Murdoch's strategy isn't to profit off online news at all - it's to cultivate an industry-wide strategy that makes online news completely unprofitable. If people are forced to pay for online news, they're more likely to switch back to print.
The problem with this strategy is, of course, that while News Corporation can certainly strongarm lesser corps into following their actions lock-step, it's notoriously harder to convince a ragtag band of hacker journalists with a wifi card, laptop and camcorder as their biggest overheads to follow suite - they've less to lose, and less for Murdoch to threaten. And even if you do, there's a few thousand others you have to coerce as well.
"The problem with this strategy is, of course, that while News Corporation can certainly strongarm lesser corps into following their actions lock-step, it's notoriously harder to convince a ragtag band of hacker journalists with a wifi card, laptop and camcorder as their biggest overheads to follow suite - they've less to lose, and less for Murdoch to threaten."
The "rag-tag band of hacker journalists" is a silly bit of romanticized fiction. Even if a few "rag-tag" journalists exist, and even if they manage to produce hard news in some semi-legitimate form, they've got to feed their families, too. Real reporters have full-time jobs. They can't do it for free.
One of my biggest pet peeves with the technology industry is that highly paid programmers -- intellectual property professionals! -- act as though content is just some sort of data stream that springs fully formed from the earth's core. They seem to believe that they're entitled free access to this content, and that the "dinosaur" industry of "old media" is doomed to failure because of the overwhelming success of their brilliant new business insights (namely: people like getting stuff for free). In order to believe this myth, however, you need to completely disregard the fact that the rotting corpse of the "old media" is the fuel that keeps the new media going.
Someday soon we're going to reach the end-game: ad-blocking will become ubiquitous in browsers, and this long, strange nightmare of "free" content and "zero marginal costs" will have to yield to the simple reality that content costs money to produce. We've got to stop investing in the childish notion that we can all become bazillionaires by aggregating other people's hard work with a comment thread.
> We've got to stop investing in the childish notion that we can all become bazillionaires by aggregating other people's hard work with a comment thread.
I can't count the number of times that mainstream media has done this same thing. There are plenty of examples of Wikipedia circular references (i.e. Journalist reads unsubstantiated comment on a Wikipedia page, Published comment as truth (without citing Wikipedia, though sometimes with citation), Wikipedia cites the new article as proof of the original comment). What about those articles that are basically a reprinting of some corporate press release, which are passed off as journalism?
Do these things happen so frequently that you can use them to argue that journalism is merely an aggregator of content? I think you've got an uphill battle.
Someday soon we're going to reach the end-game: ad-blocking will become ubiquitous in browsers, and this long, strange nightmare of "free" content and "zero marginal costs" will have to yield to the simple reality that content costs money to produce.
Which doesn't actually address the problem of getting any significant number of people to willingly pay for it.
It's entirely possible that the end game will not be "oh well, time to pay for content again", but rather "remember the good old days, when content actually existed?"
Both of your views are, in my opinion, far too pessimistic, and not representative of the reality of the developing industry.
The fact is that there is content being generated online - and while the prevalence of linkblogs and content aggregates get all the, ahem, press, I suspect that they're not close to being a majority, or even all that significant a minority, of the various efforts currently made to evolve the business facet of news to fit the new digital paradigm.
As for the aforementioned ragtag band of hacker journalists needing to feed themselves at the end of the day, hell - even print media took decades, if not centuries, to settle on what is now a static and matured advertising structure and method. Do you really think a whole generation of newsfolks that've grown up completely immersed in the frenetically paced digital world /won't/ figure out a way to carve a profitable niche from it all?
The fact is that the factors that've kept newspapers relevant even as radio and televised news quickly outstripped them in influence and coverage don't hold up so well in the face of online news. Not when online news offers the exact same content for cheaper overhead for producers, advertisers /and/ audiences, and without the physical constraints of the standard tabloid sheet, quality of print, incompatibility with other media, or the untimeliness of once-daily release. It shouldn't at all come as a surprise that there'll be a few enterprising minds that'll seek to take advantage of these blatant advantages and exploit them for personal gain.
