WASHINGTON - After months of top secret development, Rupert Murdoch's News Corp. appears poised to take the wraps off a digital newspaper for the iPad called "The Daily."
News Corp. has been tight-lipped about the project but the Australian-born media mogul acknowledged its existence for the first time in an interview last week with his Fox Business Network.
Asked what "exciting projects" his sprawling media and entertainment company was working on, the 79-year-old Murdoch cited The Daily but offered no further information about the tabloid for Apple's touchscreen tablet computer.
Details about the project have been dribbling out in the US media for weeks, however, and The New York Times, citing two employees who requested anonymity, said News Corp. intends to launch The Daily before the end of the year.
The Times said Sasha Frere-Jones, music critic at The New Yorker magazine, would become its culture editor. Others reported to be involved include Jesse Angelo, executive editor of Murdoch's New York Post, Richard Johnson, former editor of the Post's gossip page, and Greg Clayman, the former head of Viacom's digital division, who has been tapped to head business operations at The Daily.
Forbes magazine put the total staff on the project at around 150 and said News Corp. has budgeted 30 million dollars for the first year of the launch.
The Daily brings together three of Murdoch's passions -- newspapers, the iPad and finding a way to charge readers for content online in an era of shrinking newspaper circulation and eroding print advertising revenue.
Murdoch began his career with a single newspaper in his native Australia and while he has expanded into television, movies and book publishing, the News Corp. chairman has always been clear that newspapers are his obsession.
At the same time, Murdoch has a serious crush on the iPad, calling it a "game-changer" and potential saviour of the struggling newspaper industry.
In an interview in April with The Kalb Report, Murdoch called the iPad a "glimpse of the future."
"There's going to be tens of millions of these things sold all over the world," he said. "It may be the saving of newspapers because you don't have the costs of paper, ink, printing, trucks.
"I'm old, I like the tactile experience of the newspaper," Murdoch admitted, but "if you have less newspapers and more of these that's OK."
"It doesn't destroy the traditional newspaper, it just comes in a different form," he said.
Whether Murdoch plans to charge readers a subscription fee for The Daily is not yet known but the News Corp. chief has made making consumers pay for news online his personal crusade.
The Wall Street Journal requires a subscription for full access to WSJ.com and Britain's The Times and The Sunday Times, two other News Corp. newspapers, recently erected pay walls around their websites.
Murdoch has vowed to begin charging for online access to all of his titles and said in August that he believed most US newspapers would eventually end up doing the same.
"You'll find, I think, most newspapers in this country are going to be putting up a pay wall," he said, dismissing arguments that readers used to getting news on the Internet for free would be reluctant to pay.
News Corp. chief digital officer Jon Miller told top technology and media executives at a gathering in Aspen, Colorado, in July that the iPad may allow the news industry to start charging for content online after years of giving it away for free.
"I think we're seeing a fundamental shift in where content is consumed and it's on to these kinds of devices," he said. "These tablets are heavy media consumption devices, much more than the Web by itself and even smartphones."
He said the iPad and other tablets being developed offer "very media rich experiences that I think do allow a re-set, perhaps a do-over for the media industry, a chance to get it right."
Source: AFP
Showing posts with label Murdoch. Show all posts
Showing posts with label Murdoch. Show all posts
Sunday, November 21, 2010
Wednesday, September 16, 2009
Murdoch on newspapers (and other things)
News Corp Chief Executive showed up for his latest interview on the Fox Business Network (which he owns) on Monday. Here is a transcript of some of his remarks. He covered a lot of ground, from tonight’s union concession vote at The Boston Globe to the future of newspapers and the inclusion of software on computers sold in China that will block access to certain websites. We are providing excerpts — we trimmed for length, most notably excising his comments on healthcare and taxes (We know it’s the Internet, but we had to shorten it up a bit. You can see or read the whole thing here.
On FOX Interactive possibly looking at job cuts:
“It’s too early to talk about job cuts. … We’ve put new management in there, they’ve been there three weeks and they’re making a close examination of it and they’ll no doubt set some new directions, strengthen other very strong parts of it, and you know, the advertising is at least double what Facebook has and it’s in pretty good shape. But there will be, I’m sure, changes with the new management.”
On Chase Carey assuming the titles of deputy chairman, president and chief operating officer July 1:
“No, we’re not making any commitments on that [being an heir apparent] at all. Chase is coming in to be my partner and right-hand, he was with us for 17 years before. I think he’s like coming home.”
On the upcoming vote for The Boston Globe:
“You know, Boston is a very highly unionized place and they may find that difficult but it’s a great newspaper and a great institution, the Boston Globe, and I can’t see it disappearing. Like all newspapers, I think it will change. We think of newspapers in the old-fashioned way, printed on crushed wood so to speak, with ink. It’s going to be digital. Within 10 years I believe nearly all newspapers will be delivered to you digitally either on your PC or on a development of the Kindle, shall we say…something that’s quite mobile and you can take around with you.”
On the future of newspapers and print media:
“Communications are changing totally and we’re moving into the digital age and it’s going to change newspapers. But if you’ve got a newspaper with a great name and a great reputation and you trust it, the people in that community are going to need access to your source of news. What we call newspapers today, I call ‘news organizations,’ journalistic enterprises, if you will. They’re the source of news. And people will reach it if it’s done well, whether they do it on a Blackberry or Kindle or a PC.”
“I can see the day maybe 20 years away where you don’t actually have paper and ink and printing presses. I think it will take a long time and I think it’s a generational thing that is happening. But there’s no doubt that younger people are not picking up the traditional newspapers.”
