Rupert Murdoch told News Corporation shareholders at their annual meeting Friday that the business models for both broadcasting and the newspaper business are changing. Citing the success of the Wall Street Journal, Murdoch vowed that News Corp’s newspapers will charge consumers for their Internet content and block Google and other aggregators from cashing in.
In his remarks to shareholders, Murdoch compared collecting for Internet news content to collecting retransmission consent fees for broadcast television.
“Going forward, we will be seeking retransmission dollars from our distributors. Asking cable companies and other distribution partners to pay a small portion of the profits they make be re-selling broadcast channels, the most watched channels on their systems, will help ensure the health of the over- the- air industry in America . We realize this is going to be a tough challenge, but we’re determined to take a leadership position in creating an economic template for the future,” Murdoch said. “And it’s not just the broadcast business. As I’ve said many times over the past few months, good journalism, too, comes at a price. Successful newspapers of the future will charge for their content and aggregators will largely be excluded,” he added, pointing to the company’s WSJ.com as the world’s “most successful paid news site,” with roughly 25 million subscribers.
Murdoch said News Corp. will expand the pay model to its newspapers, referring to efforts just beginning in the UK. But he offered no details on what type of pay model will be used.
The News Corp. Chairman has been talking for months about how to make consumers pay for Internet news content. So far, though, no clear plan has emerged.
RBR-TVBR observation: It all depends on how this model is structured. We don’t think Rupert is stupid, so we don’t think he’s going to try to put his newspapers 100% behind pay walls.
Local newspapers, contrary to what their editors may think, don’t have much that is exclusive, unique or influential. If a newspaper puts up a pay wall in front of its basic local news coverage, most people using the Internet will not pay, but will instead turn to local TV, radio and blog sites offering much the same basic information. Newspapers which choose to follow that foolish approach will be forced to reverse course, and try to rebuild from a weakened position, or simply go out of business a few years down the road. By then they will have become so irrelevant anyway that no one will miss them.
And we must take note of Murdoch’s vow to lead the television industry in forcing cable operators to pay retransmission consent fees. Didn’t Perry Sook already do that? Perry knocked down that wall to win millions for Nexstar, but it likely translates into billions for News Corp. Rupert should at least send him a good bottle of wine.
RBR-TVBR note: We and others hope it works…then many will follow…coming soon – the “FREE” lunch is over as we proceed into a new decade.
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