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Murdoch: Future of newspapers in online payment, feds should stand back

Media titan Rupert Murdoch believes the government should stay out of the way of the news industry as scores of newspapers around the nation shutter or slash staff.

Instead, the federal government needs to update arcane regulations such as a media cross-ownership ban that appies to a pre-digital era, he said. And news organizations need to keep aggregators such as Google from disseminating news for free on the backs of newspapers such as the Wall Street Journal, he said.

Those were some of the opinions voiced by Murdoch this morning at a workshop on the future of newspapers by the Federal Trade Commission. Murdoch’s controversial views have set off debates on the future of online news distribution and how newspapers, broadcasters and radio stations will be able to survive as they bring their operations onto the Web.

Murdoch has criticized Google for aggregating New Corp. content and profiting off the distribution of stories from the Wall Street Journal and Times of London, for example, without bringing revenue back to those news organization.

“To be impolite, that is theft,” Murdoch said in his speech at the FTC.

According to some reports, News Corp. has been talking to Microsoft about taking its content off Google sites by “de-indexing” stories and making that content searchable on Microsoft’s competing search engine, Bing.

At News Corp, which owns Fox network, the Wall Street Journal, the Times of London and satellite carriers Star TV in Australia, the key is putting as much of its original content on all kinds of devices -- cell phones, computers, e-Readers and television. And, key to this is to charge for access to that content, he said.

“The old business model based on advertising only is dead … that’s not going to change even in a boom,” Murdoch said. “Critics say people won’t pay, but I say they will. But only if you give them something good.”

The Wall Street Journal has 1 million paid online subscribers and Barron’s has 150,000 paid subscribers for its Web site. Murdoch said News Corp. plans to put all its entities behind a pay wall.

And beyond the content, one key is to give subscribers that news on any device. As such, Murdoch said News Corp. will use some of its spectrum to bring content to mobile devices.

There have been many ideas tossed around by newspaper industry executives on how to cure the ills of the industry suffering under heavy costs and eroding revenues. Murdoch said one idea of a federal tax relief for newspapers is ill-conceived.

“The prospect of the U.S. government getting involved in American journalism ought to be chilling for anyone interested in public speech,” he said.

Instead, he said the government should stand aside, except to update what he considers to be arcane media ownership rules that don’t fully grasp new economic considerations presented by the Internet.

He called for the Federal Communications Commission to reconsider a rule that bans one entity from owning a newspaper and radio or television station in the same town. That rule was put in place decades ago, he said, to ensure competition. But that doesn’t make as much sense when new competitors have emerged online and a local television station now faces competition from a Web site halfway around the world, for example.

photo credit: International Business Times

By Cecilia Kang  |  December 1, 2009; 10:55 AM ET
Categories:  FTC , Google , Media  
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Next: Cable industry proposes 50 percent discounts on broadband service serving middle school students


Cue up the inevitable comment-thread idiocy about how "liberal bias" has killed newspapers, how we can just rely on blogs for news, etc.

Boy, can't wait.

Posted by: ChristopherMc | December 1, 2009 12:26 PM | Report abuse

I'll gladly pay an online fee to eliminate the influence of advertising in the news media. So, now can we get some truthful information, not scubbed or censored because of the worry about ad revenue dropping?

Posted by: conk | December 1, 2009 12:32 PM | Report abuse

You know what they ought to try? They ought to try honestly reporting the news of things that are happening in the world that are going to affect our lives, whether they like the story or not. And, they ought to maybe not form an opinion and then find a news story that fits. Instead there ought to be some kind of standard that puts the truth at the top. We will know it because it will let us think instead of feel. That would be a commodity that is rare and in-demand.

Posted by: minutemom | December 1, 2009 12:35 PM | Report abuse

Right on cue!

Posted by: ChristopherMc | December 1, 2009 12:44 PM | Report abuse

Oh, Mr. Murdoch... Go back to basics. ECO101: As the market space approaches perfect competition, prices approach 0. This is why sellers strive for monopolies. Once obtained however, they dictate the prices. Even just having one competitor can cause prices to plummet (eg: Apple and Msoft - think Windows would be as cheap as it is if Apple had not been dogging them these past 25 years?)

When it comes to news/information, the web is as close to perfectly competitive as it gets. Try to charge for news and access to content of all kinds. Go ahead. You already tried and it failed. Form a cartel with all the other news orgs., get the gov't to back you on it. It still won't work. It's like OPEC. It doesn't work.

I know not what the future for "the news" holds but I can tell you this: It is nothing like the past and you can't make it that way. Papers and other media publishers don't sell information and infotainment. They sell *access* to news and infotainment. Well, not anymore. Go back to books that cost $29.99 instead of reading them on-line? No. Buy a classic for $2.99 on used books when it can be read at the Gutenberg Project on-line-- or any number of other places? No.

People will pay nothing for anything they can get for free.

The only way you can stop this is to kill the Internet. Good luck with that.