On China requiring PC makers to include censorship software:
“I’m not worried because we don’t do any business there, or so little that it doesn’t matter. Foreign media is not generally welcomed there. There are opportunities to have 5% of this or invest in new things that are happening there. But you cannot go in and say, start a newspaper or television or whatever. We have a little television channel we make in Shanghai which is allowed to go on cable networks in the Southeast to a fairly limited audience. We have a license for MySpace there and that will grow and be a very good site.”
On whether PC makers should go along with China’s requirements:
“They would have no option. It’s either those PCs or no PCs at all. You can’t expect great companies like Dell or HP to say we’re going to sell no computers in China at all. It’s too big, it’s too big a part of the world.”
On the recovery of the U.S. economy:
“We’re in very early days yet. Wait until unemployment goes to 10, 11%…and it will…Unemployment is going to go up. It’s going to take some time to get down. Perhaps three years to get it back. We probably and hopefully have hit a bottom here, where things will be pretty stable from now on, not nearly as good as they were a little while back, but it’s going to take time to climb out of it and so that’s okay. As far as we’re concerned, we know we can grow. We have a lot of things happening like new cable channels, we’re having a great few months now in our film company so you know we’re in pretty good shape.”
Source: reuters.com
On FOX Interactive possibly looking at job cuts:
“It’s too early to talk about job cuts. … We’ve put new management in there, they’ve been there three weeks and they’re making a close examination of it and they’ll no doubt set some new directions, strengthen other very strong parts of it, and you know, the advertising is at least double what Facebook has and it’s in pretty good shape. But there will be, I’m sure, changes with the new management.”
On Chase Carey assuming the titles of deputy chairman, president and chief operating officer July 1:
“No, we’re not making any commitments on that [being an heir apparent] at all. Chase is coming in to be my partner and right-hand, he was with us for 17 years before. I think he’s like coming home.”
On the upcoming vote for The Boston Globe:
“You know, Boston is a very highly unionized place and they may find that difficult but it’s a great newspaper and a great institution, the Boston Globe, and I can’t see it disappearing. Like all newspapers, I think it will change. We think of newspapers in the old-fashioned way, printed on crushed wood so to speak, with ink. It’s going to be digital. Within 10 years I believe nearly all newspapers will be delivered to you digitally either on your PC or on a development of the Kindle, shall we say…something that’s quite mobile and you can take around with you.”
On the future of newspapers and print media:
“Communications are changing totally and we’re moving into the digital age and it’s going to change newspapers. But if you’ve got a newspaper with a great name and a great reputation and you trust it, the people in that community are going to need access to your source of news. What we call newspapers today, I call ‘news organizations,’ journalistic enterprises, if you will. They’re the source of news. And people will reach it if it’s done well, whether they do it on a Blackberry or Kindle or a PC.”
“I can see the day maybe 20 years away where you don’t actually have paper and ink and printing presses. I think it will take a long time and I think it’s a generational thing that is happening. But there’s no doubt that younger people are not picking up the traditional newspapers.”
On China requiring PC makers to include censorship software:
“I’m not worried because we don’t do any business there, or so little that it doesn’t matter. Foreign media is not generally welcomed there. There are opportunities to have 5% of this or invest in new things that are happening there. But you cannot go in and say, start a newspaper or television or whatever. We have a little television channel we make in Shanghai which is allowed to go on cable networks in the Southeast to a fairly limited audience. We have a license for MySpace there and that will grow and be a very good site.”
On whether PC makers should go along with China’s requirements:
“They would have no option. It’s either those PCs or no PCs at all. You can’t expect great companies like Dell or HP to say we’re going to sell no computers in China at all. It’s too big, it’s too big a part of the world.”
On the recovery of the U.S. economy:
“We’re in very early days yet. Wait until unemployment goes to 10, 11%…and it will…Unemployment is going to go up. It’s going to take some time to get down. Perhaps three years to get it back. We probably and hopefully have hit a bottom here, where things will be pretty stable from now on, not nearly as good as they were a little while back, but it’s going to take time to climb out of it and so that’s okay. As far as we’re concerned, we know we can grow. We have a lot of things happening like new cable channels, we’re having a great few months now in our film company so you know we’re in pretty good shape.”
Source: reuters.com
Wednesday, September 9, 2009
Saving journalism, a farthing at a time
Newspapers are struggling to make ends meet online. The answer is not to give content away but to sell it – for peanuts
Ever since Rupert Murdoch announced plans to put his digital titles behind a paywall, claiming the "free" web was dead, the rest of the media have either pooh-poohed his proposals, or nervously wondered if they should do likewise.
A great deal of online content is profitably charged for – notably music and porn – but news struggles. With the exception of some high-value material from publications like the Wall Street Journal, news doesn't seem able to turn a buck. Experiments in charging have largely failed – and the advertising-subsidised model has reigned supreme.
However, with recession, advertising revenues, always marginal at best, have dried up. Publishers are in a nightmarish situation; they know the print side of their business is struggling, they know punters want their news online, but they can't see how to make it pay. In desperation others may follow Murdoch's retreat behind the paywall. Not good news for news addicts. It isn't so much the money, it's the usernames, passwords, subscriptions ... Actually, it is the money. But publishers need a profit. Information might want to be free – but food and housing isn't. So is there another way? Some model that brings in more than advertising, but doesn't exclude casual visitors, either by cost or inconvenience? Well yes – an idea that won't go away: micropayments.
The basic concept of micropayments is that you charge at a price that doesn't deter consumers at all, but will aggregate enough profit, via mass sales, to sustain a business. Classical micropayment theory (yes, there is a classical and neo theory – probably a superstring version too) states that payments should be of the order of 1/1000 of a US cent. A cent would be the minimum now. Fans claim this is beneath the mental threshold at which resistance to a purchase sets in. Critics divide into two camps – those who feel it's a dumb idea, and those who feel it's evil. Dumb because similar schemes have failed in the past. Evil because it swipes your money under the radar, and an effective scheme could easily expand to diminish the entire web by fencing off vast quantities of content. The dumb argument can be countered – we can implement a scheme today that beats previous implementations hands down – I'll explain how in a moment. I pretty much accept the evil argument, but it's the lesser of several evils – the main one being that journalism goes down the pan unless we find a way to fund mainstream media online.
