Murdoch vs. the interwebs

A while ago I mentioned that media übermogul Rupert Murdoch is trying to buck the trend toward free content by charging for his properties' online content, and I wondered how it might play out. Unsurprisingly, I wasn't the only one . In the November issue of Vanity Fair, for example, Murdoch biographer Michael Wolff lays out why the "new media" folks think that Murdoch Just Doesn't Get It. Actually, they're not quite that nice about it:

Almost all Internet professionals, on the other hand, think that charging for general-interest news online is fanciful—“Rubbish … bonkers … a crock … a form of madness,” in the description of Emily Bell, who has long run the Guardian newspaper’s Web site, one of the industry’s most successful—and, in fact, it has been tried before and failed. “It’s Groundhog Day,” adds Bell. The New York Times tried to levy a subscription charge for its columnists but reversed course and declared itself free again. Even Murdoch’s Wall Street Journal, the model of subscription content online, has made more and more of its site free.

(Elsewhere Wolff cites the Grauniad, as Private Eye likes to call it, as a prime example of a locally-known publication making itself into an international brand on the web)

There appears to be a wide consensus that in the newspaper and magazine business, charging for content just means driving away the vast bulk of your readers and angering your columnists by cutting of their exposure to lucrative outside gigs:

The position of Internet professionals is straightforward: while it’s possible to charge for certain kinds of specialized information—specifically, information that helps you make money (and that you can, as with an online Wall Street Journal subscription, buy on your company expense account)—there are no significant examples of anyone being able to charge for general-interest information. Sites where pay walls have been erected have suffered cuts in user traffic of, in many cases, as much as 95 percent as audiences merely move on to other, free options.

Evidently Murdoch's track record with online publishing is not that great. Wolff gives a litany of failures, including MySpace being "flattened" by FaceBook and suggests that the pay wall was one reason that Murdoch has alerady taken a $3 billion writedown on his purchase of the Journal.

Wolff's most intersting argument, though, gives me a chance to drag the not-so-disruptive techonlogy tag out of mothballs:

Murdoch has a larger problem still. It is, after all, not the Internet that has made news free. News in penny-newspaper or broadcast (or bundled cable) form has always been either free or negligibly priced. In almost every commercial iteration, news has been supported by advertising. This is, more than the Internet, Murdoch’s (and every publisher’s) problem: the dramatic downturn in advertising.

[...]

It is hard to imagine that when advertising growth resumes there will not once again be a rush to encourage traffic growth, but right now, the news business, supported for a hundred years by advertising, whose core skill has been selling advertising, believes it must right away, this second, re-create itself with a new business model where advertising is just the cream on top and where it’s the consumer who pays the true cost of newsgathering.

Indeed.