Monday, 10 August 2009

Murdoch - No Free News is Good News!

Rupert Murdoch has announced that from next year all of his news outlets will no longer enable users to view unlimited news articles free of charge on the Internet - instead users will have to pay to view.

This is not a new idea. It is one that has been tried before and failed. The Telegraph pioneered news on the web in the UK and initially charged for it - but it didn't work and they like many other news outlets moved to free content supported by advertising.

Murdoch knows this. So what is he up to?

Well I guess having lost £2 billlion this year he figures he is planning to take a lead by first telling the world that he will make his sites chargeable but stretching it out for 12 months to give him time to persuade the other media companies to jump on the bandwagon.

They all have the same problem. Years and years of falling circulation, dwindling ad revenues and increasingly highly used news websites that don't generate sufficient Ad revenue to support the high costs of quality journalism. They all really have to move to a substantially different business model and the easiest way to acheive this would be to simply generate another income stream to replace the lost revenue from selling newsprint.

So, I guess it may be realistic to expect that in the right circumstances, all the major players would all shift to charging users to read the news. And if they all did shift then there really is no reason why people wouldn't buy their news - as they have done traditionally for many years until the Internet popped up and ruined their party.

But one major barrier in the UK would be the BBC. Even if Murdoch did lead an industry wide move to charging for news, what's to stop everyone from simply getting their free news from the BBC? And whilst this is an option, why would the media companies all move to a charging model? - they know that users would just go en-mass to the Beeb. Until every major outlet charges, the new model doesn't really work.

So I wonder if Murdoch is looking for a deal with the Govt (or the opposition) that involves the BBC no longer providing web-based news? Such a deal could be worth a lot to him - maybe even worth the wholehearted support of all his media organisations at the next General Election!

There would be no need to stop the BBC broadcasting news (unrealistic and anyway the news bulletins are often just the 'teaser' that draws the consumer to the web for the detail) but simply to stop them from providing a large free on-line news resource - easily sold as some great tax saving initiative to cut some costs by getting the BBC to charge for this stuff.

It's happened before. Who can forget Kelvin MacKenzie letting it slip that a deal had been done with Blair before the 1997 election.

Could this be the key to a deal in 2009/10? and therefore could this be the key to the next GE?

I think it's a worthwhile theory.

Imagine if Murdoch got the agreement of the Labour Govt (or it's new leader in waiting) and also got the agreement of some of the major media companies to support the Govt, in return for which they made the deal happen. There is no reason why, with a new leader and 3 months of wall-to-wall positive media coverage the Labour party shouldn't win another election..

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