So, how could it work? Step forward Google. Many of you will be familiar with Google Ads – perhaps not with how the system works. Basically, you sign up, create a bundle of code using their site tools, wrap it into your own pages and presto, ads appear, and when your visitors click on those ads, you get paid. Not immediately. Payments – tiny payments – are tracked and added up. To reduce payment transaction costs, you're paid one sum, once a month. The code has unique identifiers, the code is smart enough to tell Google to look at your pages, providing content-targeted ads. The database in the background keeps track. You just watch the money roll in. The transfer potential of this technology to a micropayments scenario is clear: individuals would sign up with Google, deposit funds. They'd have a unique ID attached to them at that point – an encrypted cookie stored on whichever PC they happen to log in with. When they visit a site with GoogleDosh embedded they're allowed in, a fraction of a penny is switched to the content provider's account for every item they read – if visitors aren't GoogleDosh members, they're re-routed, perhaps, to a précis, or a sign-up form, or even to a limited trial. The key difference from other micropayment schemes is scale – and that's what beats individual site subscriptions too – sign up with one scheme, and you get access to thousands of sites. That's my theory, at least. It's technically simple – an easy step if publishers accept a single standard, and the success of Google Ads suggests they will. Publishers win, consumers win long-term by supporting content providers, and in the short term, if good sense among sellers prevails, they get a bargain: spending pennies a day for all the content they need. Not just news of course – anything could be paid for in the same way.
Googlephobics will no doubt hold their hands up in horror. Tough. This needs a big player – there are two: Google and Microsoft. Of the two, Google already has the infrastructure and the reputation for managing situations like this. Not only that, but they're touted as news content's No 1 enemy, via GoogleNews. They "owe" the press one. Yes, there are issues. Privacy. Exclusion, perhaps. And further entrenching a near-monopoly position. But these can be countered, technically and economically – and nothing stops parallel schemes running, once the concept is established. The fact is that in the boom years micropayments looked like a lot of fuss, and a leap into the unknown. I get the impression publishers' pride got in the way of being asked to sell for pennies. But now the boom is over, micropayments aren't an option – they may be the only way forward.
Source: Guardian.co.uk
Ever since Rupert Murdoch announced plans to put his digital titles behind a paywall, claiming the "free" web was dead, the rest of the media have either pooh-poohed his proposals, or nervously wondered if they should do likewise.
A great deal of online content is profitably charged for – notably music and porn – but news struggles. With the exception of some high-value material from publications like the Wall Street Journal, news doesn't seem able to turn a buck. Experiments in charging have largely failed – and the advertising-subsidised model has reigned supreme.
However, with recession, advertising revenues, always marginal at best, have dried up. Publishers are in a nightmarish situation; they know the print side of their business is struggling, they know punters want their news online, but they can't see how to make it pay. In desperation others may follow Murdoch's retreat behind the paywall. Not good news for news addicts. It isn't so much the money, it's the usernames, passwords, subscriptions ... Actually, it is the money. But publishers need a profit. Information might want to be free – but food and housing isn't. So is there another way? Some model that brings in more than advertising, but doesn't exclude casual visitors, either by cost or inconvenience? Well yes – an idea that won't go away: micropayments.
The basic concept of micropayments is that you charge at a price that doesn't deter consumers at all, but will aggregate enough profit, via mass sales, to sustain a business. Classical micropayment theory (yes, there is a classical and neo theory – probably a superstring version too) states that payments should be of the order of 1/1000 of a US cent. A cent would be the minimum now. Fans claim this is beneath the mental threshold at which resistance to a purchase sets in. Critics divide into two camps – those who feel it's a dumb idea, and those who feel it's evil. Dumb because similar schemes have failed in the past. Evil because it swipes your money under the radar, and an effective scheme could easily expand to diminish the entire web by fencing off vast quantities of content. The dumb argument can be countered – we can implement a scheme today that beats previous implementations hands down – I'll explain how in a moment. I pretty much accept the evil argument, but it's the lesser of several evils – the main one being that journalism goes down the pan unless we find a way to fund mainstream media online.
So, how could it work? Step forward Google. Many of you will be familiar with Google Ads – perhaps not with how the system works. Basically, you sign up, create a bundle of code using their site tools, wrap it into your own pages and presto, ads appear, and when your visitors click on those ads, you get paid. Not immediately. Payments – tiny payments – are tracked and added up. To reduce payment transaction costs, you're paid one sum, once a month. The code has unique identifiers, the code is smart enough to tell Google to look at your pages, providing content-targeted ads. The database in the background keeps track. You just watch the money roll in. The transfer potential of this technology to a micropayments scenario is clear: individuals would sign up with Google, deposit funds. They'd have a unique ID attached to them at that point – an encrypted cookie stored on whichever PC they happen to log in with. When they visit a site with GoogleDosh embedded they're allowed in, a fraction of a penny is switched to the content provider's account for every item they read – if visitors aren't GoogleDosh members, they're re-routed, perhaps, to a précis, or a sign-up form, or even to a limited trial. The key difference from other micropayment schemes is scale – and that's what beats individual site subscriptions too – sign up with one scheme, and you get access to thousands of sites. That's my theory, at least. It's technically simple – an easy step if publishers accept a single standard, and the success of Google Ads suggests they will. Publishers win, consumers win long-term by supporting content providers, and in the short term, if good sense among sellers prevails, they get a bargain: spending pennies a day for all the content they need. Not just news of course – anything could be paid for in the same way.
