International BusinessTaking the plunge
Murdoch - pay content: Rupert Murdoch’s promise to end the great news free-for-all is bold but risky. The media mogul is vowing to do at News Corporation what most of his rivals dream of — charge for access to all online news content. The flagging industry has seen profits disappear with the rise of the internet, a trend accelerated by the recession, and needs a powerful player to move first. But even Murdoch will find this endeavour tricky.
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The trumpeted move is somewhat of a u-turn for Murdoch, who has over the years publicly mused on various business models for news content. Shortly after buying Dow Jones at the top of cycle in 2007 he mulled scrapping subscription charges for wsj.com, one of the few news sites to charge, to pursue an advertising-funded model. But he quickly abandoned that idea. Now the severe economic downturn, which has hammered advertising revenue, has pushed him to embrace a subscription model more generally throughout his newspapers.
Few have so far succeeded in charging for online news content. The greatest success has been in financial journalism where FT.com and Breakingviews.com have subscription models, as does wsj.com. But even these have had their challenges. Outside the financial arena, it will be still harder to persuade online readers to part with their cash. The only chance is if publications can produce really high-quality distinctive content — and funding that is getting trickier as they slash their editorial budgets.
Murdoch, to be fair, is determined to keep investing in journalism, so that may give his titles an edge. But he still has to work out the precise business model — for example, whether to charge for a subscription or for individual articles. And even if he figures out these issues, the rest of the industry may not follow. While some rival newspapers are dying to introduce online charging, others might see staying free as an opportunity to scoop up market share. And even if these traditional competitors follow suit, plenty of readers will be happy to turn to free sites of broadcasters like the BBC and CNN for their quick fix of daily headlines.