Big and bold Murdoch takes the paid content gamble

Huge sigh of relief has been breathed around the world this morning by newspaper executives everywhere who were all waiting for someone to make the first move and charge for content. Rupert Murdoch has never been a patient man.

Murdoch has made the first move, taken the gamble and the turnpike towards paid content. What is so astounding about today’s news is that he is not testing the waters, not finding little pockets of content to charge for, no. He says he is going to charge for news.

More to the point he says he is going to charge for the content that everyone else says you can’t charge for. This is game changing and huge…either that or it’s a Titanic-sized disaster waiting to happen.

Potentially this means people in the UK will have to pay to get access to The Sun, The Times, The Sunday Times (interesting timing with its new standalone website on the way) as well as Sky News. Not to mention all those other properties he owns around the world from The Australian to Fox News.

Murdoch is not simply talking about his newspaper properties online as he clearly realised that if you are going to charge for one type of online news (say The Times) then you can’t very well give away the very good Sky News for nothing. That makes no sense.

Over the past few months Murdoch has been mulling options with his executives. They have been looking at the great success that is the Wall Street Journal and clearly have drawn answers from that. Drawn answers from the WSJ’s one million subscribers.

Maybe it told them that it’s a big number, but more important it is a big number with implications for other big numbers: ie the numbers of users visiting its digital properties around the world.

As that sat around those tables, phrases such as subscription charges, premium content areas, e-readers and e-wallets (I’m sure there are other “e’s”), and micro payments were all bandied around.

In the end, having seen these options, Murdoch and his team have opted not to trial; not to fiddle while Rome burns; but to move forward on all fronts and charge for it all. Maybe Murdoch was looking at other people writing on the wall and he didn’t what he was seeing (Goolge aggregation; Amazon Kindle) as it was all slowly chipping away at his business and the only future that promised was death by a thousand cuts.

It is easy (or easier) to see people paying for upmarket quality journalism. It is here that the Wall Street Journal model gives help hints. So from that maybe people will pay for Times Online and the the new Sunday Times website. I can see people making that case (it is still I think a tough sell), but looking at the popular journalism end of Murdoch’s empire (The Sun/News of the World and New York Post) then I would love to hear that case convincingly made as I really can not see it. How Murdoch’s freesheet Thelondonpaper fits into all of this is anyone’s guess. I mean that is the definition of free.

Whatever the pitfalls that News Corp faces it is a bold move. No one knows what will happen when the paid content switch is flicked. Murdoch’s rivals have all made noises. Le Figaro yesterday said it would charge. The Financial Times says it wants more people to pay. The New York Times has said it is “trying to work out how many of its readers would be willing to pay for online content and how much they would pay”.

Guardian News & Media is hoping the New York Times will charge… so that it can charge. Right at the start of this year New York tabloid News Day said it would charge online. Looks like it will be joined by the New York Post.

When this happens there could be a massive drop off in user numbers. Gone will be the 21m unique users Times online has and the 25m uniques that The Sun has. Murdoch could fall flat on his face and people will desert his sites in favour of the BBC and to other sites that are still free, but commercial rivals know that time is getting shorter by the day and if this venture shows any signs of success they will have to act.

News groups of all shapes and sizes need significantly more online revenues. Maybe this will be the start of something.

 

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  • Kevin Gordon

    Nobody can own “The News”
    “The News” is “The News”
    They can only charge for reporting it.
    The quality of reportng is priced according to two criteria:

    1 Quality of journalism.

    2 Popularity of a Brand.

    If you’ve got both then you’re laughing.
    If you’ve got neither you’re peniless.

    This is where my idea of a Press Oystercard would help
    THE INDUSTRY AS A WHOLE.

  • Gordon Macmillan

    The news oyster card idea is interesting i can see iTunes or Spotify broadening their service or something similar to cover content.

  • http://www.yomego.com Joe Hughes

    Has Murdoch missed the Elephant in the room with all of this namely the BBC. Why would people pay for news when they can get it form the BBC for free? If I want to read analysis I might read something like the times but I am equally likely to read blogs by expert on that subject.

    In terms of something like Skynews will the channel still be free on platforms like Virgin media whilst at the same time the website costs money to SKY/Virgin subscribers? doesn’t make much sense. In essence News corp will have to undo some very complex content arrangements between different parts of its media empire. How does Myspace fit into this paid for internet future?

    The problem is not one of Content it is one of distribution. News papers for a long time where the most useful means of distribution for news and their websites equally so. They aren’t any more. I talked about this very subject a couple of weeks ago on my Brand Republic blog. http://community.brandrepublic.com/blogs/joehughes/archive/2009/07/22/online-subscriptions-the-beginning-of-the-end.aspx

  • Stuart Kilroy

    come on – who in their right mind will pay for news content when you can get it for free? The reason people are not buying newspapers anymore is because the internet offers a better more accesible service for free!

    The BBC and other websites, plus other consumption channels (TV, radio, etc) will still offer news content for free, so why would you go elsewhere to pay for it?

    For me it smacks of desparation as the news companies are too inept to make their business models work. Sort out your websites and make money through advertising! job done.

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