News Corporation's Rupert Murdoch: "The current days of the Internet will soon be over."
(Fred Prouser/Reuters)Photos (1 of 1)
Murdoch: No more free lunch, and no Kindle love
By Andrew Heining | 05.07.09
Rupert Murdoch doesn’t like this whole “giving stuff away” business.
The chairman and CEO of mega media conglomerate News Corporation told reporters and investors on an earnings call Thursday that the days of websites giving away content are numbered.
Citing the success of his company’s Wall Street Journal, Mr. Murdoch said that he saw no reason why its model couldn’t be applied to more sites.
“That it is possible to charge for content on the web is obvious from the Journal’s experience. We are now in the midst of an epochal debate over the value of content and it is clear to many newspapers that the current model is malfunctioning,” he said.
The Atlantic’s Conor Clarke isn’t so sure Murdoch’s claims hold water.
There is one big difference between the Journal and just about every other newspaper in the country: Businesses are willing to pay for the Journal. You can invest on the basis of the information in the Journal. Which means you can buy a subscription and charge it to your corporate account. But for some reason I doubt that corporate America will be willing to pick up the tab for the New York Post or one of News Corps other fine journalistic offerings.
The Journal’s paywall-protected website (which, incidentally, released its own free iPhone app in April) is one of the few newspaper sites to find success with a subscription model. The New York Times shuttered its Times Select premium service in 2007, two years after its debut.
Murdoch said he expected other News Corp. sites – which include, among others, the New York Post and Britain’s Sun and Times – to begin charging for access in the next year.
Kindle? No thanks.
The other bombshell from the call came when Murdoch announced that his company’s content wouldn’t be finding its way to the Amazon Kindle, tech’s “it girl” of the moment.
No way, no how, said Murdoch:
I can assure you that we will not be ceding our content rights to the fine people who created the Kindle. We will control the prices for our content and we will control the relationship with our customers – any device maker or website which doesn’t meet these basic criteria on content will not be doing business long-term with News Corporation.
Translation: Amazon is asking too much for the privilege of selling subscriptions on the Kindle.
As Staci Kramer reports for Paid Content, Dallas Morning News CEO James Moroney told a US Senate subcommittee hearing on the future of newspapers that Amazon wanted 70 percent of Kindle subscription revenue from his paper – and the right to license the content elsewhere – in return for being available on the device.
As Peter Kafka points out for the Journal’s Media Memo, that ratio – 70 percent to the publisher, 30 percent to the content provider – is the inverse of what Apple offers artists who sell their music on its iTunes music store.
A Kindle challenger?
At a cable industry conference last month Murdoch expressed interest in investing in an e-book reader to compete with the Kindle. He reiterated those plans on Thursday’s call.
What do you think? Are you willing to start paying for more content online? Do you want to subscribe to newspapers on what up until now has been called an e-book reader? Share your thoughts in the comments.
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2. jack | 05.07.09
I have no respect for Rupert Murdoch. Media conglomeritization is a horrible drain on our culture, and a barrier to the possibilities of our democracy. It scares me that one man has so much control over such a vast quantity of information. I recommend watching this video, it really enhanced my understanding of the issue with conglomerates:
3. Richard Gorman | 05.07.09
I find I must ask, are the e-books really that popular? Maybe I hang out with the wrong crowd but I know only one person who owns one. My friends read books, paper type books. None have expressed the least interest in obtaining a Kindle, though most of them use cell phones, GPSs, giant screened TVs, TIVOs, etc. with alacrity.
Maybe Monitor readers all have them and my statistical sampling is way out of whack. Just wondering aloud, how many of you in Monitor land are dying to get or have a Kindle? I’m afraid I find looking at a screen that glows at you rather tiresome after a while and I beat a hasty retreat to the garden and some verdant scenery.
4. ABV | 05.07.09
We have no choice but to start paying for online content. Otherwise the content providers will go out of business.
5. Jerry McIntire | 05.07.09
No, I’m not going to pay for content, not even the WSJ. Murdoch’s attitude will go the way of the dinosaurs, along with the oversized, centralized media outlets with which he has built an empire. The empire is going down. Decentralized information sources, energy sources, food sources, on and on, are coming. They are not going to “take over,” they are going to quietly replace the status quo by surviving more easily and delivering what people really NEED.
6. KC Bruce | 05.08.09
I’d be willing to pay for content online. I like the high quality of some papers and magazines and want them to continue to produce that quality.
I also own a Kindle–and yes, I’d be willing to pay for the right subscriptions on that device, too. It’s convenient to download material; I like that I don’t use trees for paper; and we get to skip the US Postal Service for delivery.
But I would also like to see competitor devices come out. Kindle is expensive and has some limitations.
I think content providers ought to take the lead on this: create a standard electronic form that can play on multiple devices–sort of an MP3 format for content. Then one device manufacturer won’t be able to control the prices.
8. Daphine | 05.08.09
I suspect Murdoch has it reversed - as more of the Journal’s raw content becomes available elsewhere it will face the same dilemma - what’s its value added.
