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[by Andrew Clark] If you go by the numbers, a slim Australian with a sharp tongue and a penchant for ultra-skinny ties has become the most p…

Robert Thomson @ Web 2.0

[by Andrew Clark] If you go by the numbers, a slim Australian with a sharp tongue and a penchant for ultra-skinny ties has become the most powerful newspaper editor in America. The Wall Street Journal has claimed top spot in circulation rankings and its boss seems intent on marshalling a print industry war against online “thievery”.

A loyal lieutenant and friend of Rupert Murdoch, the WSJ’s Robert Thomson rarely minces his words. A former editor of the Times, he dismissed the Guardian as a paper catering for a north London ghetto, and on arrival at the WSJ he upset veteran writers by saying that certain elaborately researched stories seemed to have the “gestation of a llama”.

He was at it again last week with a full-throated assault on the internet powerhouse Google (NSDQ: GOOG). At a Silicon Valley conference, Thomson startled a gathering of technology chiefs by accusing Google’s search chief, Marissa Mayer, of being an unwitting online pimp: “Marissa unintentionally encourages promiscuity.”

He attacked Google’s news search function for showing the sources of news articles in “tiny” fonts and aggregating quotes from newspapers with little prominence to their publishers. He continued: “The whole Google model is based on digital disloyalty. It’s about disloyalty to creators.”

The WSJ editor is fast becoming News Corporation’s attack dog in a campaign to re-engineer the news publishing industry’s failing business model. News Corp has lost patience with giving away journalism on the internet: Murdoch wants to erect pay walls, charging readers for access to all of his websites, ranging from the Times and the Sun to the New York Post and the Australian.

News Corp views search engines and online “aggregators”, such as the Huffington Post or the Drudge Report, as the biggest source of leakage of its costly, carefully tailored content. At a recent media summit in Beijing, Murdoch described them as “plagiarists” and “content kleptomaniacs”. This year, Thomson blasted them as “parasites”.

The relationship between search engines and newspapers is subtle. Sites such as Google News drive a phenomenal amount of traffic to newspaper stories. But publishers complain that these visitors are of little value; they mostly go directly to a single article, read it, and exit without visiting a newspaper’s home page or seeing much advertising.

In an e-mail to the Observer, the Huffington Post’s founder, Arianna Huffington, characterised News Corp.’s attacks as a throwback to a bygone era and scoffed at Thomson’s assault on Google: “While promiscuity is not good in relationships, it’s great for those looking for news and information. Trying to deny news consumers as wide a range of options and viewpoints as possible seems shortsighted and ultimately self-defeating.

“This is a golden age for news consumers who can surf the net, use search engines, access the best stories from around the world, and comment, interact and form communities.”

Variety, however, is not proving to be lucrative. In the eyes of News Corp (NYSE: NWS). the paltry online advertising revenue generated by flighty visitors from search engines is simply inadequate to pay for the research, travel, staff costs and overheads that go into journalism. Murdoch believes net readers should, and will, pay to read news, and views the WSJ as a shining example of success in online charging. A subscription to its online offering costs $103 (£62) a year. The paper had 407,000 web subscribers in the six months to September which, combined with its 1.6m print sales, meant a total daily circulation of 2.02m.

Figures last week from the Audit Bureau of Circulations revealed that, for the first time, the WSJ’s combined print and digital sales surpassed America’s long-time best-selling USA Today.

But not everyone believes that the WSJ’s success can be replicated elsewhere. “The reason the Journal’s always been able to use a pay wall is that its economic model is very different from other newspapers,” says Tom Rosenstiel, director of the Pew research centre’s project for excellence in journalism. “Many of its readers pay for it out of business expenses, not out of their own funds.”

Many experts also have reservations about the WSJ under Thomson’s stewardship. Adopting a Fleet Street approach, he has reined in lengthier reads in favour of snappier reports and has ramped up mainstream news content

This article originally appeared in © Guardian News & Media Ltd..

  1. Evan Rudowski Monday, November 2, 2009

    Tom Rosenstiel of Pew says:

    “The reason the Journal’s always been able to use a pay wall is that its economic model is very different from other newspapers. Many of its readers pay for it out of business expenses, not out of their own funds.”

    This statistic if often repeated by those opposed to pay walls, who wish to explain the WSJ's success as an exception that proves the rule. But is it a valid claim?

    Not really.

    Based on its surveys, the WSJ itself has asserted that the majority of its online subscribers are individuals who do not rely upon business expenses to cover the cost of their subscriptions.

    Furthermore, even local newspaper subscriptions are often justified as business expenses. According to the NAA, nearly 40 percent of daily newspaper subscribers in 2006 were either in “Management, Business and Financial Operations,” “Professional and Related Occupations” or “Sales and Office.” You can find this at: http://www.naa.org/TrendsandNumbers/Audience-Profiles.aspx

    The point is that local dailies are equally valuable sources of actionable information for local business and therefore are as legitimate a business expense as the Wall Street Journal, if not more so, for people in the local coverage area.

    So is the WSJ really an exception that proves the rule? Or have they actually just been more savvy at exploiting the online medium — something that any publisher could do if they invested the time and effort?

    Kind regards,
    Evan Rudowski
    http://www.subhub.com

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  2. I feel this article is making the assertion Rupert Murdoch/News Corp invented the successful "pay wall" for WSJ when in fact, WSJ subscription model was already in place when News Corp made the acquisition.

    News Corp done little or next to nothing except ride on the WSJ already established reputation.

    Robert Thomson does not deserve credit which is not due…his short-term memory partisanship of the WSJ has not proven itself to be a long term success model for paid content

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  3. The other day, using NY Times as the example, I posited that Google should put the newspapers out of their misery. That Google should take the next logical step from gathering other peoples' content to creating their own authoritative reporting. You can find the post at http://tdnyc.wordpress.com/2009/10/26/google-pay-wall/

    Some other points to consider:
    – Google has already become the authoritative source for some unlikely info. For example, if you ask people to give you the latitude and longitude for a location, they will likely give you whatever Google serves up. There used to be many directory providers with many algorithms for finding geographic center points – Google has trumped them all.

    – Publishers have know for a long time that there is little distinction in the industry between creating your own content and organizing the content of others. The entire directories business looks remarkably like Google, only Google has a fancy technology organizing and publishing the content and a fancy technology selling the ads. Why not take that next step?

    – The argument from some (like Maureen Dowd) has been that by siphoning off profits from the newspapers, Google puts journalism at risk. Wouldn't a reasonable solution be for Google to fund the newsroom and take all of the distribution (circ) revenue for the product?

    I know that the guys at Google think that this idea is stupid, but…

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  4. Its a bit rich for a member of the NewsCorp family to be going on about Piracy. Elsewhere in the family, my research into the economics of bootleg video stream aggregators in the US anime industry showed that for one site at least, MySpaceCDN servers, registered to 20th Century Fox, are their biggest pirate support bases.

    These aggregators could not survive without the free video hosting provided by the likes of NewsCorp.

    At bit.ly/k7P6p, I ask the question whether Rupert is picking his Hulu.com partner's pockets, or is just an Old Media Dinosaur. I tend to come down on the Dinosaur thesis.

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  5. Maybe the news is more important than who is telling it.

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