Murdoch to Mount the Charge

So Rupert Murdoch will start in June throwing a paywall around the websites of The Times and Sunday Times. Online readers will be charged £1 for a day’s access or £2 for a week’s subscription. Payment will allow access to both websites.

A weekly subscription will give readers also access apparently to an e-paper version and other new, as yet unnamed, digital applications. Those who already subscribe to the print edition of either paper will also gain free online access. The Times editor is gung-ho: “Now, we are leading the way again. Our new website – with a strong, clean design – will have all the values of the printed paper and all the versatility of digital media. We want people to do more than just read it – to be part of it,” James Harding announced in a press release.

He continued: “The coming editions of The Times on phones, e-readers, tablets and mobile devices will tell the most important and interesting stories in the newest ways. Our aim is to keep delivering The Times, but better.”

Now let’s see if it works. I have written elsewhere on this blog that Murdoch doesn’t really get the Web – News International was much slower than its UK newspaper rivals at the Guardian and the Telegraph, to exploit the Web. Likewise in the U.S. with American cable rivals. His belated internet purchases to try to catch up have fizzled badly: he over-paid for already established sites and has generally made a hash of them, MySpace being the best example.

Paywalls as conceived by Murdoch may be over aggressive at this stage. Total paywalls may well put off users, especially in the absence of rivals following suit – a blend of free and paid-for is far more likely to succeed. Paywalls have an effect of reducing online social marketing, blocking blogs and social media sites from linking to stories and giving them wider dissemination.

Clearly, as the online World develops and as new tablets and e-reader devices are developed, paying for content is likely to reassert itself: there will be a convergence of hardware, reading habits and the ability to personalise and market more surgically that will encourage payment. And those who really want real news – you know, the kind that actually involves news-gathering and reporting facts as opposed to opinion-mongering and shouting at opponents on talk shows – will need to pay if they want to get anything of value or authority. News-gathering is expensive. The waning of real reporting and the reduction in the numbers of real reporters able to place events and facts into context in an informing way is becoming ever more apparent.

But is Murdoch too early and too over-reaching? I suspect so. For instance, News International clearly has made the decision to keep the price low for online access in order not to drive away online readers. But is the price too low, if the company wants to keep people buying the actual print editions? Why spend 6 pounds a week on buying the hard-copy The Times when one pound will get you a week’s online access plus other features? Two pounds will get you both papers online. And that doesn’t even factor in the cost of a copy of the print edition of the Sunday Times. Okay, you can subsrcibe to the papers and get everything. But we shall see what we see.

Balancing the Free with the Purchased

Maurice Levy, the head of marketing group Publicis, strikes me as making sense when it comes to the newspaper pay-wall debate. Unlike Rupert Murdoch (see earlier posts), Levy is far more nuanced about the balance that will be needed probably between free and paid content — that is if newspapers are going to attract traffic and not put off readers while at the same time making some money.

Speaking to MediaGuardian at the start of the inaugural Abu Dhabi media summit, Levy, stressed that it is “not enough to have a big audience on the internet”, with media companies needing to find a mix between free and paid-for online content to survive in the digital era.

“The future of analogue media will not be supported by advertising alone. They will have to have profitable access to the internet. It’s not enough to have a big audience on the internet,” he said.

“Content has value and that’s something for which I have a strong point of view. I think media giving away their content is not a good service to themselves. It’s a shame, a pity. This content has a lot of value and it has to be valued reasonably,” he said.

The key will be to have some content that is free, but other elements only available for subscribers.

Murdoch Digital Floundering

Rupert Murdoch doesn’t have much to show for his digital efforts. He is still threatening pay-walls and seems to have little feel for a New Media that seriously threatens his bottom line. In the UK, the Telegraph Media Group and the Guardian newspaper continue to enjoy better traffic and more critical praise than The Times Online. The Telegraph is branching out with its Create department searching for business development ideas and exploiting the platform for advertorial purposes.

And on broader fronts there are setbacks for Murdoch. The latest came yesterday with the resignation of Silicon Valley veteran Owen Van Natta as CEO of MySpace, the tumbling social networking site Murdoch bought for nearly $600 million five years ago.

Van Natta, a former Facebook executive, was brought in just last year with the task of reviving a site that has seen a significant fall-off in membership and revenue. Murdoch has decided to distance the site from its origins and turn it into a portal for movie content and games. Reports are that Van Natta clashed with other Murdoch executives.

Who Will Be Right — Murdoch or Schmidt?

Rupert Murdoch is continuing his plans to erect a pay-wall around his news websites but Google CEO Eric Schmidt is right, I think, when he says: “In general these models have not worked for general public consumption because there are enough free sources that the marginal value of paying is not justified based on the incremental value of quantity. So my guess is for niche and specialist markets … it will be possible to do it but I think it is unlikely that you will be able to do it for all news.”

As I have written elsewhere on this blog, a pay-wall will only work if the vast majority of major news websites charge for content and that is unlikely. If traffic decreases, then advertising revenue will fall-off. Only the purveyors of premium news in business and sports coverage and other niche areas will be able to charge — although even in sports, sites that have been charging for content are finding great resistance.

Berlusconi: Stop Beating Up On Me

It is surprising that they have not clashed loudly before but as New York Times reporter Eric Pfanner notes European media titans Rupert Murdoch and Silvio Berlusconi are hard at it now with the Italian prime Minister claiming that The Times of London has only been covering the relationship between him and 18-year-old model Noemi Letizia because Murdoch was miffed at a tax increase imposed on the Murdoch-owned Sky Italia. Murdoch counter-claim is right: The Times has been restrained in their coverage of Berlusconi compared with The Economist and Financial Times. Pfanner’s article is full of rich ironies. The first is Murdoch saying during an interview with his own business channel in the U.S. — Fox Business — that he doesn’t give orders to the editor of The Times. As anyone who has ever worked at The Times knows, he generally doesn’t have to: astute editors there know when not to cross lines and certainly all the editors I served under were very cautious about how the paper treated media stories or articles that touched on Murdoch business allies or rivals. I recall a story I wrote criticial of Pat Robertson never seeing the light of day: at the time Rupert was involved in business negotiations with Robertson about broadcasting the 700 Club on Sky in Europe.

However, Berlusconi’s accusation against Murdoch — one made without any evidence — doesn’t make sense. Murdoch is hardly going to go out of his way to irritate Berlusconi , especially while he remains in office. Berlusconi could too easily change media rules to affect Murdoch’s Italian business. Berlusconi has a tendency to push through the rubber-state parliament legislation that undermines his foes and, as Pfanner points out, Berlusoni is keen to increase his subscriber share of the satellite market in Italy as his free-channels are suffering from acute falls in advertising revenue.

That aside, the richest irony is hearing Berlusconi complaining  about someone using their media holdings for personal use. Talk about the pot calling the kettle…..