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July 26, 2010

Behind the Times: Murdoch’s Paywall?

A recent article in The Guardian newspaper claims that Rupert Murdoch’s online version of the Times is losing “almost 90% of [its] online readership”. Transposing business models of print media into online deserves an unrighteous kick in the pants

In general, websites are support mechanisms for bricks-and-mortar companies and the attempt to elevate and transpose these business models to online, as many have argued in the past, is ignorant and bordering on the insane.

Does Murdoch not realise that the newsstand of the new media model is Google; and why has he thought it wise to remove all his publications from it? In addition, the media industry has not seen fit to take account of a report by Peter Horrocks of the BBC that news corporations need to specialise. What is the point of putting your news behind a paywall when your competition is reporting the same news that doesn’t?

Google, Twitter and Facebook demand that online dissemination is open and searchable. Murdoch knows better, he thinks, even though it has been reported that he only recently learned how to use email. And where on earth do online news, that is openly copied on to other sites and blogs, resolve into bottom-line economics?

John Gapper of the FT argues that Erich Schmidt’s remarks at the Google Zeitgeist conference on how the company is trying to work with news groups, including Rupert Murdoch’s News Corp on new revenue models, is that “Google itself is agnostic”.

“Its attitude contrasts to the tendency of those such as Alan Rusbridger of The Guardian and Jeff Jarvis to equate innovation in online news with not charging. As Mr Jarvis wrote of Mr Murdoch’s “pathetic” web strategy, under which The Times and The Sunday Times will charge for online: By building his paywall around Times Newspapers, he has said that he has no new ideas to build advertising. He has no new ideas to build deeper and more valuable relationships with readers and will send them away if they do not pay. Even he has no new ideas to find the efficiencies the internet can bring in content creation, marketing, and delivery.”

At the Fortune Brainstorm Tech conference last week, News Corp. Chief Digital Officer Jon Miller talked about the company’s efforts to put “paywalls” on more of its content. However, he did acknowledge that you do lose unique users when you put up a paywall, but mostly it’s people who were only reading a single story or video. He said advertising was holding up quite well.

Really, well the Guardian doesn’t seem to think so. “Based on the last available ABCe data for Times Online readership (from February 2010), which showed that it had 1.2 million daily unique users, and Hitwise’s figures showing it had 15% of UK online newspaper traffic, that means a total of 332,800 daily users trying to visit the Times site.

“If none of the people visiting the site have already registered, the one-on-four dropout rate means that traffic actually going from the registration site to the Times site is just 84,800, or 1.06% of total UK newspaper traffic – a 93% fall compared with May.”

According to his biographer Michael Wolff of Vanity Fair, “Murdoch has not used the internet, let alone Google (he only recently discovered email) and so he cannot possibly understand the dynamics, demands and opportunities of our post-industrial, now-digital media economy. I use the internet and teach it and write about it and I still can’t grasp the complete implication of the change. I don’t think even Google can.” That’s maybe because they’re agnostics. But I don’t believe that either as the “content-is-king” cliché is a defining feature of Google’s ethos.

And Jeff Jarvis, of the Guardian, chimed in with: “The hard truth is that news organisations will shrink or die. No longer monopolies or oligopolies, the barrier to entry to their kingdom and business reduced to an inch, they simply cannot maintain their old scale, the size and margins that the City demanded. A new ecosystem of news, made up of countless smaller players operating under varying means, motives and business models, will undercut the big, old institutions. The hard iron that once was their advantage – the presses and trucks – have now become a killing weight around their craggy necks.

“Murdoch is a stranger in a strange land. All he has left to do is build a wall around himself and shrink away, a vestige of his old, bold self. Who would have thought that we’d end up feeling pity for the man? It’s almost enough to make me want to throw him a few quid. On second thoughts…”

As witness to the futility model, Murdoch has just butted out of the newsstand on organics and has now turned to Google AdWords on searches such as “London Newspaper” with: thetimes.co.uk/Subscribe. Trial the first 30 days for £1, and experience exclusive online content.” But the Times doesn’t exclusively report on London. Are we stupid enough to pay him for it when The Evening Standard is free, and does?

Maybe it’s a little but like the music industry, where bands these days make CDs for roadshows but receive scant revenue from them. The focus of the new business model here is to sell everything else but.

Mashable, I thought, might have a take on it and I looked for a survey on the subject. The data was taken from a survey of 27,000 consumers across 52 countries: “…Nielsen also found that nearly eight out of every ten (79%) would no longer use a web site that charges them, presuming they can find the same information at no cost. In other words, unless your organisation breaks lots of exclusive and important stories, charging for content will be a major uphill battle.”

The question is whether the Times is that exclusive, or is it just the case of an imprudent, anachronistic business model that relies on the vagaries of an old man?

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