Posted by: mcc99 | December 1, 2009 1:07 PM | Report abuse

It is surprising to see Murdoch making such a huge marketing mistake. Thankfully there are many, many sources of NEWS (so far) in the Internet world. This may eventually change, if certain (unnamed) international news moguls and financiers violate antitrust laws of the various nations, and universally require subscriptions. Otherwise, Murdoch will get an unpleasant surprise, if he unilaterally moves to exclusively Internet subscriptions. If that is why he bought the Wall Street Journal, then he made a very expensive mistake. Rupert - I suggest you call Little Pinch, and ask him how well his subscription experiment went.

Posted by: Americanus | December 1, 2009 1:16 PM | Report abuse

Dear mainstream media,

You really are detestable propagandists now, you know that?

By the way, "journalists," did you hear the one about Climategate? Arguably the biggest scientific hoax EVER? A horrendous example of collusion, deceit, and suspension of basic professional ethics?

[Cue chirring crickets]

[chirring crickets]

[... crickets still going to town]

[chirr, chirr, chirr]

Oh, well, the secret's out, regardless of your deliberate obtuseness and long-term total lapse of any desire to do anything that remotely resembles reporting.

Hmmmm ... come to think of it, "A horrendous example of collusion, deceit, and suspension of basic professional ethics" could also double as a description for the mainstream media.

Nice going, guys, you've managed to decimate the fourth estate on your "watch."

But where one institution fails, another crops up: the alternative media is the watchdog now. You mainstreams have relinquished your post in disgrace, all in the name of your precious agenda.

An aside to ChristopherMc: the "idiocy" is from those pants-crapping "high-minded 'progressives' " for whom "the debate is over" on a scheme the rest of us could smell the stench of right away, from the get-go. Led by the nose much? You should be insulted and embarrassed; and you ought to be cluing yourself in about the true motives of those who used you and your type to forward this power- and wealth-grubbing scam. But, you're too busy worrying about Palin's book sales.

Posted by: finsher771 | December 1, 2009 1:20 PM | Report abuse

I don't want the government to own the news, but I don't want Murdoch to own all the news either.

Posted by: mrrationalhbg | December 1, 2009 1:23 PM | Report abuse

It's not impolite to call what Google does "theft", it's incorrect. Surely at this point, Murdoch himself must be aware that delisting from Google is as simple as typing a few words into a text file on your web server. His constant and consistent misrepresentation of how news aggregators work is downright unethical.

To complain that Google steals news is like complaining that news stands in the airport, on the street, or in the local deli are stealing news and reaping the rewards associated with showing a few headlines and snippets of text, surrounded by other goods.

However, we're going to hear this drum beat on and on because old media publishers still control a lot of information, and it's in the best short-term interest of the dinosaurs running them to continue misrepresenting reality.

Posted by: leviathant | December 1, 2009 1:24 PM | Report abuse

"People will pay nothing for anything they can get for free."

But aren't you kind of begging the question? This is the very point that's at issue: whether newsgathering can continue to be sustained under the "free" model. Murdoch thinks it cannot. I suspect he's probably right.

It's all fine and well to say that people won't pay when there's news to be had for free. But what happens when there's no news to be had anymore *at all*, because producing it is no longer profitable?

Some people seem to think the "Internet" will just magically keep churning out news somehow, as if "news" is some natural element that just exists in the wild. It's not.

Posted by: ChristopherMc | December 1, 2009 1:28 PM | Report abuse

" ought to be cluing yourself in about the true motives of those who used you and your type to forward this power- and wealth-grubbing scam."

Um, I'm conservative, you goofball. I understand the problem with ideological bias in the media, which I dislike as much as you. But that problem has nothing to do with the financial woes of the news industry, which are about advertising revenue, not readership.

Posted by: ChristopherMc | December 1, 2009 1:32 PM | Report abuse

Mr. Murdoch ought to understand that most other industries are under assault with the direction that our POTUS is trying to take us.

New organizations aren't the only ones where profit is in the crapper, the difference is that with news organizations, they have become such an obvious tool of their own partisan politics that they have become a very unreliable source of true and factual news,I for one will never buy a newspaper nor will I spend money for such garbage online.
I will continue to decipher the true news from the manufactured but I sure won't pay for the burden of doing so.

Posted by: Drider | December 1, 2009 1:35 PM | Report abuse

My point, finsher771, is that I'm tired of threads about the media industry being ruined by dimwits -- on both sides of the spectrum -- who clog up the conversation with a bunch of irrelevant ideological stuff.

Bias in the media is a problem. So go talk about it somewhere where the subject is media bias. It's not relevant to the topic of media profitability in the Internet era, which is a fascinating discussion and doesn't need to be ruined every time by people who don't understand it.

Posted by: ChristopherMc | December 1, 2009 1:36 PM | Report abuse

All Murdoch wants is a piece of the Pie. Google gets over 85% of the Internet searches and he wants his Bingy Thingy to compete with that. Follow the money.

