Is Murdoch’s Move to Paid News Content the End or the Beginning?

Tuesday, 10. 13. 2009  –  Category: T2 Communications

Last week, at the World Media Summit in China, News Corp. Owner and Chairman Rupert Murdoch discussed his plans to make news content available only to paying subscribers.  While pay for content is out there on many news sites, the idea of one of the world’s top media moguls taking the hard line stance with his key assets is a new one.  As reporter Michael Wolff mentions in his commentary on Murdoch’s ambitious gamble in this month’s Vanity Fair, however, the results of these pay contents have been mixed.  While there is a portion of the population that will pay for the content, a vast majority simply move on to another source when prompted for payment.

As many news sources struggle to keep up with the factors that made online options popular—speed, integration of video and print, price, targeted content—the idea of an additional revenue stream is certainly tantalizing.  But will Murdoch’s move be a boon for media sources everywhere?  Or is his plan the last nail in the coffin of a no longer relevant business model?

Haven’t We Been Here Before?
On initial glance, Murdoch’s thinking is both compelling and familiar.  Much like the transition of music into the digital age, news content is in the equivalent of a “wild west” stage.  As was the case with Napster back in the early 2000s, Murdoch believes it is time to bring people to their senses and restore order in the media industry.

Unlike the bootleggers that caused Napster’s demise, however, it was content owners that provided authorized access to their content online.  While there are (often print) ways to pay for content and support your favorite online news sources, many don’t see the need for this support.  Instead, they are trading in their print subscriptions for free online ones.  And who can blame them?  Not only did the content providers give it away online, but they often provided additional content to entice people to visit—all without asking for a commitment from the viewer.

Collaboration and Consolidation
The advent of online media sources, combined with the recent economic downturn, has brought about much needed collaboration and consolidation between previously separate print, television and radio news sources.  Reporters once only trained in writing are now brushing up on their on-air skills, and vice versa.  The result?  Larger exposure for both the reporters and their company’s brands.

The problem with Murdoch’s logic is that his model seems to silo off the online media from his other sources.  Instead of using it to bring cohesion to his many reputable brands, he seems more interested in segmenting off his content.

Monetary Value of Reputable Sources
As I discussed in my previous column, there will continue to be a need for credible sources in the news world.  The question is to what extent people are willing to pay for that credibility.  In his comments surrounding the new model, Murdoch has referenced the cable television industry as an example of consumers paying for a product they once got for free.  In his logic, however, Murdoch fails to mention that the content in question is not public information.  Unlike news stories, which any news source (or any person thanks to things like Twitter) can break, cable television provided largely offers proprietary content that viewers cannot find anywhere else.

For the pay model to work, news sources have to provide content that no one else will.  One may argue that the personalities involved are that unique piece.  However, in an age of endless talking heads, asking for payment tests just how loyal followers are.  And unfortunately, some media outlets might not want to know the answer.

David Fleming is the Director of Corporate Communications for T² Communications, a CornerWorld company.

Tags: David Fleming, digital, Front Page Leases, media, Napster, News Corp, online, paid content, Rupert Murdoch, Twitter, World Media Summit