Wondering Out Loud

Rupert Murdoch says “Pay up”

I tweeted about this earlier today and I think it deserves a blog post.

Rupert Murdoch – media mogul to the extreme – announced a plan to charge for all on line content. I asked in my tweet is he gutsy or nutsy. The pay for play train of web-based news has long left the station and Murdoch plans to hit the breaks and throw it in reverse. The man hasn’t gotten where he is by not taking risks, but this is going way out on a limb.

Imagine how different things would be if traditional media had embraced the Internet from the outset. They could have charged for content from the start, but their late entry – out of arrogance, ignorance, or some combination of the two – rendered paid subscriptions all but impossible. The Wall Street Journal is an obvious exception, but it is also a dramatically different publication. And so here we are with News Corppreparing to remake the model by adding a field for your credit card at the entry gate to the rest of its on line publications.

How this will play out is not known, but here are a few possibilities:

1. Ka-Boom.Murdoch’s plan blows up in his face with nobody – but family and friends – paying the bucks to see his content. It probably won’t take long for a complete failure to become apparent. When the gates go up and registrations don’t materialize he will see the folly in his plan and abandon it.

2.Cha-Ching. Murdoch becomes a multi-multi-billionaire when paying customers appear in huge numbers and, because of this success, he is able to raise the ad rates.

3. So-So. There is money coming in, but some sites are performing better than others so Murdoch offers bundles, twofers and other promotions to keep his plan alive.

4. Bandwagon. Like an airline raising and lowering rates, it doesn’t take long for the competition to follow suit. I just might happen that other news outlets join Murdoch and begin charging for their content. It would take a coordinated effort to make it fly, but think about the pressure it would put on consumers when their access to free news and information goes away.

At this early stage – without knowing what Murdoch’s model looks like – my money is on So-So. If he really wants to build a paid subscription base, Murdoch will have to go beyond the news and offer value added content that people are willing to pay for. Weekly live chats with news makers and anchors might be one that people are willing to pay for.

Whatever the outcome, Murdoch is forcing the hand of both the industry and the market and the result will likely set the model for web-based delivery of news and information for the foreseeable future.


August 6, 2009 Posted by | Journalism | , , , , , | Leave a comment


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