@ Monaco Media Forum: James Murdoch’s First Rule (With Video)

The Monaco Media Forum isn’t exactly Fight Club but James Murdoch, News Corp (NSDQ: NWS) CEO for Europe and Asia, has a first rule: “First rule — if you are going to monetize something, you probably should not give it away for free.”

The News Corp. heir apparent is keenly focused on that principle, with emphasis on dual revenue streams through advertising and subscription throughout his part of the media empire and on retrans fees in the U.S..A few examples from the on-stage interview conducted by UBS’s Aryeh Bourkoff (we’ll post the video when it’s up):

‘Flagship’ apps: “Our flasgship newspaper products are now the iPad apps,” Murdoch said, and they pose a greater risk. “Tthe problem with the apps is they’re much more directly cannabilistic of the core print product than the web site.” He added, “People interact more. They don’t dip in and out. The key is to get the advertising yields” to be the same. Combine that with the lower production costs, and the business model for apps could be highly attractive.

Retrans: Without referring to the recent dispute that kept Fox and some of its cable networks off Cablevision (NYSE: CVC) for two weeks, Murdoch stressed the company’s belief in retrans fees: “We’re investing an enormous amount in this product and we see absolutely no shame in asking for a better price for it.”

Wrong metrics: Murdoch said when he started to get involved in the digital news side, he was astonished to find the focus on the wrong metrics — the kind that don’t translate directly into money — and a battle with competitors that ultimately was meaningless. “You’re both losing money.” (That doesn’t stop his father, Rupert Murdoch, from gloating over said metrics when he can.)

BSkyB: Why does News Corp. want all of BSkyB? (NYSE: BSY) Murdoch didn’t come at that directly but talked about the opportunities he sees in a business that he still believes is in its infancy, despite being around for a couple of decades.

Cord cutting & programming costs: Murdoch ascribes the recent drop in cable subscription numbers to the round of discounting last year as U.S. cable operators tried to move subs to digital, not to cord cutting. As for going a la carte online, he said people may be surprised by how expensive it could get given how much the programmers spend on content. “There is no new technology that makes athletes not greedy,” he said, piling it on a little by adding that Wayne Rooney doesn’t play for free because he loves football and would skip the sports cars. He couldn’t resist adding, “Computer graphics are supposed to be cheaper. Avatar was not cheap.”