I admire Murdoch for his business skills. He will sell what people will pay for. I don't think his inner circle goes in to discuss politics with him. He could care less about politics. This is very interesting on why the NYT is on the decline. I am confident that Murdoch, whose publications are on the decline also, will alter his ways to maximize revenue for his UK publications by changing them to provide more for the "prosumer". And if your response to this is going to be merely that he is a liar, then don't bother to response. I am posting this to generate some thought and exchange of views on how the publishing trends are changing in this day and age of the iPad.
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Murdoch has to become an elitist
By John Gapper
Published: May 27 2010 03:00 | Last updated: May 27 2010 03:00
By erecting a paywall around The Times and The Sunday Times online, Rupert Murdoch is once more shaking up Fleet Street and leading the way to what he hopes will be a more profitable existence. I doubt whether his heart is in it.
Mr Murdoch is clearly enthusiastic about his latest, quixotic newspaper war with The New York Times. He has added a Greater New York section to his Wall Street Journal to compete head on with the NYT and slashed advertising rates to undercut a liberal establishment institution that he despises.
That is the media baron we have known since he took control of The Times and The Sunday Times in 1981, pushed the titles downmarket and started a price war with the Daily Telegraph. Bigger headlines, shorter stories, more general news, less specialist information; that has always been the Murdoch formula, now on show at the Journal.
Radically reducing the readership, becoming more specialist and charging more for news than his rivals is not his style. Yet that is the logic of charging for online access to The Times and Sunday Times; having marched them downmarket, he must march them up again.
This is what his head should be telling him to do. Newspapers have found that chasing page views in the hope that advertising will save them is hopeless. Premium news and information providers either have to have another source of revenue - like the BBC, Bloomberg and Reuters - or a solid subscriber base.
The future of general online news is in doubt. But if any titles are to survive, they will have to be more like The Times Mr Murdoch bought in 1981 than the title he publishes today - more focused, deeper, with rarer data and information.
They will, in short, have to be elite - a quality that Mr Murdoch has always hated. The alternative is to keep rushing into a world of low-cost content aggregation and "curation", a fight that will be impossible to win against such low-cost upstarts such as The Huffington Post.
The Times made a start this week by launching a trial version of its new site , which looks calmer and more authoritative than the existing one . It will soon put it behind a severe paywall that will not even let Google index the articles. Readers will have to pay £2 a week, or £1 a day, to gain access.
If it does not work, things look bleak for The Times and rival Fleet Street titles such as The Guardian. Despite the happy talk from Alan Rusbridger, its editor, there is little sign of The Guardian being able to turn a profit solely from advertising to the 35m people who mostly skim its site each month.
Mr Murdoch's News Corp estimates that the marginal revenue from an occasional browser is less than one tenth of a penny a year. Even Group M, the media buying agency of WPP, the advertising group, argues in a research note that the bulk of news surfers are "useless tourists" who not only pay nothing but have little advertising potential.
"Free distribution of premium content is like eating your babies. You will give value away until you go bust," writes Group M. It suggests avoiding a "permanent oversupply of digital inventory" on the open web by using a paywall to "lift the publisher out of remnant inventory and restore a much smaller but aggregated audience."
The Times and The Sunday Times are right to try it - there is little alternative - but success depends on consumers finding sufficient value behind the wall. The irony is that Mr Murdoch has broadened the intended audience of his titles so heavily over the past three decades that it is not obvious they will.
The pre-Murdoch Times was, to employ today's jargon, a largely "vertical" publication. There were few crime, entertainment or general news stories, and a lot of specialist coverage of politics, Whitehall, the law, education, the City, and so forth. It was a working paper for the establishment elite.
Since then it has followed social trends in broadening its scope along with the rise in the number of people going to university. Although it is considering reinforcing specialist coverage areas such as international news, finance and sports online, its executives see no need for a broader U-turn in editorial strategy
That is optimistic. Business outlets such as the FT and the Journal have a big advantage in charging online because they are business-focused. If general publications are to match them, they must provide, as Stevie Spring, chief executive of Future Publishing, the magazine group, puts it, something "closer to must-have than nice-to-have".
By publishing more content, data and information for its professional readers - lawyers, accountants, civil servants and the like - The Times could make them feel more like members of a subscription club than vaguely interested passers-by. Having acquired this core of what Ms Spring calls "prosumers" [professional consumers] it could then focus on reinforcing their loyalty.
I can imagine the bored (at best) expression on Mr Murdoch's face if this strategy were put to him. He has never shown much interest in the professional end of the market, like Thomson Reuters, Reed Elsevier or Pearson, the FT's owner, and feels more affinity with Fox News, The Sun and the New York Post.
He does, however, know where the money is and there is precious little of it in commoditised online news, given the number of free providers. His heart may not be in it but his head must have figured it out. |