If you can trust people for anything, it's in finding a way to profit. And I fully trust my generation of journalists and editors to find a way. As ideological as it makes me sound, Capitalism really did get that bit right.
> If you can trust people for anything, it's in finding a way to profit. And I fully trust my generation of journalists and editors to find a way. As ideological as it makes me sound, Capitalism really did get that bit right.
It's important to note that this doesn't exclude the possibility that they all become corporate shills for one company or another. Not that I believe such a thing will happen, 'they will find a way to profit' doesn't always connect up with the more romanticized David-vs-Goliath imagery of 'hacker/journalist' rebelling against the mainstream media establishment.
Do you really think a whole generation of newsfolks that've grown up completely immersed in the frenetically paced digital world /won't/ figure out a way to carve a profitable niche from it all?
There already is such a model. If you look at Reuters for example, you can read the news delayed by 20 minutes at reuters.com for free, or you can pay and have it delivered in real-time to your Reuters terminal.
And now a story: Reuters in London had a big Jumbotron screen outside their headquarters. A crowd gathered there to hear whether London had gotten the 2012 Olympics. The people in the surrounding buildings were all traders and got the news and spread it to the crowd long before the Jumbotron updated. That was rather embarassing and a quick hack was done to allow marketing folks to override the delay if necessary...
Sometimes, industries do die, replaced by technology that enables the common man. It's a flawed assumption that there will always be full time professional reporters, it could just as well swing the other way. Real journalism is mostly dead on television already, it's mostly just new entertainment rather like professional wrestling.
Free isn't likely to go away, neither are bloggers, the future may well be mostly amateurs.
- People will do their own reporting on disasters, political upheavals, etc. In fact it can be nigh impossible to stop them, witness Iran.
- People comment and discuss for free. Hell, 99% of the traffic on the internet that isn't spam, piracy or porn is chitchat over opinions. Some people are even qualified to have an informed opinion. These can be aggregated.
- Investigative journalism costs, but it also sells (as books and magazines if not as newspapers)
- 99% of what ordinary reporters do every day is produce filler crap because you can't just print a blank paper with the headline "nothing happened". This is pumped out as news but it isn't news. It could vanish and it wouldn't be missed.
No, the argument is the difference in quality. Proper journos are better than just standard people, however how many "proper journos" do the papers employ anymore? Seems to me like a whole lot of em just look at Wikipedia and just regurgitate press releases which is no better than your average "joe public" reporter.
Put another way, he's leaving a gap that can be filled with very little overhead. What happens if big news corps refuse to be online? Someone else will be online. The latter will be read.
"""It is not, what’s more, merely that Murdoch objects to people reading his news for free online; it’s that he objects to—or seems truly puzzled by—what newspapers have become online. You get a dreadful harrumph when you talk to Murdoch about user-created content, or even simple linking to other sites. He doesn’t get it. He doesn’t buy it. He doesn’t want it.
Every conversation I’ve had with him about the new news, about the fundamental change in how people get their news—that users go through Google to find their news rather than to a specific paper—earned me a walleyed stare."""
The newspaper industry has gotten itself into an interesting predicament.
The reason nobody wants to pay for news online is that they are used to it being free, and that it is so easy to go to a competing newssite if one starts charging. But history shows that people are willing to pay for news - millions have done so for many years via subscriptions and newsstand sales. If all online newssources cost money I'm certain millions would start paying, I know I would. But if only a few started charging I would simply switch to a competing free source. If NY times started charging money I would switch to NY Post.
It's classical game theory - if everyone agrees to charge the industry will be much better off, but if there are a few defectors they will get all the eyeballs and marketshare.
If Murdoch wants to charge for the content, then they better remove barriers to consuming their content once I have paid:
1. PDF version of the newspaper (maybe?)
2. *FULL* article text in RSS feed body
3. Little to no advertising.
Emphasis on the second point. Obviously I would have to authenticate to gain access, but the whole point of the 'teaser' text in RSS feeds is to drive you back to the side for ad impressions. If I'm already a paying customer, then I shouldn't need to be 'driven' back to the site if I don't want to.