Googlephobics will no doubt hold their hands up in horror. Tough. This needs a big player – there are two: Google and Microsoft. Of the two, Google already has the infrastructure and the reputation for managing situations like this. Not only that, but they're touted as news content's No 1 enemy, via GoogleNews. They "owe" the press one. Yes, there are issues. Privacy. Exclusion, perhaps. And further entrenching a near-monopoly position. But these can be countered, technically and economically – and nothing stops parallel schemes running, once the concept is established. The fact is that in the boom years micropayments looked like a lot of fuss, and a leap into the unknown. I get the impression publishers' pride got in the way of being asked to sell for pennies. But now the boom is over, micropayments aren't an option – they may be the only way forward.
Source: Guardian.co.uk
Thursday, May 14, 2009
Leading the charge
WHEN Rupert Murdoch indicates a shift in strategy, the rest of the media industry takes notice. So the News Corp boss's clear signal last week that his newspapers, such as the Sun and the Times, could start charging for online access over the next year gave fresh momentum to a debate that is dominating internal newspaper discussions.
"The inchoate days of the internet will soon be over," Murdoch pronounced, citing an "epochal" debate in the industry. Having flirted with the idea of turning the Wall Street Journal website free before realising he had bought one of the world's few newspaper sites that makes money, Murdoch has come down in favour of online charging.
For a long time many journalists have been bemused and frustrated that their work merits a price in one medium but is given away free in another. Carolyn McCall, the chief executive of Guardian Media Group which publishes MediaGuardian, believes publishers need to think about where they might be able to charge in the future. "There's no review of the charging model, there's no formal kind of agreement that we should be charging at all, but it would be wrong not to think about what we would do in the future," she says.
Charging for business-to-business content, however, is a "no-brainer", says McCall, who led GMG's acquisition of Emap's B2B operation on the strength of its capacity to generate digital revenues. The model supporting so-called business-to-professional sites, such as MediaGuardian.co.uk, is "something we need to keep revisiting". But, in general news, the presence of the BBC makes charging impossible: "You basically have a fully funded and publicly funded news organisation on your doorstep. How can you compete with that?"
The BBC is what makes all newspaper executives think twice when it comes to making the internet pay. It has played its part in creating the notion that news should be free, which stands as a barrier to introducing any element of pay to newspaper websites.
Until now, the most important aim for newspapers has been to grow online readership: the higher a site's unique user numbers, the more advertising it could hope to sell. And the numbers have been impressive – titles used to falling paper sales now have millions of new readers. There is no doubt that online readership has massively extended the reach of British newspapers.
Indeed, the combined online audience for the seven audited UK national newspaper networks – the websites of the Guardian, Times, Telegraph, Independent, Mail, Sun and Mirror – peaked in January at around 140 million unique users, when Guardian.co.uk hit a record of 29.8 million. It has tailed off very slightly since then, the first sign that online readership may have reached a plateau now that broadband access has become so widespread and online habits more settled.
To some extent, revenues have followed the trend for readership growth – but not fast enough to make up for the fall in print advertising. Trinity Mirror, for instance, reported that total digital revenues in 2008 grew by 27.1% to £43.6m. But they also represented just 5% of the group total, albeit an increase from 3.7% in 2007, at a time when overall revenues dropped by more than £60m.
Advertisers have always seen a difference between consumers of print products who might be expected to spend considerable time reading them and looking at many of the adverts in the process, and a web user who may have merely strayed on to a web page by chance or as the result of making a speculative search.
And even if online readership has yet to reach saturation point, some industry executives think that growing overall numbers may no longer make much difference to their ability to generate new revenues – although they will not find it easy, initially at least, to allow competitors to overtake their traffic figures. Not only is there a finite amount of money available for online advertising, but there are also many, many sites competing for the cash. Newspapers are wondering whether they backed the wrong horse by going for volume rather than subscription.
The focus is now moving to the handful of pay models that have already been developed in publishing. The only British paper that has successfully introduced charging is the Financial Times which, seven years after doing so, has around 110,000 subscribers. A basic subscription to FT.com costs £2.99 a week – £155.48 a year – while a premium deal that includes mobile news and the Lex column costs £3.99 a week, or £207.48 a year.
At less than a third of the £650 cost of buying the print FT every day, and less than half the £468 required to take out a print subscription, the online deal looks like bad business for the company. But Rob Grimshaw, the managing director of FT.com, says the cost of online distribution is far less than printing and distributing a paper. "Online, the marginal cost of adding a new subscription to FT.com from anywhere in the world is pretty much zero. Once you look at it from that aspect, the online business model is extremely favourable. You don't tend to make nearly as much revenue as print but you make the same profit or even more profit."
But without the FT's business niche to target, can other papers charge for content? The fear is that their product is too disposable and substitutable – with multiple versions of the same story online. "Consumers aren't stupid," says Grimshaw. "If they can find something for free they won't pay for it."
Then there is the problem of how to charge. Rather than relying on a subscription model, a solution could involve micropayments – although there is no consensus on how much they would be. Newspapers will have to ensure that whichever system they use is efficient and easy, like Amazon or iTunes. Indeed, newspapers look hopefully towards these other areas of the media where a pay model has already been introduced. The music industry, after its crippling battle against piracy, has finally found a way to sell digital content, albeit at a discount compared with CD sales.
The broadcasting industry offers a less clear picture. The principle of paying for TV, mainly on the back of premium content, has become enshrined after 20 years of Sky, and on-demand viewing through subscriptions has become popular. But there is little evidence that people are willing to go online and pay for individual programmes. The success of the licence-fee funded BBC iPlayer has encouraged ITV to follow suit with a free, ad-funded model, while Channel 4's 4OD service has shifted away from pay-per-view since launching in 2006. Project Kangaroo, the three free-to-air broadcasters' attempt to develop an online home where they might have sold their programmes, was thwarted by competition concerns. (Equally, if newspapers were to make a collective decision to charge for content, which would avoid losing market share to other titles that remained free, there might be similar concerns.)
