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Would you pay for that news feed?

I have a great deal of respect for Rupert’s business acumen but I can’t help thinking that his desire to charge a subscription fee for accessing the content that is now provided free just won’t work.

Rupert Murdock

Rupert Murdoch

Rupert Murdoch has flagged an aggressive push to start charging readers for News Corp’s newspapers online over the next year, seeking to put an end to the company’s profit erosion as advertising dollars shift to the internet.

“There is no doubt that the traditional newspaper model has to change, even though the present situation I think has been greatly exaggerated by the current recession,” Mr Murdoch told analysts on a conference call this morning, announcing a 97% earnings slump at News Corp’s newspapers and information services for the third quarter.

“Classified revenues are undoubtedly migrating to the web, probably not to return.”

The reason I think that this plan will fail is simply because there are just too many alternatives that will continue to be available for free and that he is approaching the desire to counteract the decline in newspaper revenues the wrong way. Perhaps what he should be seeking is a way to make online advertising more profitable. I suspect that part of the problem is the nature of online content, the fact that it can be viewed everywhere on the planet so although advertising copy will be seen my many the advertising can not be very well targeted in terms of the geography; no one wants to buy a product from a supplier on the other side of the planet.
Maybe the real solution for advertising on the net is to develop a way to make it more location specific but then it would be more something sold by service providers rather than content makers, Hmm maybe Rupert has missed the boat after all.
Cheers Comrades
😉


16 Comments

  1. David Davidson says:

    The decline in the newspaper industry has been foreseen, by those in it, for well over thirty years now.

    With the advent, and increase in “now” technology, satellites et al, the poor ol newspaper has been the sore loser. With news that is hours old, and out of date, by the time it is printed, it is no wonder that revenues are falling. I worked for two of Melbourne’s major daily papers for years, and saw that reduction even back then, and that was the late 80’s. For instance, the Melbourne ‘Sun’, had a print run of over 650k per day, but by the early 90’s that had dropped by well over a third, goodness knows how low it is now ?

    It is old technology, and let’s face it, who has time to sit and spend an hour reading a paper anymore. There are many more things we would rather be doing ?

    Guys like Murdoch weren’t stupid. They saw the writing on the wall way back, then invested heavily in the ‘live’ media, such as television and radio, and especially Murdoch in cable. Most of the newspapers back then were incredibly “cashed up”, and spent big buying television stations to ally themselves with.
    It is sad, but maybe this comes under the auspices of “well, that’s progress” ?

    I also think the days of expensive pay television, such as Foxtel, Austar and the like is numbered as well. People are tired of paying $100 a month for nothing more than re runs, and perhaps a couple of movie channels ? With digital tv coming in to most states in the next year, it will be interesting as the free to air networks, now with increased bandwidth, and access to larger audiences, attempt to get back the audience lost to pay tv. They now have the chance for multiple channel broadcasts, with material availability and with multiple channels, a larger availability to b/cast this material, it will be interesting to see if Austar and the like, can hold it’s paying audience, with all that is promised on FTA TV ?

  2. Phill says:

    I for one will be glad to see its demise.I wouldn’t buy anything with Murdochs name on it intentionally,.The crap that his media empire has/does serve up is so unprofessional biased propaganda, it is quite laughable. His electronic media outlets are I am sure, attempts at parody of old sit coms like the three stooges or get Smart, it should be closed as well.The media empire Murdoch runs is quasi government by proxy, and it is dangerous.

    I wonder what the good Dr Goebbels would have thought of it all? No doubt he would have realised how much of an amateur he was.

  3. Iain Hall says:

    Phill
    although the piece here was inspires by the statement from Rupert Murdoch the reality is that all newspapers are facing the same”problem” of falling readership and revenues. So I really don’t think that any dislike for the “dirty digger” is the issue . We are on the cusp of a very big paradigm shift in the information economy and I tend to think that players who have tried to do the big crossover game have not really understood the shift in the public attention to online. I especially think that not putting the classified adds online has been a very big tactical mistake that has let the likes of eBay and the ” Trading post online” get a grip on what was traditionally the newspapers revenue stream.

  4. Phill says:

    Again Iain I agree with you.Any mention of this mans name and his connection to the media, brings out the daggers.

    Our own newspaper in the West, the only one for that matter, is probably not far from going under from what I have read, for the reasons you stated.

    You can run adds here without paying if your (private) in a free Ad paper.

    But I still like to think that the schlock that the MSM is part of their demise.After all I am here learning and not reading the paper. I believe although I don’t agree with everything here I get my say.Have you ever tried to get a controversial opinion in the MSM? It is the old boys network, and I for one will be glad when it’s gone.

  5. JM says:

    “… the real solution for advertising on the net is to develop a way to make it more location specific …”

    There’s this new thing called Google. That’s how they make their money, and they’re a lot more than location specific; their ads are relevant to the search terms as well.

