Murdoch's big gamble
The era of the free read will shortly be over – if Rupert Murdoch has anything to do with it. Internet users will soon have to pay for accessing any of his newspapers' content. "Our policy is to win," says the media mogul.world Updated: Aug 06, 2009 13:34 IST
The era of the free read will shortly be over – if Rupert Murdoch has anything to do with it. Internet users will soon have to pay for accessing any of his newspapers' content, from the latest snaps of Angelina Jolie to reportage from the Afghan front line or analysis of MPs' expenses.
In a daring move intended to clear a cloud of financial gloom hanging over Fleet Street, the uncompromising Australian-born media mogul has lost patience with giving away his expensively produced journalism on the internet for nothing.
"We intend to be platform neutral but never free," said Murdoch yesterday, as he set out his plans to dig his News Corporation out of a loss-making hole. "We're certainly satisfied we can produce significant revenues from the sale of digital delivery of newspaper content."
A top-level team at News Corp, including Murdoch's son, James, and Dow Jones's chief, Les Hinton, is studying the most lucrative method of imposing a "fee barrier" on websites without losing so many readers that online advertisers flee. In Murdoch's eyes, a collapse in print advertising during the recession has left papers with few options.
"The extent of the downturn has only increased the drumbeat for change," said Murdoch. "Classified revenues will never again reach the levels once seen in print."
Murdoch hinted in May that his thoughts were moving in the direction of online charges. But after his media empire suffered a swingeing $3.4bn (£2bn) annual loss, he pledged that he would take the jump by the end of the company's financial year in June 2010. Once reliable moneyspinners, News Corp's British newspapers suffered a 14% drop in year-end advertising revenue. Profits across the group's global newspaper division slumped from $786m to $466m.
The 78-year-old proprietor is hardly alone in pondering such a move. The New York Times and the Independent have all indicated, with varying degrees of enthusiasm, that they are looking at the possibility of charges. But analysts say the move carries heavy risks.
"The previous trend online has been that whenever pay walls have gone up, people flee fairly quickly, at the flick of a finger, to other content that may not be equal but that seems good enough," said Ken Doctor, a newspaper expert at a US consultancy, Outsell. "Clearly, in this environment, there's plenty of good enough content out there."
The precise nature of potential fees is unclear – the New York Times has said it is pondering a "metering" model of charging for content, or a "membership" barrier.
Most media experts agree that for newspapers to survive, something needs to happen. The financial sage Warren Buffett recently warned that papers face the possibility of "just unending losses" unless they find a new business model, while former US presidential candidate John Kerry observed that "newspapers look like an endangered species".
Among Fleet Street titles, the Independent is struggling with debts and has spent nearly three months trying to negotiate refinancing with creditors.
The News Corp boss pointed to the Telegraph's recent run of scoops about MPs' expenses as an example of journalism readers would pay to read: "I'm sure people would be very happy to pay for that."
Rarely afraid of a confrontation, Murdoch made it clear that he was gearing up for a bruising fight: "Our policy is to win."