Perhaps the best hope for newspapers is technological. In the same way that the iPod helped sales of digital music, newspapers hope that there is a device on its way to make the online paper seem more valuable than it does on a computer screen. Some newspaper groups are believed to have had discussions with Amazon about getting their product on to the Kindle reader, a new version of which was launched in the US last week by Jeff Bezos (pictured left). But few believe these first-generation digital readers represent an iPod moment.
Murdoch last week hinted at some of the work News Corp has been doing. "We are looking at lots of things, models for charging, mobile readers," he said. "I don't believe in the Kindle model but I do think it is very interesting that people are going to that and to their BlackBerrys to view content."
In two years' time he hopes that charges for online content will produce digital revenues that make up for newspapers' print losses. That may be optimistic, but there is no doubt the recession has concentrated minds on moving out of the free era.
"There are not many companies out there that make a successful living by giving away their product for free," says Grimshaw. "In the future, quite a lot will be written about how an entire industry managed to persuade itself that it would be smart to give away its product to everybody."
Source: Guardian.co.uk
"The inchoate days of the internet will soon be over," Murdoch pronounced, citing an "epochal" debate in the industry. Having flirted with the idea of turning the Wall Street Journal website free before realising he had bought one of the world's few newspaper sites that makes money, Murdoch has come down in favour of online charging.
For a long time many journalists have been bemused and frustrated that their work merits a price in one medium but is given away free in another. Carolyn McCall, the chief executive of Guardian Media Group which publishes MediaGuardian, believes publishers need to think about where they might be able to charge in the future. "There's no review of the charging model, there's no formal kind of agreement that we should be charging at all, but it would be wrong not to think about what we would do in the future," she says.
Charging for business-to-business content, however, is a "no-brainer", says McCall, who led GMG's acquisition of Emap's B2B operation on the strength of its capacity to generate digital revenues. The model supporting so-called business-to-professional sites, such as MediaGuardian.co.uk, is "something we need to keep revisiting". But, in general news, the presence of the BBC makes charging impossible: "You basically have a fully funded and publicly funded news organisation on your doorstep. How can you compete with that?"
The BBC is what makes all newspaper executives think twice when it comes to making the internet pay. It has played its part in creating the notion that news should be free, which stands as a barrier to introducing any element of pay to newspaper websites.
Until now, the most important aim for newspapers has been to grow online readership: the higher a site's unique user numbers, the more advertising it could hope to sell. And the numbers have been impressive – titles used to falling paper sales now have millions of new readers. There is no doubt that online readership has massively extended the reach of British newspapers.
Indeed, the combined online audience for the seven audited UK national newspaper networks – the websites of the Guardian, Times, Telegraph, Independent, Mail, Sun and Mirror – peaked in January at around 140 million unique users, when Guardian.co.uk hit a record of 29.8 million. It has tailed off very slightly since then, the first sign that online readership may have reached a plateau now that broadband access has become so widespread and online habits more settled.
To some extent, revenues have followed the trend for readership growth – but not fast enough to make up for the fall in print advertising. Trinity Mirror, for instance, reported that total digital revenues in 2008 grew by 27.1% to £43.6m. But they also represented just 5% of the group total, albeit an increase from 3.7% in 2007, at a time when overall revenues dropped by more than £60m.
Advertisers have always seen a difference between consumers of print products who might be expected to spend considerable time reading them and looking at many of the adverts in the process, and a web user who may have merely strayed on to a web page by chance or as the result of making a speculative search.
And even if online readership has yet to reach saturation point, some industry executives think that growing overall numbers may no longer make much difference to their ability to generate new revenues – although they will not find it easy, initially at least, to allow competitors to overtake their traffic figures. Not only is there a finite amount of money available for online advertising, but there are also many, many sites competing for the cash. Newspapers are wondering whether they backed the wrong horse by going for volume rather than subscription.
The focus is now moving to the handful of pay models that have already been developed in publishing. The only British paper that has successfully introduced charging is the Financial Times which, seven years after doing so, has around 110,000 subscribers. A basic subscription to FT.com costs £2.99 a week – £155.48 a year – while a premium deal that includes mobile news and the Lex column costs £3.99 a week, or £207.48 a year.
At less than a third of the £650 cost of buying the print FT every day, and less than half the £468 required to take out a print subscription, the online deal looks like bad business for the company. But Rob Grimshaw, the managing director of FT.com, says the cost of online distribution is far less than printing and distributing a paper. "Online, the marginal cost of adding a new subscription to FT.com from anywhere in the world is pretty much zero. Once you look at it from that aspect, the online business model is extremely favourable. You don't tend to make nearly as much revenue as print but you make the same profit or even more profit."
But without the FT's business niche to target, can other papers charge for content? The fear is that their product is too disposable and substitutable – with multiple versions of the same story online. "Consumers aren't stupid," says Grimshaw. "If they can find something for free they won't pay for it."
Then there is the problem of how to charge. Rather than relying on a subscription model, a solution could involve micropayments – although there is no consensus on how much they would be. Newspapers will have to ensure that whichever system they use is efficient and easy, like Amazon or iTunes. Indeed, newspapers look hopefully towards these other areas of the media where a pay model has already been introduced. The music industry, after its crippling battle against piracy, has finally found a way to sell digital content, albeit at a discount compared with CD sales.
