consumers to spend money on content. Nobody has figured this out yet.

So from now on, watch this space for other newspaper groups to announce ‘trials’, and in the longer term, a raft of lawsuits issued in response to plagiarism.

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Bold step as New York Times charges for content

July 10, 2009

NYT BuildingGreat news that the New York Times is to start consider charging for content.  Somebody has to be the first to go, and after Murdoch’s recent revelation that he is considering this for The Times and The Sun in the UK, it sounds like a monumental shift is taking place.

The price mentioned by the NYT  is low.  At $5 per month to begin with, it is around ten pence per day in sterling terms.  Who could deny that is good value?  The big question is just how elastic demand for quality newspaper content will be.  In other words, how much will this price – albeit a very low one – negatively impact demand?

It sounds reasonable to argue the quality of reader will be superior under a payment model.  It will not include people landing on the page unintentionally, for example.  It will also likely drive up the readers’ “propensity to buy”, since it will be possible to be more targeted with ads (using reader information) and readers will be generally more affluent – all good stuff for advertisers.  This is an experiment well worth undertaking, and the economic knowledge gained might be so valuable as to outweigh the cost of being the first mover.  Let’s hope so.

One concern is with Journalism Online, the organisation that has established itself with the laudable aim of creating a single pay platform for all online newspapers.  This is a very powerful idea, but surely the best way to deliver it would be through a non-for-profit body owned collectively by the newspapers themselves, and perhaps representing also the interests of readers.

That said, until such a group is formed (happy to be corrected if this has already been done), Journalism Online is showing the way, and for that, they ought to be congratulated.