9. phil | 05.08.09
Yeah, I need color in the books I read. I hate it when the W’s aren’t blue and the X’s aren’t green. Plus, what’s up with the Kindle not allowing me to play video games in the middle of a book? And I need the exercise of 4,000,000 page scrolls while reading from my backlit phone - recharging it every two hours is not a problem for me. The backlighting doesn’t cause me headaches all THAT often . . . . And why can’t I get instant messages while I’m reading?
10. Mary Dyer | 05.08.09
Murdock is typical corporation bottom line oriented.
in an era net spendable income for many people are plunging to new lows, and despirately seeking ways to pinch penny, hard scrabble, tightwad cash outflow down for outgrow to meet lowered income.
File that one under the almost $500 new Kindle sales pitches to public library opatrons who welcome the local rural library “dirty book” sales.
a “dirty book” being gently used ones donated to the public library periodic used book sales.
and in cash shy rurual america, people are very good about passing their current best sellers, and popular newest ones on to others who can afford one dollar for a current gently used best seller.
but couldnt even think about adding a $500 reading gadget to their credit card balance, even if they still have and use such a thing from time to time.
11. william deane | 05.08.09
Big business is relentless in its drive to take away our free internet. Case in point, the recent attempt by Time Warner to establish an internet usage charge. The Rochester, New York test case failed this time because of a strong public backlash, but the fight is just beginning with the conglomerate declaring, “we’ll be back.” The goal of Rupert Murdoch is clearly expressed in the Andrew Heining article. The strategy to quietly hit one community at a time will unfortunately prove successful if the majority of the public isn’t aware and ready to protect our relatively free internet.
12. Mary C | 05.08.09
I hang out with an under 35 crowd and,frankly, I’ve met few interested in Kindle.My concern with Kindle is having all my reading habits on record, and eventually monopoly that’ll squeeze out independent book publishers and control what’s available. I foresee a Kindle as the forerunner of an invaluable Big Brother tool.New trees will grow, but what about all those discarded Kindle batteries that’ll eventually end up in a dump somewhere?
13. Tom | 05.08.09
I already pay for internet access. But, would be willing to pay for some content on-line if it was valuable enough to me. I would definitely not pay for all.
I believe the mixed model of pay for some content, other supported by ads, and other free will prevail.
14. Myron E Zorger | 05.08.09
I will put up with the ads and pull downs for my news. Here in the desert, news print is just about gone! It was great for wrapping up fish guts at one time, but the fish have gotten toxic, so I don’t need neither anymore!
15. Ruth | 05.08.09
Rupert Murdoch is the typical greedy greedy CEO. I understand why people pay to read the Wallstreet Journal, but he is just a controlling old man who is actually behind the ball at this point in time. Money and power have a way of making absolute fools out of some people.
16. Andrew | 05.08.09
Years ago I used to buy just one paper to read every day, but now with the internet I can read a wide number of papers from many countries.
I don’t even read the local papers here in Australia any more because I’ve found better quality online papers. I read ‘papers’ from Britain, Canada, Europe, USA, New Zealand, Israel, Asia, etc. Why would I pay a subscription for just one online paper?
That’s why Murdoch’s plan will fail - it can only work if you want a specific paper that you can’t do without, which is why the subscription service for the WSJ has worked - it is required reading for a group of business people.
After coming home from a recent holiday to Britain I did consider paying for a subscription to the London Times which is my favourite paper, but then found out Murdoch owned it, and just couldn’t do it…
17. TBRech | 05.08.09
I like WSJ, but I am not going to pay the prices they charge for online content. If Murdoch can make more profit without the average person, more power to him.
There are other places to find worthy information and news.
18. a blog about whatever | 05.08.09
the next natural step is for people to eventually read newspapers on their mobile phones and mini notebooks. phones got quite small for a while, now the screens are getting larger. and computers are getting smaller.
the kindle is just amazon rearranging chairs on the titanic. nobody needs yet another device to lug around.
19. Shawn | 05.08.09
I remember when very quietly a law taken off the books, so to speak. Now a Corporation (Mr. Murdock) could own as many Radio and Television stations as they want. If you live in Florida for example, almost all TV, Radio are owned by Murdock. So, the news you get is going to be… Kinda reminds me of Soviet Union.
20. Silvia Wilson, in Korea | 05.09.09
Rupert Murdoch is a classic 19th-century tycoon, like Cornelius Vanderbilt. He has shackled the free press in every country where he has purchased newspapers. “Faux News” is not a clever parody like The Daily Show; Fox is warped to reflect Murdoch’s politics. I avoid Murdoch’s media like the plague.
21. LibertyNews | 05.22.09
If Amazon doesn’t play its cards right it will be usurped by an open sourced dirt cheap easy to use and wireless e-reader when it comes onto the market. What they need to realize is the the reader is a platform, you want to get as many people on board before you start having competition. By selling the Kindle for $300+ they are losing time. They should be trying to give Kindles away and make their money through paid subscriptions much like a cell phone. Get a free Kindle with paid subscriptions that amount to X dollars a month or X amount of pre-paid book account. I for one would like to create my own personal newspaper on an e-reader that I created with the Feedjournal through RSS feeds- Check it Out-
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1. Dennis | 05.07.09
So, Amazon has come out with another (ho-hum) black and white screen Kindle, and some publishers aren’t falling all over themselves to be included. Once a competitor to Kindle comes out with a hi-def, color screen, Kindles will sit in a wharehose somewhere.