Article

A Murdochian gamble

By Editor on December 17, 2009 1:02 pm

Can Murdoch make online news pay? Angelica Jopson takes stock.

RUPERT MURDOCH’S DECISION to charge users to access online news across his publications is his answer to the steep decline in advertising revenue this year. While it is appealing to try to turn millions of news surfers into paying customers, how realistic is that move?
 
“It is a huge gamble,” said Stephen Jukes, former global head of news at Reuters. “If he fails, surely there will be more blood on the wall.”
 
Jukes, who is the Dean of Media School at Bournemouth University, draws a distinction between what he calls ‘news’ and ‘news’. The first is an everyday commodity, the second a value-added, exclusive product.
 
Jukes believes it is possible to charge for the value-added variety, where the reader gets more. But if it goes wrong, users would avoid clicking through to ordinary news items, and Murdoch would end up with less revenue to pay for the ‘quality journalism’ his plan aims to ensure.

Journalist-turned-academic Liisa Rohumaa is of a similar opinion. A former deputy editor at FT.com, Rohumaa has seen a monetised system work. FT.com runs a three-tier access system, the top of which is a premium-level service for £199 a year, but she doesn’t believe this business model would work for websites that do not cater to niche markets. “It’s a question of who would be prepared to pay,” she said.
 
While a financial analyst may pay for the information that FT.com provides, Rohumaa cannot see consumers approaching The Sun‘s celebrity gossip or The Times‘s general news with the same attitude. Daily news can be accessed from a plethora of sources, including citizen reports and blogs. Convincing consumers they should pay to read what they may read for free elsewhere is unrealistic.

“I think our audience are starting to realise that information isn’t just in the hands of the elite,” Rohumaa said.

Jeff Jarvis, author of What Would Google Do? and journalism professor at the City University of New York, thinks the decision is more than impractical. “Pinning hopes for the survival of news on charging for it,” he wrote in The Guardian, “is not only futile but possibly suicidal.”
 
By cutting content off from what he calls ‘google juice’ – the searches and links which draw users and advertisers in – publishers will not only alienate themselves from the real value of the web, they may even make less money. The escaping genie, he believes, should have been bottled up long ago.
 
Rohumaa’s thoughts exactly. The first internet browser was launched 15 years ago and newspapers have had that long to monetise their online content. “There was a chance to cash in,” Rohumaa said, “but the industry failed to see that and I can’t see it working now.”
 
Murdoch is pushing forward, though. He has announced he is looking at ways to block search engines from his content. He thinks Google and others have been acting as “parasites” and it’s time they stopped. 

Google’s response to Murdoch is this: if you don’t want to be on our search index, tell us, and we will remove you. A Google spokesman pointed out that Google News and web searches promote news organisations and bring users to their site – but only if they wanted it.
 
Professor Stuart Allan, author of Online News: Journalism and the Internet, believes the precarious relationship between news organisations and the search engine has been underestimated. He thinks charging users for news content may cause a two-tier effect across the Internet, dividing those who can pay and those who can’t.

“Such a divide would be a great shame,” he said, especially as the net is based on an ideal of access for all. While he is unsure how Murdoch’s plans will play out, he does believe any plans to charge for online news items will have a “chilling effect on the industry”.

A survey conducted by Lightspeed Research shows 91 per cent of people were unwilling to pay for news. In the same survey, five per cent said they might pay for a single news items. Only four per cent would consider a longer term subscription.
 
Vivian Schiller can relate to these figures. Schiller was head of nytimes.com when it charged for content and then stopped two years later. She thinks asking users to pay for online news is ‘mass delusion’. And yet the current executive editor of nytimes.com, Bill Keller, has announced he expects a decision to be reached soon about whether or not the website will charge for content… again.
 
The issue, it seems, stretches further than one of should or can. For news organisations losing money daily it may be a case of must. Somehow.
 
Tom Hill, journalism trainer and founder of Up to Speed Journalism, believes it is vital for the news industry to make profit and that the online product can in fact contribute to the bottom line. One of the factors to consider, he says, is the behaviour of consumers. For every rational consumer there are millions of irrational ones; imagining that they are all discerning just will not do.
 
The presentation of the online content and the way in which payment is taken are crucial. If a pay-per-view approach could be integrated with an iTunes account or something similar, users may be more willing to cross the pay wall for unique content. It needs to be what Hill describes as an ‘invisible expense’.
 
One effect of this pay-per-view model, commodifying single pieces of news, is that it will clearly show what stories users value. “Journalists are going to have to earn their spurs if they are to produce content that people are going to pay for,” Hill said.
 
While newspapers need more money, and fast, Rohumaa believes Murdoch is looking for it in the wrong place. “We shouldn’t look to online as the saviour of everything else,” she said. She believes there are other ways to recover revenue and that the search for a business model that builds truly convergent multimedia empires is the way forward.
 
Murdoch is yet to announce how exactly he plans to change the ‘malfunctioning business model’ of the web, though he has said his publications – among others, The Sun, The Times and News of the World in UK – will begin charging for content by next summer. While what that move means for the industry remains to be seen, many media observers are of the view that something must change.
 
“We will only survive if we reinvent ourselves,” Rohumaa said.

Angelica Jopson is a UK-based journalist. She can be reached at angelica.mediamind@googlemail.com

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Professor Allen Tullos

Emory University


Professor Barry Richards

Bournemouth University


Bertrand Pecquerie

World Editors Forum


C Rammanohar Reddy

Economic and Political Weekly


Kelly Toughill

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Professor Steve Jones

University of Illinois-Chicago


Stephen Jukes

Bournemouth University


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Hebrew University of Jerusalem









 
 
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