I'm still trying to work out if people buying newspapers was ever part of their core business model. I'm pretty sure they made a loss on sales but got the money back on advertising. If that is the case then they're just bug losers since advertising revenue has dive-bombed and created an unsustainable business.
It's easy to charge for high-quality national news. In America, there are basically three sources of this: The New York Times, The Washington Post, and the Wall Street Journal. If all three start charging for news that can only be found in those publications, they'll be fine. Cable news websites don't currently offer the same quality of news as those three do, and function more as of a competitor to USA Today.
Local news is where things get more complicated. Local newspapers have plenty of competition from TV station websites that suck, but probably don't suck enough to make people want to pay for news. Most papers have already stripped themselves so thin that they don't offer much more than aggregated bloggers and press releases could. In-depth journalism has been relegated to the alt-weeklies. I think there are several ways local newspapers could make more money online, but they seem more interested in laying off people to cut costs than figuring out how they're going to survive.
The elephant in the room is that the quality of 99% of journalism is so low that no one in their right mind would pay for it. Murdoch is a major purveyor of this rubbish.
Will I pay for warmed over wire service I can get in the original elsewhere? No. Would I pay for well researched investigative reporting? Maybe. But Murdoch would be changing his whole approach if he actually engaged in that.
The death of the daily newspaper doesn't have to mean the death of the printed newspaper. I quit the subscription to all my daily newspapers a while back, not because I thought they where bad, but because I simply didn't have time to read them every day and all that I really got out of it was huge piles of paper I had to carry to the recycling bin every week. I do however still subscribe to several weekly and monthly magazines and regularly buy the weekend edition of my favourite newspapers since on the weekend I have time to read. For day to day news I use the newspaper web sites, but when I have time to read long well researched articles I want to do it on paper and sitting in my favourite chair.
So that is the direction I think the newspapers should be taking. Stop trying to put out a paper every day, settle for one to three times a week. Keep your website updated with day to day happenings and time sensitive news and use your print media to write longer, more researched articles.
I've been suspicious of Murdoch's motivations in the past (vis a vis the particular bias of Fox News) but this for-pay initiative seems like a testable proposition.
If Murdoch can decide, one day, to charge for "news," and if this sentiment is echoed all over, and if it turns into implementation, then it will serve as yet another example of consolidated, command-and-control media. It's one thing to enable an "echo chamber" where dozens of media voices repeat what the others are saying, but changing the business structure of the medium itself will be another thing entirely.
Like some other commenters here, I would like to believe that the sheer numbers involved in the amateur news-generating population would cause Murdoch's strategy to be impossible... and yet, I've witnessed other "impossible" things seemingly happen according to Murdoch's will.
I think this article ultimately give devastating critique of that kind of thinking: ... the news business, supported for a hundred years by advertising, whose core skill has been selling advertising, believes it must right away, this second, re-create itself with a new business model where advertising is just the cream on top and where it’s the consumer who pays the true cost of newsgathering.
Print newspapers are the buggy whip industry of the 21st century. Look at the Seattle Post Intelligencer.
“Rupert Murdoch is going to battle against the Internet, bent on making readers actually pay for online newspaper journalism…” People were not willing to pay for their product printed on paper when it came loaded with tons of money saving coupons, I doubt very many people will take out a credit card and pay for it online on a regular basis.
I think the news industry has more than a content delivery mechanism problem here. I certainly won’t be buying any shares of their stock based on this new business model proposed by Mr. Murdoch, lol.
The problem with this strategy is, of course, that while News Corporation can certainly strongarm lesser corps into following their actions lock-step, it's notoriously harder to convince a ragtag band of hacker journalists with a wifi card, laptop and camcorder as their biggest overheads to follow suite - they've less to lose, and less for Murdoch to threaten. And even if you do, there's a few thousand others you have to coerce as well.
Murdoch's playing a rigged game of whac-a-mole.