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November 9, 2009

Time over for the Times as Rupert Murdoch scampers off the ramparts?

Recent articles in the Guardian newspaper have suggested that reality has finally sunk in with News Corp’s owner, Rupert Murdoch, as paywalls have been deferred indefinitely and his charges against free online news have now come crashing down.

As a recent example of charging for online news, the furore over British MP’s expenses bore out the fact that as far as “exclusive” stories are concerned, this scandal was re-reported on many assorted websites that were free, within half-an-hour of the story’s release. So, why would anyone choose to go to the Telegraph website, if it sat under a paywall, when you could get the same information from alternative sources?

Obviously, by setting a date for the advent of paid-for content, Murdoch was hoping that other news corporations would follow suit. But even if he had sat down with all the world’s newspaper execs to hammer out a deal, wouldn’t this have amounted to a cartel, which of course is illegal in most countries.

I have argued for the past few weeks that a report by Peter Horrocks, Director of BBC World Service (see http://www.sitepronews.com/2009/07/28/social-media-puts-fortress-journalism-under-siege/), which promotes speciality publishing in response to declining newspaper revenues, is the correct view of the future of online news. Rupert Murdoch, on the other hand, would have found it almost impossible to introduce micro-charges for readers browsing his newspaper websites.

On November 5th, Mr Murdoch admitted, in a report published in the Guardian newspaper that, “last night the schedule was slipping for the start of online charging at papers including the Sun, the Times, the New York Post and the Australian. The initiative, which has divided the media industry, is an attempt to recalibrate the business model for struggling print media.”

In July, Murdoch launched a massive and prolonged attack against the BBC, which can never charge for online news, as it’s a state-run institution. Since that date, his son James has gone into action against the corporation to strengthen his father’s diktat that News Corp was not going to “give news away for free”.

As of last week, he has climbed off of his trusted steed and addressed his audience more honestly, and from the ground, saying that although initially he fully intended to lock his news up behind paywalls from the end of the company’s financial year, ending in June 2010, “I wouldn’t promise that we’re going to meet that date.”

According to the Guardian newspaper: “News Corp revealed an 11% increase in profits to $571m for the three months to September…but [it] continues to struggle with its digital offerings. Murdoch revealed that the social networking website MySpace has failed to deliver on a minimum level of web traffic it guaranteed under an advertising tie-up with Google three years ago. As a result, it will not receive all of the $900m that Google had agreed to pay for the right to offer search and advertising on MySpace.”

So, what are the figures that may have inspired this retreat? And how much advertising revenue does News Corp derive from the average newspaper reader? Well, from buying the physical article, $150; from newspaper advertising, $100; and from the web: a derisory $8.

Another pertinent question Mr Murdoch seemed to overlook as he was attacking the very foundations of the BBC, how much time does the average reader spend on his papers: 12 hours a month in print; 10 minutes a month online, or 1/720th.

The difficulty in understanding both models is that newspapers are tactile and dense to read; online is the opposite. I would be interested in finding out if anyone, anywhere, ever, has read an entire newspaper online. It just doesn’t happen. Also, when you look at the typography of online news (the BBC is a perfect example), journalists write in bite-sized chunks, as we all know that reading dense tracts of text on-screen is too wearing an experience. Therefore, it’s can only be modelled as an add-on, not as an entity in itself.

For as long as newspapers have been publishing online, owners have accepted that charging for it was never going to work, and concluded a long time ago that advertising plus free access was the preferred model. But then came the credit crunch and with it the negative effects on the profits of publishing; and publishers needed to find a way out. Murdoch decided to go back a few paces, if not a hundred miles, in re-introducing the idea of the paywall. Now, it looks as if this re-enactment of the past — one that would never have come to fruition — is quietly being fazed out.

According to another article by the Guardian newspaper: “His Times/Sunday Times duo has dropped off the pace in Britain, adrift of the Mail, Guardian and Telegraph. His New York Post is down to 27th place in the league table of US online news resources. Fox, of course, is a palpable presence, but still trailing Yahoo News by 26 million users a month. How — the Wall Street Journal apart — do you start building paywalls around that?”

Murdoch ran the risk of trying to lead the newspaper industry towards a pay-per-view model when he said: “I believe that if we’re successful, we’ll be followed fast by other media.” He wasn’t, and the deal that has caused such a stir over the last three months seems dead in the water, with Mr Murdoch having been forced, at last, to eat humble pie.

When he said “change was inevitable” and “we’re certainly satisfied that we can produce significant revenues from the sale of digital delivery of newspaper content,” he spoke volumes about how, rather than becoming “the saviour of online news”, he severely miscalculated the market and today’s generation of readers.

So, for now, while the argument for fortress journalism abates, maybe we can return to normal and stop worrying about its consequences. In conclusion, it certainly seems that the Times has not kept pace with the times; and that if the Times wants to succeed in the future, it will have to reinvent itself with the times.

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John Sylvester is the media director of V9 Design & Build and an expert in search engine optimization and web marketing strategies.

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