Stephen Logan

Is Rupert Murdoch Right to Charge for Online News?

7th Aug 2009 News, Industry News 2 minutes to read

The movement towards paying for your online news appears to be gathering pace. Rupert Murdoch appears to have completely ignored how content online is distributed and decided that it’s time for his News Corporation sites to start charging.

The assertion that quality, unique content is something worth paying for is not wholly incorrect. If reporters have spent a good deal of time and resources unearthing a news story that nobody else is covering, then there will be demand and you should expect to pay a fee. However, these cases are rare.

There have been no clear indications of how the charges are likely to be levied; but if it is going to be a widespread subscription fee, it’s hard to see where custom is likely to come from. After the Associated Press made the somewhat unpopular choice to start charging for quotes earlier in the week; it seems unlikely that News Corp would openly choose to follow in this direction.

So what is Mr. Murdoch thinking? Well, having announced £2 billion worth of losses, clearly the News Corp needs to start optimising some areas of the business that aren’t currently producing profit; most notably their printed press. But the media mogul has many pots on many fires; not least the plummeting social media site MySpace, which recently shed 400 staff as part of a cost-cutting measure.

Unfortunately though, as I stated in a post earlier this week, FT Editor Suggests Online News Should Come at a Price, you can’t hope to charge for news in a free market. It’s archaic thinking from an ageing media brand; not the forward thinking that is required in order to adapt to the changing environment.

The Guardian, who themselves are in a bit of a transitional period, have been going in the opposite direction. The release of their API application, features in ‘Changing Media Landscape: Is The Guardian’s API the Future for Newspapers?’, shows a clear understanding of where Internet news is heading,; complete with free distribution of data and stories for re-publishing online.

There are talks of The Guardian downsizing and even abandoning The Observer newspaper in order to survive the huge falls in newspaper sales and advertising incomes. However, this still has prompted them to charge for media.

Rupert Murdoch is missing the point of the Internet entirely. It’s not governed by the same codes and conventions of traditional media. We all know and expect that we have to pay television licences, satellite subscriptions and newspaper charges; but online, things are very different. There are premium services available everywhere, but they have to offer something original, not simply every day news that you can get from The BBC, The Guardian or anywhere else for that matter.

News Corporation’s claim that “If we’re successful, we’ll be followed by other media” might well be true, but it is a huge IF. A more practical ‘if’, is ‘if this fails, we get no subscribers, lose our online visitors, will advertisers still want to use our site?’ Find ways to monetise in these hard times, but not to the potential detriment of your business. The Internet is swarming with investment opportunities, charging for freely available information though is not one.

So what do you think, would this be a huge mistake from Murdoch? Let us know.

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