News Corp loses $3.4B, starts charging for online access

[Feral Abacus]

Murdoch aims to charge for News sites within year

Rupert Murdoch has ramped up his push to make readers pay for news online, saying News Corp will start charging for access to all its news sites across his media empire.

Seeking to counter the leakage of advertising revenues to the internet, which has hurt the traditional business model of newspapers, the 78-year-old media mogul said today he was “very hopeful we can produce significant revenues from the sale of digital newspaper content”.

“Quality journalism is not cheap,” Mr Murdoch said. “An industry that gives away its content is simply cannibalising its ability to produce good reporting.”

He was scant on details for such business models today, which could include online subscriptions, charging fees to read single stories and selling content on new platforms such as mobile reading devices.

But he said that News Corp would start charging soon.

''We're thinking in terms of this financial year," Mr Murdoch said.

It’s been a deep change from his stance only two years ago when he maintained advertising would fund free sites.

Since then, the global advertising recession has cut swathes through the profitability of News Corp’s newspaper and free-to-air television business. The company today posted a $US3.4 billion ($4 billion) loss for the year to June.

Mr Murdoch said that the success of the company’s profitable Wall Street Journal subscription site had convinced him that readers were willing to pay for quality content on the internet.

But, contrary to industry studies advising publishers to focus lucrative niche sites with specialised content such as finance news and sport, the News Corp chief today said chargeable quality content came from all the company’s news sites including its pay TV channel Fox News and even celebrity scoops of its British tabloid paper The Sun.

In Australia, the company publishes papers including The Australian, The Herald Sun and The Daily Telegraph.

Mr Murdoch said the company was in talks with hardware providers such as Sony about mobile devices to deliver news, unhappy with the model provided by Amazon’s Kindle reading tablet, which distributes newspaper content giving publishers part of its revenue without sharing information about its subscribers.

Newspaper publishers worldwide have started looking to online subscriptions and mobile content for new income streams as the global recession and the move of readers to the internet has hurt advertising demand and dried up their classified sales.

But not all are convinced they will be able to convince readers to pay for content they have for years been able to access for free.

Mr Murdoch seemed unperturbed being the first one to push ahead with the model, and forecast others in the industry would follow him.

“The tumultuous and unprecedented change affecting the entire media sector, particularly newspapers and the free-to-air broadcasters, cannot be ignored,” he said. “I think it will be successful and followed by other media.”

In a year Murdoch press has had a $US8.4 Billion write down, so it's not really surprising that they're moving forward so fast on charging for access. The recession has just accelerated whats been happening for ages anyway, and the rivers of gold have finally dried up. The major problem i see with this is that if other competitors don't follow suite quickly News Corp will lose all their customers to the free sites. It's easy to see how Fairfax et al could capitalise on this. Why would you pay for something you can get elsewhere for free?

[ThomasP]

This is making the same mistake as the music industry and ignoring the same lessons about artificially restricting the supply of a product that's not scarce.

I just don't think the same business model can apply in a digital setting.

[Duckie]

I'd probably agree that I can't see this ending well for News Corp- I don't think they'll recoup a lot of losses, because besides maybe the WSJ for financiers who wants to pay to read a Murdoch Rag? Especially when you can get news free online somewhere else?

Then again, I wholeheartedly support Rupert Murdoch undertaking any course of action I feel will lead to the downfall of his media emprie.

[Stargate Nerd]

“Quality journalism is not cheap,” Mr Murdoch said.

Is this a joke that I'm too dense to get?

[The Yosemite Bear]

“Quality journalism is not cheap,” Mr Murdoch said.

Is this a joke that I'm too dense to get?

yes, but what does that have to do with Murdoch and his media empire.

[Feral Abacus]

“Quality journalism is not cheap,” Mr Murdoch said.

Is this a joke that I'm too dense to get?

Well, not all of News Ltd/News Corp's papers are sleazy right wing rags (The Times, The Australian?), and it is very true that most investigative journalism is quite expensive to maintain, particularly without revenue streams from classifieds. But a lot of what they do is just stenography, repeating stuff broken by other newspapers or bought off AP. I'm certainly not going to pay them for that.

[von Neufeld]

You mean that Faux news becomes payers only?!
Oh happy day, oh happy day!

[The Yosemite Bear]

So that's how they are going keep Stewart from making fun of them.

