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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."
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.
On the other hand, everytbody knows that charging for something that everyone else provides for free is a winning strategy.
Also, Murdoch, please be sure to notify Google that you don't want their help in gaining readership. I would also like to hear how you explain MySpace's massive success ... you only host that for free because it's user created content? You can't afford a staff with the money these sites bring in?
Good luck, you're going to need it. I would claim a move that reduces readership in any way is a bold move by any news source.
My work here is dung.
I can see people paying for a sub to the WSJ, but not some daily news site. People make a living off WSJ info, not so many off whether or not the swine flu spread to the depths of South Alabama overnight... Surely this genius' comment was taken out of context. I mean he's a 'mogul'... surely he knows better... surely, Shirley.
What does Murdoch know about making money, anyway?
quiquid id est, timeo puellas et oscula dantes.
WSJ gives free access to premium content if you are being redirected from google, facebook, digg etc. Here is a dirty little secret. The entire content on WSJ is available to you for free, if you can trick WSJ into believing that you have been directed to their webpage via digg.com!
Step1) Use firefox
Step2) Install refspoof http://refspoof.mozdev.org/
Step3) Install greasemonkey https://addons.mozilla.org/en-US/firefox/addon/748
Step4) Install this script in greasemonkey http://userscripts.org/scripts/show/42134
Step5) Profit!!
What does Murdoch know about making money, anyway?
I don't know. But I know this: it sets off alarm bells ringing when somebody claims that a business model which has been evolving for nearly two decades is 'malfunctioning' just because it's not working in precisely the way in which they personally want it to work.
Believing that the universe revolves around you may be a useful trait for someone determined to push their agenda onto the world, and make money whilst doing so. But I don't think for a second that makes those people right - just powerful.
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
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.
The question is what the Wall Street Journal provides that people are paying for. Mr. Murdoch seems to think that people are paying for access to the general newspaper sections that are shared with other papers - global news, national news, op-eds. I strongly suspect that he is wrong, that subscribers are paying primarily for the financial news. If I am right, then this model cannot be easily expanded to other newspapers.
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.
Today, a citizen of Boston can use the Internet to read news from a variety of sources: "New York Times", "The Washington Post", "San Francisco Chronicle", etc. He is not forced to buy only today's editon of the "Boston Globe".
Just as any standard economics textbook states, if you destroy the monopoly by introducing competiton, monopoly profits also disappear. So, the "Boston Globe" is bleeding money.
Yet, is this competiton good? Maybe not.
Monopoly profits enable a newspaper to fund long-term investigations for stories that benefit society. For example, Bob Woodward and Carl Berstein spent months in investigating the "Watergate" scandal. That investigation cost money.
In much the same way, the monopoly profts of the old AT&T, a telephone monopoly, funded breakthrough research at Bell Laboratories. It gave us the transistor.
A research environment -- for either newspaper-investigative research or scientific research -- is ideal for allowing dedicated individuals the freedom to pursue their interests for the betterment of humankind. Competition -- with its profit-reducing mechanisms -- precludes such an environment.
What can we do? There are 3 options.
1. Go with a Public-Broadcasting Service model. Turn the newspapers into non-profit organizations that hold pledge drives to raise money. The government provides matching funds. The government, essentially acts, as the sugar mama. There is 1 potential problem. The government might try to control the news. If the investigative reports by a government-funded "Washington Post" reveal terrible things about a liberal politician, will a liberal-party-dominated government try to reduce funding to the "Washington Post"?
2. Go with an endowment model. A rich philanthropist sets up a non-profit newspaper funded by the interest of a billion-dollar endowment. The salaries of the entire staff is paid by that endowment. In this model, the newspaper is free of external meddling.
3. Go with a public-service model in which a major non-profit organization (e. g., a university or a church) maintains a newspaper division. The best example of this model is the Christian Science Monitor.
I think that choice #2 is best.
Regardless of which model is best, we must continue to have newspapers in our society. Newspapers are the bulk of the 4th branch of government. They are our eyes and ears in keeping us informed about our government. An uninformed electorate is the first step toward creating an authoritarian society.
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.
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.
Which is why this is a great move. Not for Murdoch or News Corps employees of course, but for all of the free news web sites out there. News Corp is removing its self from the gene pool and will drive traffic to the sites that 'get it'. And with increased traffic comes ad revenue, commenters ^H unpaid content providers, and with more revenue and more content they can offer a better product.
And what are you going to do when we're all charging for access? That time is coming and a lot sooner than you'll like. Online advertising revenues aren't going to carry the water by themselves. At some point, you're going to either pay up or do without.
Owning a newspaper has always been about the vanity of owning a newspaper, they've never made money.
Absolutely false. Newspapers' profit margins have traditionally run upwards of 15 percent (by comparison, ExxonMobil (XOM) has a profit margin of just under 10 percent). The reason newspaper publishers are whining now is because they're no longer making money at rates that make the Mafia envious and are desperate to preserve a profit margin that's possible in no other industry. Until a few years ago, print advertising paid revenue like no other source, to the point that newspaper executives (who, almost without exception, are not from the reporting side of the industry [/bitter]) flat-out refused to consider spending money on trying to figure out how to come up with some sort of business model for online content delivery. Newspapers are still profitable; the bean-counters' problem is that newspapers aren't as profitable as they used to be and the bean-counters haven't come to terms with that fact yet.
I can't begin to count how many meetings I had to endure where business-types implored us reporter types to figure out how to attract younger readers to the traditional printed newspaper. They really didn't want to hear me tell them that younger readers have grown up with the Internet, greatly preferred online news delivery and really didn't care about a product that was at least six hours old by the time they got it. I rather suspect --- but can't prove --- that my bluntness on that topic made me part of the class of laid-off-and-bought-out journalists back in 2005, when it was still a bit of a rarity compared to now.
Prevent Windows piracy. Use Linux instead.