The broadcasting industry offers a less clear picture. The principle of paying for TV, mainly on the back of premium content, has become enshrined after 20 years of Sky, and on-demand viewing through subscriptions has become popular. But there is little evidence that people are willing to go online and pay for individual programmes. The success of the licence-fee funded BBC iPlayer has encouraged ITV to follow suit with a free, ad-funded model, while Channel 4's 4OD service has shifted away from pay-per-view since launching in 2006. Project Kangaroo, the three free-to-air broadcasters' attempt to develop an online home where they might have sold their programmes, was thwarted by competition concerns. (Equally, if newspapers were to make a collective decision to charge for content, which would avoid losing market share to other titles that remained free, there might be similar concerns.)
Perhaps the best hope for newspapers is technological. In the same way that the iPod helped sales of digital music, newspapers hope that there is a device on its way to make the online paper seem more valuable than it does on a computer screen. Some newspaper groups are believed to have had discussions with Amazon about getting their product on to the Kindle reader, a new version of which was launched in the US last week by Jeff Bezos (pictured left). But few believe these first-generation digital readers represent an iPod moment.
Murdoch last week hinted at some of the work News Corp has been doing. "We are looking at lots of things, models for charging, mobile readers," he said. "I don't believe in the Kindle model but I do think it is very interesting that people are going to that and to their BlackBerrys to view content."
In two years' time he hopes that charges for online content will produce digital revenues that make up for newspapers' print losses. That may be optimistic, but there is no doubt the recession has concentrated minds on moving out of the free era.
"There are not many companies out there that make a successful living by giving away their product for free," says Grimshaw. "In the future, quite a lot will be written about how an entire industry managed to persuade itself that it would be smart to give away its product to everybody."
Source: Guardian.co.uk
Friday, May 8, 2009
Murdoch says worst of crisis over
NEWS Corporation chief executive Rupert Murdoch believes the worst of the economic crisis has passed.
Mr Murdoch said the company is now concentrating on hunting down ways to make more money from the web.
During News Corp's third quarter earnings call in New York today, Mr Murdoch announced a flat third quarter in which income drew level with the same quarter last year.
But he said the economic crisis was turning a corner and talked up plans for user-pays access to internet news content.
"It is increasingly clear that the worst is over," Mr Murdoch said.
"I have been uncharacteristically pessimistic in recent calls though I would argue it was a well-founded concern," he said.
"There are emerging sings in some of our businesses that the days of precipitous decline are done and that revenues are beginning to look healthier."
News Corp, which owns the Herald Sun, posted a third quarter profit of $US2.7 billion on the back of a boost from the partial sale of its stake in NDS Group.
The company expects operating profit in fiscal 2009 to be 30 per cent below the previous year's $US5.13 billion after a 47 percent drop in profits to $US755 million in the three months to March 31.
A strong performance from the News Corp cable network and film studios was offset by declines at its recession-plagued broadcast and publishing operations.
Australian newspaper income was down 42 percent while across the group. Dramatic losses in newspaper advertising revenue had been "exaggerated" by the recession, with sharp declines in job and real estate advertising revenue.
However, there were signs that advertisers were trickling back.
"At the very least, we've hit a floor, and we seem to be getting a bounce," Mr Murdoch said.
Mr Murdoch, who has never shied away from calling the conditions when they were tough, struck a more optimistic tone yesterday.
"We are beginning to see a number of bright spots that give us encouragement," Mr Murdoch said.
News Corp was looking at charging a fee for access to its online news content from mastheads around the world.
"We certainly planning that way. We'll test it first on some of our stronger ones," he said.
"I would think you will see some within the next 12 months."
The Wall Street Journal, the only US newspaper to increase circulation in the most recent audit, was attracting twice as many website visits as last April.
The Journal charges for some content.
News Corp had made its operations leaner worldwide.
"To that end we have reduced staff levels by 3000 people affecting very few journalists or creative personnel," he said.
"We have streamlined a merged operations everywhere but especially at our stations and newspapers,
"These strategies will allow us to emerge even stronger when the recovery begins."
The Wolverine movie franchise was "important" and the growth of 3D cinema would continue to help the company build its film and entertainment divisions, he said.
Filmed entertainment grew operating income by eight per cent to $US282 million and the cable networks grew operating income by 30 per cent to $US429 million.
The company was not interested in acquiring other newspaper mastheads, such as the LA Times or the New York Times, as long as the existing model for newspapers was "malfunctioning", Mr Murdoch said.
News Corp was leading the way in finding a more profitable model, he said.
"You can confidently presume that we are leading the way in finding a model that maximises revenues and returns for our shareholders."
Source: heraldsun.com.au
Mr Murdoch said the company is now concentrating on hunting down ways to make more money from the web.
During News Corp's third quarter earnings call in New York today, Mr Murdoch announced a flat third quarter in which income drew level with the same quarter last year.
But he said the economic crisis was turning a corner and talked up plans for user-pays access to internet news content.
"It is increasingly clear that the worst is over," Mr Murdoch said.
"I have been uncharacteristically pessimistic in recent calls though I would argue it was a well-founded concern," he said.
"There are emerging sings in some of our businesses that the days of precipitous decline are done and that revenues are beginning to look healthier."
News Corp, which owns the Herald Sun, posted a third quarter profit of $US2.7 billion on the back of a boost from the partial sale of its stake in NDS Group.
The company expects operating profit in fiscal 2009 to be 30 per cent below the previous year's $US5.13 billion after a 47 percent drop in profits to $US755 million in the three months to March 31.
A strong performance from the News Corp cable network and film studios was offset by declines at its recession-plagued broadcast and publishing operations.
Australian newspaper income was down 42 percent while across the group. Dramatic losses in newspaper advertising revenue had been "exaggerated" by the recession, with sharp declines in job and real estate advertising revenue.
However, there were signs that advertisers were trickling back.
