Murdoch reiterates support for paid online content, plans to charge by mid-2010

Posted by Emma Heald on August 6, 2009 at 11:17 AM

Rupert Murdoch has reiterated his intention to charge online at all News Corp-owned newspapers in the near future. Speaking on a conference call with analysts about News Corp's earnings, he said that the goal is to start charging within the next financial year, ending in June 2010, reported paidContent's Staci Kramer.

News Corp reported a $3.4bn net loss in the last financial year to June. "Quality journalism is not cheap," the Guardian quoted Murdoch as saying. "The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news websites." He declared himself willing to take the risk to lead the industry in switching to a paid model, the Guardian reported, and said that he believes others will follow. PaidContent said that he suggested that WSJ.com will be a model for charging on the other news sites.

In the UK, the charging model would affect the Times, the Sunday Times, the Sun and the News of the World. Murdoch expressed his enthusiasm for capitalising on the popularity of the latter, reported the Guardian. It was recently confirmed that the Sunday Times will have a standalone website, and rumours have suggested that this could be used as a test case for charging online.

Murdoch also asserted News Corp's intentions to avidly protect its content from reuse: "We'll be asserting our copyright at every point." Fervour to protect copyright has been spreading amongst newspaper publishers.

The media mogul stressed his dissatisfaction with the terms of the deal with Amazon with regards to the Kindle, reported the Wall Street Journal. The issues are that Amazon controls access to subscribers, as well as keeping a large chunk of revenue from sales of newspaper subscriptions on the Kindle. Murdoch said that his company is discussing terms with Sony, which plans to release two new versions of its e-readers next month. According to paidContent, Murdoch said that so far, the deal with Sony looks more promising than that with Amazon.

Media commentator Jeff Jarvis believes that the main effect of Murdoch's papers charging online would be to clear the path for competitors. Some specialist papers can charge, he wrote in the Guardian, but "for most, pinning hopes for the survival of news on charging for it is not only futile but possibly suicidal." He stresses that charging online reduces a paper's audience and subsequently the advertising, and cuts content off from search and links. Jarvis is a firm believer in the 'link economy.' Thus, if traditional news sources start charging, they "open the door for free competitors, who can now enter the content business with virtually no barrier to entry."

Is Jarvis right? Or could charging online be the new revenue stream news papers have been waiting for? It is not just Murdoch who believes in paid content; the New York Times is looking at different ways to charge readers and MediaNews Group has announced that it too intends to create paid sections on its websites. And start-up Journalism Online is offering to make the process easier for those going down the paid content route. Many staunch opponents of the idea still exist, however, favouring focusing on increasing traffic and the value of advertising. Will the newspaper industry be able to find a more successful business model?

Source: Guardian, (2), PaidContent, Wall Street Journal