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March 29, 2010

Is howling mad King Rupert a visionary in disguise?

In TechCrunch’s “The Madness of King Rupert” by Paul Carr he reports, incredulously,  that News International is to install a turnstile on its websites this June and wonders whether Murdoch is simply a barking latter-day George III or visionary in disguise.

Newspaper sales have been in decline for quite some time now and companies have been searching for a business model that will make money from their websites. News International chief executive Rebekah Brooks said it was “a crucial step towards making the business of news an economically exciting proposition”. Accepted, but is the Times is specialist enough to make that claim? If not, Paul Carr is right and readers will go elsewhere for content when they reach the turnstiles.

The BBC spent a long time looking at how the newspaper industry could change its model, detailed in a 94-page report by Peter Horrocks on the subject. Subsequently, the Corporation came under fire from the Murdoch clan as being uncompetitive, as television license fees pay for its content.

But at TechCruch, the writer had this to say about it: “Really the only possible reasoning – outside of madness – that’s left for Murdoch’s behaviour is that he’s cleverer than all of us. Perhaps if we just watch quietly we’ll soon see the true genius behind his plan. After all, that’s what happened back in the 1980s and 90s when he launched Sky Television – a British-based satellite TV channel. Back then no one in the UK paid for television (we’d been brought up on free to air TV with little or no demand for cable) and there were no signs that they were ready to start – and yet in less than a decade Sky had become one of the country’s biggest broadcasters. Perhaps that’s his plan with the Times as well – make the content of his new online editions so unbelievably compelling that subscribers will be forced to sign up in their droves?”

Compelling. The Times? James Harding, its editor, recently made comparisons with news and the music industry. “People said the game is up for the music industry because everyone is downloading for free. But now people are buying from download sites.” Who exactly is buying from download sites? Not in my backyard they’re not.

According to the BBC, the latest figures show that The Times and Sunday Times have 1.22m daily users but Media research company Enders Analysis told the BBC that anyone who believes the Times papers will get the usual 5% conversion after the paywall is installed is in “dreamland”. She also doesn’t believe Mr Murdoch’s strategy represents the endgame for his loss-making papers. “If it fails, Murdoch will think of something else. He has been supporting his loss-makers for years.”

Paul Carr believes that “moving its content behind a paywall will be the death of the Times; one of the world’s most respected newspapers and a British national treasure. Even with a relatively modest subscription cost of £1…it has been shown time and time again that the hassle factor of making even a small payment to access a website will result in a haemorrhaging of readers.”

Another source, Emily Bell, writing for The Guardian, says that: “The paywall, the value gate, the towering edifice of unharvested cash, call it what you will, the debate about paid-for content on the web is increasingly about anything but the actual sagacity of putting a turnstile on your website,” arguing that quality journalism is the real issue at stake.

Specialist publications, like the Economist, Wall Street Journal and the Financial Times already have audiences who are charged for digital content but I would not place the Times in this category.

Philosophically, Ms Bell continued: “The paywall debate at heart is partly pragmatic, as the risk of implementing the strategy is high and the rewards are unknown; but also philosophical, about whether journalism is viewed as a commodity or a democratic necessity.”

However, one comment by “Ariel Bender” on TechCrunch’s “Howling Mad Murdoch” article said: “It won’t be long before the New York Times joins the WSJ on the iPad as a paid app. Before too long everyone will take a stand against Google’s vampiristic business model, leaving them to choke on their own hubris and die. That will be a happy day, indeed.”

Harsh, but if Bender has it right, then maybe Howling Messiah may be a more fitting epitaph when micropayments find a common platform.