    You really need to catch up on the modern world a bit, Iain.

  6. Iain Hall says:

    JM
    I spend enough time surfing the net to be very aware of the nature of the advertising on the likes of Google and as wide ranging as it is there is little doubt that it does not cover the same “ground” that those who have traditionally wanted to use newspaper advertising for, essentially the classifieds and advertising for local (within the ambit of the papers in question) business.
    Now it is all very well to suggest that people can find what they want by using a search engine but the essence of advertising ( that business want to pay for) is that the message reach people before they know that they might want top spend their money on a product or service and search engines fail on that point alone.

  7. JM says:

    Iain

    There is no technical reason why Google couldn’t clutter their home page with ads directed at *you* based on location, none at all – they can even get it down to suburb in many cases.

    ie. before you enter any searches

    The only reason they don’t do that is their home page is their trade mark, unlike Yahoo and MSN who do sprinkle ads all over their home pages, largely based on location.

  8. Iain Hall says:

    Well thank you JM for showing just what a silly example you chose to cite in your previous comment 🙂
    And proving that you don’t know much about advertising or what makes it effective for those who sign the cheques.

  9. JM says:

    Iain I was only pointing out that your original assertion:

    “…. it can be viewed everywhere on the planet so although advertising copy will be seen my many the advertising can not be very well targeted in terms of the geography…”

    is wrong.

    Further, Murdoch made his comments after someone showed him Google News. Go and have a look.

    I think you’ll find my comments are well in line with Murdoch’s analysis – newspapers are doomed – but not his response – lock up the content.

  10. Iain Hall says:

    JM
    Just look at what is advertised on the net it certainly is not the local supermarket specials or the legal notices that form the mainstay of the papers, and I used have a Yahoo homepage and never saw locally focused advertising. It may be there but If I or anyone actually has to look for it why would a business be willing to pay for it?
    I don’t know if newspapers are really “doomed” as you put it, because they said that about radio with the advent of television and look what happened to that medium, it changed and is still going strong.

  11. JM says:

    Iain

    What are you stepping back from?

    1. That online content is unimportant for advertising and newspapers are ok?

    2. That newspapers are not ok, but the net cannot target audiences based on geography and/or interests?

    Once you’ve mulled that over, could you tell me what you mean by:

    he should be seeking is a way to make online advertising more profitable

    For Google:

    “Google reported revenue of US$5.51 billion in 2009’s first quarter, up 6 per cent “

    and

    “Google had net income of US$1.42 billion, or $4.49 per share,”

    Not too shabby for a supposedly piss-poor medium that can’t compare with newspapers, hey?

    That compares to News Corp:

    “Revenue fell 16 percent to $7.37 billion”

    “operating profits will be down 30 percent from the $5.13 billion”

    Is the Internet still an ineffective advertising media Iain?

    So what exactly is Rupert supposed to do Iain? Close his declining newspapers and out-google Google? Or shut out Google behind a pay-wall and hope for the best?

  12. Iain Hall says:

    JM
    My point is simple: the newspapers have attracted a particular group of advertisers with the particular reach and format that they provide and that, as yet there is no alternative on the net that does the same job (for the advertisers). Frankly I don’t think that it matters one scrap to my argument that Google or any other online entity is profitable , I am not for one moment disputing that they are.
    My other point is that I think that Rupert made a big tactical error in not putting his papers classifieds online (obviously to shore up sales of the hard copy ) that has obviously allowed the very erosion of his revenue base that is being discussed here.
    Murdoch , like all newspaper publishers clearly has the resources to create desirable content but as he is (in your terms) a “filthy capitalist” his problem is how to raise revenue from that content so when I said “he should be seeking is a way to make online advertising more profitable” I was obviously referring to online advertising that is on his sites, not about advertising online in general.

  13. JM says:

    “I don’t think that it matters one scrap to my argument that Google “

    Google’s only revenue source is advertising, so they must be doing something right. I think that just about scuttles your assertion that they don’t provide an alternative to newspapers.

    ‘(in your terms) a “filthy capitalist”’

    They’re not my terms, you’re mistaking me for a stereotype of your own making.

    ” I was obviously referring to online advertising that is on his sites,”

    Well he’s had 10 years give or take, why is he being beaten by other people? Perhaps they know more about it than he (or you) know about it.

  14. PKD says:

    You could always try Yellow Pages if you want a local Aussie alternative to Google guys…

  15. David Davidson says:

    Love to PKD, but the dam thing is always wrong and out of date before it even hits the letter box, hence the reason as to why it has concentrated on it’s web site I suppose ?

  16. […] post is a follow on of sorts to both the last one about copyright and this one citing Rupert Murdoch because it raises the question of just what internet users would be willing to pay for accessing […]

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