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News Corp Will Charge For Newspaper Websites
suraj.sun writes "Rupert Murdoch says having free newspaper websites is a 'flawed' business model. Rupert Murdoch expects to start charging for access to News Corporation's newspaper websites within a year as he strives to fix a 'malfunctioning' business model. Encouraged by booming online subscription revenues at the Wall Street Journal, the billionaire media mogul last night said that papers were going through an 'epochal' debate over whether to charge. 'That it is possible to charge for content on the web is obvious from the Wall Street Journal's experience,' he said."
WSJ is an outstanding newspaper. Its news articles are unique and important and interesting. New York Post, not so much.
But I would also bet that a lot of success the WSJ has had online has to do with a lot of business expense accounts paying for it.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
People are willing to pay for content in certain areas, particularly finance sources such as the WSJ or Economist, for three reasons... (1) such sources are based on a lot of exclusive research, and so much of their information can't easily be found elsewhere. (2) the nature of finance makes it worthwhile... if you're trading thousands to millions of dollars in securities or bonds, dropping $2 a week on useful information is awfully cost-effective. (3) the target market is pretty affluent and highbrow and thus less likely to blink over this sort of thing (the fact that you're not giving it away for free actually makes it look more prestigious and attractive).
However, these considerations fall apart when you turn to non-niche mainstream news. Looking at the "free" content aggregated by Google News... it's about 50% celebrity gossip, and 50% partisan political bickering with no insightful analysis behind anything. Thanks but no thanks... I'm not paying for any of that, and I doubt many others would either.
THAT is the main problem with newspapers' business models in the current climate. They are trying to compete with online sources by racing to the bottom, and dumbing down their content in hopes of reaching a wider audience. However, their main competitive advantage is in the highbrow market... which is increasingly alienated by this dumbing-down. Produce exclusive highbrow content that can't easily be found elsewhere, and you'll absolutely be in a position to charge. Write endlessly about Anna Nicole's "baby-daddy" and Britney Spears' breakdowns, and you shouldn't expect any revenue beyond advertising because you can find that trash anywhere.
If so people will pay for it. If you are just regurgitating AP and/or Reuters people will not. The Wall Street Journal and The Economist provide something unique, and have been successful with subscriptions (the fact that they cater to moneyed-folk helps too). To a lesser extent the New York Post and Christian Science Monitor provide unique information and may have luck transitioning to a subscription model.
As for the rest of the newpapers that News Corporation owns, yeah I don't think so. Some of the ones that I'm not familiar with may have sufficient unique content, but most of them don't look like it. Good luck making The Sun subscription only. The online portion of that magazine thrives on ignorant (or amused) blog linking, and would loose nearly all of it's traffic if it went subscription only.
Um.... sure they will. Hate t break this to you, but regardless of party affiliation, folks are like you and me.... cheap. If one source of news is free and another isn't, folks will flock to the free.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
I am "right wing" and do not pay for news. I will go where the information is free and there will always be an unbiased source of free news.
Athiesm is a religion like not collecting stamps is a hobby.
Well, the Wall Street Journal is a good paper though, read by people who have money to spend.
The Wall Street Journal isn't your typical newspaper, it's very nearly a technical journal that is required reading for people of a certain profession. The Journal doesn't report the same news that every other paper does, and it doesn't just rely on AP and Reuters feeds to do the work for them, it actually offers things that are nearly unique in the news industry. That, and only that, is why they can get away with a pay wall.
I would also like to hear how you explain MySpace's massive success
What massive success? Myspace made about $75 million per quarter at peak. Their traffic peaked in Q1 2008, and is down 30% since then. Facebook passed them in April 2008 and now has 3x their traffic. Myspace never made enough of a blip in News Corp. earnings to show up as a line item.
Social networking sites have a life cycle like nightclubs, and it's short. They start, if they're lucky they become cool, they grow, the losers move in, the cool people move out, and they decline. Has-been social networking sites include AOL, Geocities, EZboard, Nerve, Friendster, Orkut, and Tribe. Social networking sites have to be valued like movies - they have to make money over their run. They're not ongoing businesses. There's a long tail of trickling revenue after the peak, as with ongoing sales of DVDs of old movies. But the big money comes early if at all.
That's problem #1 with social networking sites. Problem #2 is that the demographic is terrible from an advertiser perspective. Remember, half of all clicks come from 20% of users, and that 20% buys almost nothing. That 20% of users is Myspace's demographic.
