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Summary:

The free ride is over online: Rupert says so. But what is the real motivation behind the old tycoon’s latest paid content battlecry?

There’…

News Corp. CEO Rupert Murdoch
photo: AP Photo/Evan Agostini, File

The free ride is over online: Rupert says so. But what is the real motivation behind the old tycoon’s latest paid content battlecry?

There’s no doubt he wants to increase digital revenues, but could it be that this is in large part an exercise in promoting printed newspapers? I can’t help feeling he won’t be too displeased if a side-effect of paywalls is to push freeloading web readers towards the newsagents to buy dead-tree copies of The Times instead…

News International execs – not least Murdoch himself, despite his enthusiasm for mobile e-readers – always stress the centrality of print to their present and future business models. Nothing — not this latest talk of paywalls — has changed that. The company spent £650 million last year on three state-of-the-art UK printing presses and reports have suggested NI will this year be almost doubling the amount it spends on promoting newspaper subscriptions from £7 million to £13.5 million.

Online paid content will not solve Murdoch’s balance sheet problems overnight: the returns are too small and the losses too big (according to figures quoted by Private Eye, The Times and Sunday Times lost a combined £58 million in 2008/09 financial year). So there must be other motives…

Print subscribers to both Times papers already pay £22 a month, or £264 a year. That’s a good discount on the newsstand price but very few people will be happy to pay both that and an online access charge (a pdf e-edition is £90 a year). So the most sensible option would be to offer a combined print-and-online subscription model, using one to promote the other and all while fulfilling NI’s primary objectives of selling more dead tree papers, upping circulation income and maintaining advertising spend and influence.

At best, NI can only hope investing in a paywall strategy now will pay off later on when, Murdoch hopes, the rest of the industry has followed suit and started charging online, and the reading public has accepted it won’t get something for nothing anymore. But, in the meantime, the company will be more than happy to see its print subscription go up even if millions of online readers say no to online subscription fees.

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  1. Miles Galliford Wednesday, August 12, 2009

    I agree that Mr Murdoch has an alternative agenda but I don't think his motivation is promoting print.

    Murdoch, like all the newspaper owners, knows the future of news distribution is online, but he also knows that he cannot charge a subscription for his general online news unless all the publishers do likewise at the same time. If the Times online went paid, readers would simply move to the free Telegraph.oc.uk.

    However competition laws prevent him from having this coversation directly with other newspaper proprietors so he is doing it in public.

    He is trying to build an alliance of newspaper publishers without ever talking to them in private. His perfect sceneario is that the conversation builds momentum online so it appears to be open and transparent and then all the newspapers move to a subscription model at roughly the same time. Locking up all the quality news content so there aren't any free quality substitutes is the only way the newspapers can get people to pay for access to their online content.

  2. Mark Hendriksen Thursday, August 13, 2009

    I'd not write off the possibilities with print as Mobile Interaction, Online and Print can actually work in perfect harmony.
    All of these go through transitional periods, as they did when the www 'seemed' to be the end of all print as we knew it, but the fact is it eventually began to work with online and although there is a shift again now, mobile may have an impact too, which could be positive.

    It needs some modern thinking from the Newspaper world though, and Murdoch is a rarity in actually being able to see that whilst many newspapers are still too stuck in the past and not embracing change or future opportunities.

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