Thinking Allowed

A blog to detail my work at QU.

The Great Newspaper Debate

Posted By admin on November 16, 2009

When was the last time you paid for a newspaper? If you are like me, you cannot remember. I get most –if not all- of my news online. This is a growing trend, according to a 2008 Pew Research Center study. Now, Rupert Murdoch and News Corporation is moving towards a pay wall internet model which would make people pay to read news content. If News Corp is successful in making money, it will likely lead to more news organizations following this lead. In class we started a debate on whether this business model makes sense. Upon further thought, I am questioning whether this move is a necessity to save the print media or whether greed is the motivating factor.

Murdoch spoke with Sky News Australia about news on the web and how they intend to block Google’s ability to search their content once their pay walls were in place. “They shouldn’t have had it free all the time. I think we have been asleep,” Murdoch said in the interview.

Some bloggers support Murdoch’s efforts, like Lore Sjoberg in his Underwire blog.  Sjoberg says this will attract a younger audience. “Murdoch, that crazy mad genius, realizes that the only way to attract this lucrative demographic is to establish street cred. He’s going underground, reinventing news as an exclusive club that you can’t find just by entering a search term,” Sjoberg wrote.

The Google Connection

In an article in the Business Insider, News Corp.’s Chief Digital Officer, Jon Miller, says, “The traffic which comes in from Google brings a consumer who more often than not read one article and then leaves the site. That is the least valuable of traffic to us… the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it.”

In the Sky News interview Murdoch said,”The fact is there is not enough advertising in the world to go around and make all websites profitable. We would rather have fewer people come to our website, but paying.”

Matthew Ingram explains in a Seeking Alpha blog the possible motivation behind News Corp’s move saying,”In a nutshell, the idea is that Rupert cuts a deal with either Microsoft (MSFT) or Yahoo (YHOO) to index his sites (similar to the deal he cut with Google to index MySpace), and hopes that this encourages other major media outlets to do the same. If he can get enough to jump on board — and it sounds like Associated Press is halfway there already — the thinking is he could put pressure on Google to pay up as well.”

Michael Arrington in TechCrunch looks at “How Murdoch Can Really Hurt Google and Shift the Balance of Power in Search,” saying that “he might as well do it the right way and drive the fear of God into Google.”

Some say that blocking Google is “not the future of the web”. An article on adage.com, “Why News Corp. and Murdoch Won’t Quit Google”, says that this move “… would also make News Corp. sites more like print in the bad way. Readers who don’t know about a Journal story on their area of interest would become less likely to find out about The Journal’s value.”

This article also does a little advertising calculating. “According to Compete, the big three search engines drove about 21.9 million page views to WSJ.com in October. Revenue per thousand pages is likely around $24, given the WSJ.com’s high ad rates and number of ads per page. That means about $525,000 in October; assuming October is representative of a typical month, that’s about $6.3 million a year. Even if revenue per thousand pages runs much lower, say $10, that’s still almost $3 million a year.”

“Everyone can afford a newspaper. They’re the cheapest things in the world. Think what you get out of it.  It’s fabulous.  It will be even cheaper when you get it electronically,” Murdoch said in the Sky News interview.

The question remains to be seen, are people willing to pay – even nominally – for news which used to be available for free over the internet or is Murdoch really targeting the deep pockets of the companies who power the largest search engines? Is this move about sustaining News Corp. entities, or is it about making some big bucks on the internet?

As stated on Sky News, Murdoch said,”There are no websites – news websites or blog websites- anywhere in the world that are making any serious money. Some may break even or make a couple million.”


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One Response to “The Great Newspaper Debate”

  1. admin says:

    Studies are being done about whether people would pay for online content.

    Here are two articles which detail such studies.

    “About Half in U.S. Would Pay for Online News, Study Finds ” http://www.nytimes.com/2009/11/16/business/media/16paywall.html

    and:

    “80% of US Consumers Won’t Pay For Online Content” http://www.readwriteweb.com/archives/80_of_us_consumers_wont_pay_for_online_content.php