By Roy Greenslade: James Murdoch’s speech to investors in Barcelona (via Reuters) yesterday revealed the direction that News Corporation (NYSE: NWS) plans to take in the coming years. His key quote:
“In the business of ideas, which is the business that we are in, we do think journalism plays a role, and we do think there are business models there that will make a lot of sense, albeit perhaps not at the scale of some of our broadcasting businesses and other entertainment businesses.
“Is it going to be as big a role? No. Structurally, television is vastly more profitable and a big opportunity.”
First, notice that he views “ideas” as the business and that when dispensing those ideas the aim is to maximise profit.
Then take a long breath and consider the reality he presents of a future in which a company run by the world’s leading newspaper owner, father Rupert, is expecting that papers will play a subsidiary role in future.
For Murdoch fils, former head of BSkyB (NYSE: BSY), pay-TV is where the money is, which means building audiences in western Europe and India. Presumably, the content will be full of those ideas.
He also did some News Corp charging-for-content propaganda, explaining that the company expected to have smaller audiences for online news when it starts charging readers next spring. You betcha!
We are still led to believe that from early next year News Corp will sell online subscriptions for The Times, as its editor, James Harding, also indicated on Tuesday..
According to Jimmy, the company was aiming to develop a wholesale market for its digital news. He said: “We are actually going to be charging a premium price for them [digital activities].
“We will have a smaller audience than giving it away for free, but I think it is the crucial step in starting to develop a wholesale market for digital journalism.”
Or, seen from another perspective, a crucial step in developing a model that will have so few subscribers it will not turn a profit and such a small audience that advertisers will shun it. Meanwhile, digital users the world over will wonder why a former media visionary has lost the plot.
This article originally appeared in Â© Guardian News & Media Ltd..