Myspace revenue comes mostly from their Google ads. Think about that for a moment. Myspace is a big site run by a bigger publisher with sizable ad-selling operations. Yet they're running Google ads, from which Google makes most of the money. If Murdoch could make online pay, they'd be selling their own ad space. The advertisers on Myspace are mostly either bottom-feeders (links to pages with more ads and similar junk) or small advertisers who haven't figured out how to opt out of having their ad appear there.
They need something akin to the news stand price. Free access to headlines & summaries, or you could pay $0.99 to for 24 hour access to all articles.
If I see an article I want to read, I'm not likely to shell out $19.99 for a subscription so I can read the rest of the article. However, I might pay $0.99 to read it. If I find myself doing that regularly, I'd switch to a subscription.
What business model? Newspapers pay out the ass to create content, put it online for free, hemorrhage subscribers, and go broke? It's very Web 2.0, I'll give you that.
I think he's right. They're not gaining enough from putting it online for free to justify continuing the experiment. Our (I work for a newspaper) own numbers are still going up, but they're not going up enough...The online revenue isn't going to stabilize at a level that's high enough to allow the business to continue.
I've been harping on flipping the pay model for a while: right now a lot of papers charge for archival data...Stuff that's old, and has a very limited earnings potential...And give away the current stuff for free. If you flip that, and charge for anything in depth for the last 14 days(or so), and then release everything older than that for free, you keep your internet revenue stream, while still driving a viable pay product.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Those who buy the trash in paper form are rapidly disappearing however, mostly because they can find the same level of garbage online, for free.
The missed concept here, on Murdoch's part, is that people don't even think they 'pay' for the news now in electronic media formats.
Sure we sometimes pay for channels on TV, but pretty much every channel that offers news is offered for free over the airwaves. How is it funded? ADVERTISEMENTS/COMMERCIALS. You hear about OJ, then you see a commercial from Gerber... Etc...
This is actually how most news websites seem to operate right now, which does not appear to be failing.
I'm not sure what premium content Mr. Murdoch thinks he can offer for a fee, but as posted earlier, people will simply choose the source that doesn't charge. Maybe we will have to 'pay' by trying to ignore penis enlargement banners and the new Ford car model... But I think we're all pretty well adapted to doing that anyway.
Fuckem. Let the proof be in the pudding. I hope he takes Faux news along with him to the fail party.
The thing with the Wall Street Journal is that most of the subscriptions are directly paid by companies or else put on the subscribers expense account. It's the same reason that internet access costs you $10.00 per day in a $250.. a night hotel and is free at the $50.00 a night place.
Some mornings it's hardly worth chewing through the restraints to get out of bed.
I don't understand. Why do we need newspapers in 2009? Please note: I'm not talking about "news-gathering organizations," but newspapers. Technology has moved on and newspapers have not: By the time they come out, the news in them is always old. Always old. That was one thing in the days before the Internet and before the 24-hour news cycle introduced by CNN and FoxNews and similar channels, but it's very much another thing now and not something that's required by dint of its very existence. Likewise, the costs of producing newspapers are so stratospheric, that producing them is not a smart business decision. Again, once upon a time, that didn't matter: because there were classified and print advertisements. Those are, for all intents and purposes gone.
Newspapers need to die. It's their time. This is not a bad thing. This is not a good thing. It's just the thing. There are other, better ways of distributing the news now. The idea that the only way for people to get news is to have a clump of newsprint pages thrown on your front porch (or in your driveway) every morning is ludicrous and has no relationship whatsoever to the society we live in.
News-gathering organizations need to give up newspapers and find a way to distribute their work profitably on the web. I do not know how to do this, and I realize no one does. But no one is going to figure it out as long as they cling to the idea that the production of the paper is more important than what's printed ON the paper. And that's something that much of the newspaper industry--and apparently you--are still confusing.
Frankly, I think it's best if news organizations remain for-profit. Not just because I don't want my tax dollars to have to subsidize the people who write The New York Times or The Los Angeles Times or any of the other publications that have nothing but contempt for me. But because it will force them to compete and offer better product. I find it more than a little distasteful that you advocate in favor of monopolies in your message; monopolies don't make anything better, they merely ensure that the status quo will never, ever change. But now it has to. And it will do so all the sooner--and much more effectively--if everyone is playing the game and figuring out the best way to one-up the other guy. That's how evolution in business happens.
Newspapers have been ignoring this for decades. News-gathering organizations no longer have that luxury.
--Matthew
"If the lights of Broadway blind me, I won't mind..."