Murdoch: I Will Start Charging for All Online News
News Corp. Chairman Rupert Murdoch, whose company owns the Fox broadcasting channel, Fox News, 20th Century Fox movie studios, the Wall Street Journal and several other media properties, said on an analyst call yesterday that he will start charging for news on all of his online sites.
"Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting," Murdoch said on the call.
This is a big, big deal. News sites -- such as the New York Times, The Washington Post, ABC News online, you name it -- either started life as or moved to a largely free, ad-supported model years ago, following the thinking that most consumers believe that online content should be free.
Further, the news sites were afraid that if one started charging, consumers would just leave and go to a free site.
But there was always a problem with this: Advertisers are not willing to pay as much to put an ad on a news site as they are to put an ad in the newspaper. This has always been puzzling, because advertisers know a lot more about how their online ads work -- how many people have seen that ad, how many clicked on it, where they live, how old they are and so on.
Also, online aggregators -- such as Google News and Yahoo News -- compile news reports from news and media companies, further hurting the revenue of the news sites.
Because of this, online advertisers have been unable to raise the amount they charge for online ads and can only try to get more money by increasing traffic. As NBC Universal chief executive Jeff Zucker famously said a couple of years ago, media companies have been "trading analog dollars for digital dimes."
Then, the recession hit and the bottom really dropped out of the online ad market. Maybe Murdoch thinks he has no choice but to start charging. His company swung to a loss in its quarterly earnings reported yesterday.
The Wall Street Journal, even prior to Murdoch's takeover, has been a rare success at charging for online content, largely because it produces specialty content. After Murdoch took over, he took down much of the pay wall, making more Journal content free, but not all.
There has been at least one notable failure of an established media company attempting to erect a pay wall around its content. The New York Times put its opinion content behind a pay wall -- called Times Select -- in 2005. Two years later, with the Times's columnists essentially isolated from the ongoing debate, the Times dropped the wall and made the columns free again.
The Journal's online news site has been a success. It makes money. We'll see if Murdoch can sprinkle some of that mojo to his other news sites -- which include the New York Post, the Times of London and so on.
The media world will, once again, be watching the crusty, contrarian Aussie media lord.
August 6, 2009; 11:55 AM ET
Categories: The Ticker | Tags: New York Times, News Corp., Rupert Murdoch, Washington Post
Save & Share: Previous: Study: Stimulus Not Yet Helping Unemployed, Poor
Next: Hacker Attack Shuts Down Twitter
Posted by: dmitchell3 | August 7, 2009 1:10 PM | Report abuse
The comments to this entry are closed.