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Up next in News Corp. paid-news strategy: e-Reader, Fox

Rupert Murdoch, the media titan in charge of News Corp., was clear last week about his view on the future of media: It won’t be free.

He said a news business model that relies on advertising and classified alone is dead. That’s why he said at a workshop at the Federal Trade Commission, that News Corp.’s properties, which include The Wall Street Journal and Fox Television, would be charging for its content.

As such, News Corp joined with Hearst, Conde Nast, Time and Meredith said they would take on the e-Reader market by joining to create a common platform for readers to pay for the stories they get from those publications through devices like the Kindle.

The publishers said it would welcome other publishers to also put their content on their platform. The business model is to create revenue from content and advertising sales, as well as from print subscriptions.

"For the consumer, this digital initiative will provide access to an extraordinary selection of engaging content products, all customized for easy download on the device of their choice, including smartphones, e-readers and laptops," explained John Squires, the venture's interim managing director. "Once purchased, this content will be 'unlocked' for consumers to enjoy anywhere, anytime, on any platform."

By the end of 2010, Forrester Research estimates that 10 million e-readers will be sold in the U.S., and according to m:Metrics (comScore), there will be over 50 million smartphones in the U.S. by the end of 2010.

Earlier this week, News Corp.'s chief operating officer, Chase Carey, drilled down on Murdoch’s strategy. The company wants to put content behind a paywall as it’s become clear that online advertising alone won’t be enough to support the high costs of producing newspaper and broadcasting content.

“We need to have a business model that enables us to compete with the ESPNs, TNTs, and USA Networks,” Carey told Wall Street analysts Monday at the UBS Global Media and Communications Conference, according to USA Today. “We’ll probably have some noise (from cable and satellite companies). But it’s important to us and we’re going to do it.”

As such, Carey said News Corp. is preparing to charge for access to Fox content, which is currently offered as free broadcast content for cable and satellite distributors, according to USA Today.

Photo: Chase Carey
Credit: Broadcasting and Cable

By Cecilia Kang  |  December 9, 2009; 9:00 AM ET
Categories:  Media  
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