[Patrick Degan]

This is making the same mistake as the music industry and ignoring the same lessons about artificially restricting the supply of a product that's not scarce.

I just don't think the same business model can apply in a digital setting.

No, this is making a worse mistake than the music industry, and a fundamentally stupid one for reasons that have already been pointed out. I work for a newspaper presently and our publisher wouldn't even dream of wasting time or effort on such a scheme and neither would any other paper in the regional group ours belongs to. The people who aren't going to pay for an actual newspaper subscription are not going to pay for the online edition because there are already far too many free news sites out there. This is a business model which is fundamentally doomed; newspapers which have tried this are losing money and selling online advertising hasn't done jack shit to change that financial picture either.

[Crossroads Inc.]

Ill agree with others in saying the very idea of this is idiotic from the start. If someone is alreadsy reading news online, it eans they dont care to pay for a newspaper, if you start charging people to use your site, you are going to see readership vanish in a matter of week.s

[Darth Wong]

If any general-interest news organization can make this work, I'd imagine it would be FOX. Right-wing people are incredibly reliant upon their preferred news sources. They're not like normal people, who can simply switch to another source or even go to another country and start reading BBC or CBC. They desperately need their self-affirming ideologically pure pseudo-news Pablum. These people simply aren't accustomed to thinking for themselves: without someone to tell them what to think about everything, how would they function?

[Androsphinx]

Murdoch has a couple of other tricks up his sleeves as well. In the UK there's a sustained attack (by, unsurprisingly, the Times) on the "unfair advantage" of the BBC's guaranteed revenue which allows them to provide superlative news coverage.

I don't know how this would work for Murdoch's down-market papers like the Sun and News of the World, but I can certainly see people paying for the Times, and might even do so myself - something has to pay salaries and production costs, after all.

[Crossroads Inc.]

That is actually something I hadn't considered...

Any sane person, if they lost a preferred news source, would immediately know of several other online news sites to go to. CNN, MSNBC, even Yahoonews. But far righties? If they lost foxnews, it would be like sheep without a Sheppard, where would they go? It is both sad and frightening to think these people would go "Well I don't want to pay for it, but what other choice do I have?"

[Darth Wong]

That is actually something I hadn't considered...

Any sane person, if they lost a preferred news source, would immediately know of several other online news sites to go to. CNN, MSNBC, even Yahoonews. But far righties? If they lost foxnews, it would be like sheep without a Sheppard, where would they go? It is both sad and frightening to think these people would go "Well I don't want to pay for it, but what other choice do I have?"

It's not just that they're sheep, they're insecure sheep. They need the self-affirmation that comes from FOXNews' constant demographic back-patting. It makes them feel good about themselves, and reminds them of not only the superiority of "real Americans" but also the superiority of America (by which they mean themselves, not those other Americans) to the rest of the world.

[Solauren]

As it's been pointed out, the sheep that love Fox will pay for this.

Problem is, will they be able to afford it? If they can't really, this could backfire 1 of 2 ways

#1 - Fox doesn't get the revenue they are expecting, and we all laugh at them in our best Nelson Munst voice. (HA-HA!)

#2 - the Fox Sheep pay for in anyways, and bills get tigher for them. This could cause larger problems, depending on how much Fox is charging. The odds of this are pretty low, but it's still a possibilities.
Related example; Old people without alot of money sending it to Televangelists in the 80's and 90's

[Guardsman Bass]

If any general-interest news organization can make this work, I'd imagine it would be FOX. Right-wing people are incredibly reliant upon their preferred news sources. They're not like normal people, who can simply switch to another source or even go to another country and start reading BBC or CBC. They desperately need their self-affirming ideologically pure pseudo-news Pablum. These people simply aren't accustomed to thinking for themselves: without someone to tell them what to think about everything, how would they function?

The only snag in that that I could see is that there are a lot of popular right-wing websites out there (aside from news websites), like blogs and WorldNetDaily, that re-print part or all of articles. If Fox really started charging for all online access, I could see those websites booming by reprinting content.

As for the OT, this isn't going to work for Fox. The only one of the papers that has gotten away with (partial) online subscription fees is the Wall Street Journal, and that's because they're a financial paper with some specialized financial information that investors and the like are willing to pay for (the subscription wall is only around their business and financial news sections on-line). That won't work for The Sunday Times, or a number of other Fox papers.