"At the very least, we've hit a floor, and we seem to be getting a bounce," Mr Murdoch said.
Mr Murdoch, who has never shied away from calling the conditions when they were tough, struck a more optimistic tone yesterday.
"We are beginning to see a number of bright spots that give us encouragement," Mr Murdoch said.
News Corp was looking at charging a fee for access to its online news content from mastheads around the world.
"We certainly planning that way. We'll test it first on some of our stronger ones," he said.
"I would think you will see some within the next 12 months."
The Wall Street Journal, the only US newspaper to increase circulation in the most recent audit, was attracting twice as many website visits as last April.
The Journal charges for some content.
News Corp had made its operations leaner worldwide.
"To that end we have reduced staff levels by 3000 people affecting very few journalists or creative personnel," he said.
"We have streamlined a merged operations everywhere but especially at our stations and newspapers,
"These strategies will allow us to emerge even stronger when the recovery begins."
The Wolverine movie franchise was "important" and the growth of 3D cinema would continue to help the company build its film and entertainment divisions, he said.
Filmed entertainment grew operating income by eight per cent to $US282 million and the cable networks grew operating income by 30 per cent to $US429 million.
The company was not interested in acquiring other newspaper mastheads, such as the LA Times or the New York Times, as long as the existing model for newspapers was "malfunctioning", Mr Murdoch said.
News Corp was leading the way in finding a more profitable model, he said.
"You can confidently presume that we are leading the way in finding a model that maximises revenues and returns for our shareholders."
Source: heraldsun.com.au
Wednesday, March 11, 2009
Is Rupert Murdoch Losing His Magic Touch?
TWO years ago, Rupert Murdoch bestrode the media world like a colossus. News Corp.’s stock simmered above $25 a share as properties from MySpace to American Idol to Fox Sports stood tall. A business news channel was in the works, and Murdoch was gunning for Dow Jones as the jewel in his media crown. Today, if you listen closely, you can hear the air leaking out.
It’s not just the Great Recession (to use the name currently in vogue). Ever since the purchase of Dow Jones, signs of fatigue and weakness have been appearing in nearly every area of Murdoch’s empire. News Corp.’s share price has fallen 77 percent from its 2007 high to $6 Friday, compared to a 56 percent fall in the S&P 500.
That’s not to say Dow Jones was a bad move. (Although it was a mightily overpriced one; News Corp.’s $14 billion market cap is only two and a half times the $5.6 billion it paid for Dow Jones.) Dow Jones has given News Corp. a strong foothold in online news. Its sites’ traffic grew 76 percent last year, and while the Wall Street Journal’s page views are significantly smaller than the New York Times’, its growth is twice as fast.
So why did operating income at News Corp.’s newspaper division fall 9 percent last quarter? Because other newspapers it owns aren’t being as spry as the Journal and its sister sites about driving traffic. Many are clinging desperately to print formats. As has been said over and over, it’s not the news(paper) business that’s dying, it’s the print platform.
Operating income is falling faster in other divisions: down 93 percent in television last quarter, 84 percent in satellite and 72 percent in film (Fox studios had only two of the top 20 grossing movies last year). New technologies are undermining these and other areas of its empire. Why bother with cable or satellite TV when you can get the many best programs online? Many are canceling their pay TV subscriptions to save precious dollars. Others who keep watching are using TiVo or other personal video recorders that let them skip channels commercials.
But News Corp. isn’t showing signs it can capitalize on digital media. Many MySpace pages, once lovingly nurtured, have gone to seed, and the site’s revenue was down 3 percent to $226 million, while operating income fell 85 percent to $7 million. The move by Hulu, of which News Corp. owns 45 percent, to box out Boxee is not only unpopular, it’s becoming a PR black eye. These challenges could grow more daunting as Peter Chernin, the executive with a reputation for really understanding digital media and issues like digital-rights, heads for the exits.
That leaves News Corp. with a sprawling empire of businesses struggling to keep up with a fast-changing world. And it leaves Murdoch looking like an old media baron — which he may have been all along.
Source: Gigaom
It’s not just the Great Recession (to use the name currently in vogue). Ever since the purchase of Dow Jones, signs of fatigue and weakness have been appearing in nearly every area of Murdoch’s empire. News Corp.’s share price has fallen 77 percent from its 2007 high to $6 Friday, compared to a 56 percent fall in the S&P 500.
That’s not to say Dow Jones was a bad move. (Although it was a mightily overpriced one; News Corp.’s $14 billion market cap is only two and a half times the $5.6 billion it paid for Dow Jones.) Dow Jones has given News Corp. a strong foothold in online news. Its sites’ traffic grew 76 percent last year, and while the Wall Street Journal’s page views are significantly smaller than the New York Times’, its growth is twice as fast.
So why did operating income at News Corp.’s newspaper division fall 9 percent last quarter? Because other newspapers it owns aren’t being as spry as the Journal and its sister sites about driving traffic. Many are clinging desperately to print formats. As has been said over and over, it’s not the news(paper) business that’s dying, it’s the print platform.
Operating income is falling faster in other divisions: down 93 percent in television last quarter, 84 percent in satellite and 72 percent in film (Fox studios had only two of the top 20 grossing movies last year). New technologies are undermining these and other areas of its empire. Why bother with cable or satellite TV when you can get the many best programs online? Many are canceling their pay TV subscriptions to save precious dollars. Others who keep watching are using TiVo or other personal video recorders that let them skip channels commercials.
But News Corp. isn’t showing signs it can capitalize on digital media. Many MySpace pages, once lovingly nurtured, have gone to seed, and the site’s revenue was down 3 percent to $226 million, while operating income fell 85 percent to $7 million. The move by Hulu, of which News Corp. owns 45 percent, to box out Boxee is not only unpopular, it’s becoming a PR black eye. These challenges could grow more daunting as Peter Chernin, the executive with a reputation for really understanding digital media and issues like digital-rights, heads for the exits.