Posted by: pick1side | December 1, 2009 2:20 PM | Report abuse

these regulations were put in place to stop media monopoly's and keep the freedom of information open to all and not in the control of a few. Not for commercial reasons or competition. funny how the inventor of bias media want's remove the last ounce public control. This guy won't be happy until he controls all information. can you imagine a world where fox controls the flow of information. I mean even more than it does now.

Posted by: rparker101 | December 1, 2009 2:20 PM | Report abuse

This is what happens when you try to trade or broker information. The free press makes this just about impossible. And Murdoch has bastardized media by allowing content that is inaccurate, misleading, or so slanted that it stops bearing resemblance to journalism.

Posted by: benintn | December 1, 2009 2:59 PM | Report abuse

"This is what happens when you try to trade or broker information. The free press makes this just about impossible."

There's a difference between information and content.

Posted by: ChristopherMc | December 1, 2009 3:05 PM | Report abuse

Mr. Murdoch: Haven't you made ENOUGH money? Surely you're old enough to RETIRE; please do so and stop hogging the media on YOUR losing money. Who cares? Everybody out here in the heartland is "losing money" or have already LOST it because of people like you, the government, and bankers.

Most of us would just as soon see you GO OUT OF BUSINESS! When we fail, we don't run around the world trying to persuade everybody else to follow our FAILING LEAD! So now you want GOVERNMENT help? PLUUUEEEEEZ! FAILURE is what happens when you don't have a good product to sell -- and you DON'T! You don't publish the NEWS; you publish TRASH and nothing whatsoever about all the corruption and naming names on Capitol hill. Just CIA lies and garbage.

You publish everything, in fact, EXCEPT the "real" news. I guess you'll have to start publishing in Britain because they're the only ones reporting anything even "approaching" "news". People in other countries pity "the poor dumb populace of America" because we've been subjected all these years to your SPIN and LIES. Only the internet has curbed your power to dumb us down, as is also happening in the schools. Readers would like to know just how many "investigative" reporters you have, and what big EXPOSURES have they revealed.

Surely there's a story in all the current CORRUPTION in D.C. There are millions of stories to tell and a boatload of corruption to EXPOSE, for instance Sibel Edmunds' court testimony involving Congressional bribery of the Chair of the House Intelligence Committee (D-IL) Jan Schakowsky by the Turkish council. WHERE WERE YOU AND YOUR "FABULOUS" NEWSPAPER, MR. Murdoch??

You could have had a BIG impact on bettering this country by reporting THE TRUTH and THE NEWS; instead you've minimized your value to the American public by printing TRASH, no NEWS!

I hope all your running around, monopolizing the news with your "poor me" story doesn't work and that you reap EXACTLY what you personally have sewn.

Posted by: winsom88 | December 1, 2009 3:18 PM | Report abuse

Mr. Murdoch,
Please remove all of your biased and extreme News Corps content from Google. Do it today. Why do you sit there and let Google steal "news" from you? Charge folks and make them have to sign in to read the biased, inflammatory junk you try to sell. Seriously, go!

Posted by: thebobbob | December 1, 2009 3:50 PM | Report abuse

I make it a point to avoid any news fabricated by the Murdoch empire including anything that's reported on Faux. However, I think Rupert has a valid point, and I believe anyone who reads or watches his brand of "news" should pay for it. The problem is, what is the value of BS? Also, would he give loyal Tea Baggers a discounted rate?

Posted by: billwan | December 1, 2009 4:37 PM | Report abuse

I'll believe that news won't be paid for by advertising when Mr. Murdoch removes all advertising from his magazines, newspapers, and web sites and only those that purchase them pay. The TRUTH is that ads pay for all of these items, and have for decades. One only has to look at the content v/s ad ratio for any media to see that even media that is paid for by consumers directly, such as magazines and newspapers, contain SIGNIFICANT ad content.

Without ads, this content will be too expensive. Mr. Murdoch only wants to be sure that only HIS ads get eyeballs, not Google's or any other aggregator. Here is a thought Mr. Murdoch .. find a way to share ad revenue when Google shows one of your news articles. 'Cuz I know I won't be paying to view your site.

Posted by: fredisstilldead | December 1, 2009 6:31 PM | Report abuse

Murdoch: "Critics say people won’t pay, but I say they will. But only if you give them something good."

Evidently Mr. Murdoch never learned, or has forgotten (more likely, given his age) about the online pay scheme of his arch-nemesis the New York Times called TimesSelect. As Santayana warned...

But then, WSJ readers, flush with their TARP-financed bonuses, can afford to pay more readily than NYTimes readers.

Posted by: 54Stratocaster | December 1, 2009 9:11 PM | Report abuse

Check out "If Murdoch owned a restaurant" at

Posted by: ebhb2004 | December 2, 2009 8:34 AM | Report abuse

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