This is a business model which is fundamentally doomed; newspapers which have tried this are losing money and selling online advertising hasn't done jack shit to change that financial picture either.

It'll be interesting to see what becomes of newspapers as times go on. Right now, most papers make much more money off their print editions than their online editions - but the print editions also amount to a significant cost.

[Patrick Degan]

That is actually something I hadn't considered...

Any sane person, if they lost a preferred news source, would immediately know of several other online news sites to go to. CNN, MSNBC, even Yahoonews. But far righties? If they lost foxnews, it would be like sheep without a Sheppard, where would they go? It is both sad and frightening to think these people would go "Well I don't want to pay for it, but what other choice do I have?"

It's not just that they're sheep, they're insecure sheep. They need the self-affirmation that comes from FOXNews' constant demographic back-patting. It makes them feel good about themselves, and reminds them of not only the superiority of "real Americans" but also the superiority of America (by which they mean themselves, not those other Americans) to the rest of the world.

Very much like the disciples in a mind-control cult, actually.

[Uraniun235]

The only snag in that that I could see is that there are a lot of popular right-wing websites out there (aside from news websites), like blogs and WorldNetDaily, that re-print part or all of articles. If Fox really started charging for all online access, I could see those websites booming by reprinting content.

I would imagine that Fox would sic their lawyers on them.

[Pelranius]

The only snag in that that I could see is that there are a lot of popular right-wing websites out there (aside from news websites), like blogs and WorldNetDaily, that re-print part or all of articles. If Fox really started charging for all online access, I could see those websites booming by reprinting content.

I would imagine that Fox would sic their lawyers on them.

I can't wait for that sort of fratricidal action. Little Green Footballs takes on Murdoch and Billo the Clown.

I wonder if Murdoch is dense enough to think that if he gets into bad enough financial straights, someone will bail him out (he might be thinking of Beijing, since he's done them some favors in the past, but that's probably not enough).

[SirNitram]

It will reduce the Right Wing internet echo chamber, if only because this fee would cut into the cheetos-and-tinfoil budget.

[Darth Wong]

It will reduce the Right Wing internet echo chamber, if only because this fee would cut into the cheetos-and-tinfoil budget.

Unfortunately, I think the right wing Internet echo chamber is self-sustaining at this point. Even without FOXNews, they would always have WND and other nutjob sites out there, and FOXNews has continuously moved further and further right over the last decade, until the point where they are virtually indistinguishable from WND and its ilk anyway.

Blogs cost almost nothing to run unless you get delusions of being a real news organization, which most of them don't have. And even if they can't copy-paste from legitimate news sites, they can always just paraphrase, which is completely legal. Hell, they already do that a lot in order to distort what news reports are actually saying.

[Oskuro]

So, time to get my "I'm killing newspapers by reading webcomics" T-shirt.

[Pelranius]

Frankly, I don't think this is going to pan through, mostly because the other players in journalism aren't going to follow suit en masse, at least not quick enough to save News Corps. In that eventuality, Mr. Murdoch might have to start making some major cutbacks and all. How ironclad are the contracts for talking heads like Billo and Beck?

[thejester]

“Quality journalism is not cheap,” Mr Murdoch said.

Is this a joke that I'm too dense to get?

Well, not all of News Ltd/News Corp's papers are sleazy right wing rags (The Times, The Australian?), and it is very true that most investigative journalism is quite expensive to maintain, particularly without revenue streams from classifieds. But a lot of what they do is just stenography, repeating stuff broken by other newspapers or bought off AP. I'm certainly not going to pay them for that.

Yeahnah. Despite the name the Aus is basically a Sydney paper, for Sydney readers, and it's dominated by the extreme right-wing culture warriors that were Howard's intellectual core.

And I think people are getting a bit overexcited about who this will effect. The only part of News Corp performing well is FOX. It's the other major assets - particularly newspapers - that are down.

[Feral Abacus]

Yeahnah. Despite the name the Aus is basically a Sydney paper, for Sydney readers, and it's dominated by the extreme right-wing culture warriors that were Howard's intellectual core.

Well, the editorial staff is batshit crazy, it's not a rag like the telegraph or the news of the world. The Oz has won a fair share of Walkley's over the years. They do produce good journalism underneath all the ideological bs.