That leaves News Corp. with a sprawling empire of businesses struggling to keep up with a fast-changing world. And it leaves Murdoch looking like an old media baron — which he may have been all along.
Source: Gigaom
Monday, December 8, 2008
Who's the mogul now... Murdoch vs Sulzberger
THIS has been Rupert Murdoch week in New York, which has only added to the many difficulties of Arthur Sulzberger junior. Ordinarily, given that he has just slashed the dividend paid by the increasingly troubled New York Times Company, which he has run since 1997, Mr Sulzberger might have been grateful that everyone’s attention has been on another media mogul. But “The Man Who Owns the News”, a new biography that has made Mr Murdoch the talk of the town, contains a savage critique of Mr Sulzberger and describes in convincing detail Mr Murdoch’s ever-stronger desire to acquire the New York Times.
The New York Times is Mr Murdoch’s “favourite train wreck”, writes his latest biographer, Michael Wolff, who had unprecedented access to the tycoon, his family and his employees. (This is not an authorised biography, but Mr Murdoch is said to be broadly pleased with a book that celebrates his acquisition in 2007 of Dow Jones, owner of the Wall Street Journal.) “I’ve watched [Mr Murdoch] go through the numbers, plot out a Times merger with the Journal’s backroom operations,” writes Mr Wolff. “He has conjured, too, how in Murdoch style, he might convince the Sulzbergers to let him in, if he promises to leave Arthur in charge—and how he could then make Arthur his puppet.”
Until recently, Mr Murdoch’s dislike of Mr Sulzberger—the feeling is said to be mutual—could be attributed mostly to a right-winger’s visceral dislike of the Manhattan-liberal journalism of the New York Times. But, if Mr Wolff is to be believed, in recent years Mr Murdoch’s young wife, Wendi Deng, “has turned him into…well, almost a liberal.” Instead, it seems, Mr Sulzberger strikes Mr Murdoch as a frightening case-study of how a newspaper dynasty can go wrong. Mr Sulzberger took over his father’s newspaper business, and Mr Murdoch would like one of his children to inherit the reins of his firm, News Corporation. Ailing newspaper dynasties may offer a cautionary tale to Mr Murdoch, but they also present him with a commercial opportunity. The Bancroft clan that controlled Dow Jones (but no longer had a management role) was another example of a newspaper dynasty that had lost its way. Mr Murdoch saw them off, against the odds, so why not repeat the trick with the Sulzbergers?
So far, the Sulzbergers have remained unwaveringly loyal to their latest son to run the family firm, though he gets more embattled by the day. He has had to give board seats to two activist investors who had loudly criticised him. Circulation has been eroding bit by bit, to an average of 1,077,000 per weekday in the six months to March. Advertising revenues fell by 13.7% in the third quarter, as the recession caused companies to slash marketing. The New York Times Company’s share price has fallen by almost 60% this year, to its lowest in 24 years, taking the firm’s market capitalisation to $1 billion. Mr Sulzberger’s decision on November 20th to cut the firm’s quarterly dividend by three-quarters, in order to conserve precious cash, could cost family shareholders $18m a year—though he had the full support of the controlling Ochs-Sulzberger Trust.
Ultimately, the Bancrofts lost the Journal because the family was torn apart by intergenerational warfare: the younger family members, who had no real connection to the newspaper business, were keen to sell and thus bank their inheritance. There are reports that the fifth generation of Sulzbergers is similarly restless, though as Mr Sulzberger has pointed out, the eight-member family trust that controls the company is much less exposed to this pressure than the many Bancroft-family trusts were. That said, an obvious heir has yet to emerge to Mr Sulzberger—nicknamed “Pinch”—who took over as chairman from his father, Arthur “Punch” Sulzberger, who had in turn succeeded his father. The fate of the Bancrofts has reinforced the belief of many observers that once the Sulzbergers cease to be practically involved in running the business, it will be only a matter of time before it is sold. That said, because Mr Sulzberger is only 57, succession is not yet an urgent question.
Grey days for the Gray Lady
Mr Murdoch apparently blames Mr Sulzberger for the New York Times Company’s many problems. For a start, trying to make the Times a national newspaper loosened its essential ties with New York. Mr Sulzberger’s excessive chumminess with some journalists contributed to two scandals that hurt the paper’s reputation: the invented stories of Jayson Blair and the jailing (over her refusal to disclose sources in the Valerie Plame affair) of Judith Miller, a reporter who, the Times later said, it had protected too much. And although Mr Sulzberger talked about the need to evolve from being a newspaper into an internet brand, it was Mr Murdoch who became the new-media titan by acquiring MySpace.
Well, up to a point, Mr Murdoch. Mr Sulzberger’s problems are largely those of the newspaper industry as a whole, the business model of which has been knocked sideways by the rise of the internet. News Corp’s shares have actually fallen by more this year than those of the New York Times Company. And it is only Mr Murdoch’s diversification many years ago into television and the internet that has camouflaged what a poor financial investment it was to buy the Journal. Moreover, the Times has done a better job than almost any other paper (except perhaps the Journal) in moving online. It now boasts the most visited American newspaper website, and on November 5th, the day after the presidential election, it had an impressive 61.6m page views. Mr Sulzberger’s acquisition of About.com, a search engine, was a decent buy, though he could certainly have done more to develop it.
Yet the harsh fact is that, his fault or not, Mr Sulzberger has yet to find a business model on the web that generates enough money to support the Times’s high-quality, but expensive, global network of reporters. He is running out of time to do so. Meanwhile, Mr Murdoch dreams of becoming his puppet-master.
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