News Corp will charge for newspaper websites, says Rupert Murdoch

[Peikko 1,575]

Rupert ­Murdoch expects to start charging for access to News Corporation's newspaper websites within a year as he strives to fix a ­"malfunctioning" business model.Encouraged by booming online subscription revenues at the Wall Street Journal, the billionaire media mogul last night said that papers were going through an "epochal" debate over whether to charge. "That it is possible to charge for content on the web is obvious from the Wall Street Journal's experience," he said.

Asked whether he envisaged fees at his British papers such as the Times, the Sunday Times, the Sun and the News of the World, he replied: "We're absolutely looking at that." Taking questions on a conference call with reporters and analysts, he said that moves could begin "within the next 12 months‚" adding: "The current days of the internet will soon be over."

Plunging earnings from newspapers led the way downwards as News Corporation's quarterly operating profits slumped by 47% to $755m, although exceptional gains on sale of assets boosted bottom-line pretax profits to $1.7bn, in line with last year's figure.

Dwindling advertising revenue across print and television divisions depressed the News Corp numbers despite box office receipts from Twentieth Century Fox movies such as Slumdog Millionaire and Marley and Me. But Murdoch said he believed signs of hope were appearing.

"I'm not an economist and we all know economists were created to make weather forecasters look good," he quipped. "But it is increasingly clear the worst is over."

He continued: "There are encouraging signs in some of our businesses that the days of precipitous declines are done, and things are beginning to look healthier."

News Corp's newspaper division barely broke even, with quarterly profits collapsing from $216m to $7m year-on-year. Advertising revenue in Britain fell by 21% and Murdoch revealed the Sunday Times is struggling: "It's still in profit, but only just so." The tabloids had fared better, aided by price battles at supermarkets which spend heavily on print promotions.

Television profits also shrank dramatically, falling from $419m to $4m due to a loss of Superbowl revenue and weaker advertising at the group's Fox channels in the US and its Star network in Asia.

News Corp has cut 3,000 jobs over the last year, although Murdoch said very few affected journalists or "creative" personnel. Its filmed entertainment division enjoyed an 8% rise in profits to $282m, while Fox News Channel in the US helped push profits from cable subscription networks up by 30% to $429m.

But News Corp revealed that its interactive media division, which includes the social networking site MySpace, had turned in a lower contribution. MySpace's management was recently replaced as News Corp struggles to build sustainable profitability but Murdoch dismissed competition from its larger rival, Facebook.

"We're not going for the Facebook model of getting hundreds and hundreds of million of people who don't bring any advertising with them at all," he said.

Meanwhile a threat to close the Boston Globe was averted today as its owner, the New York Times Company, struck a deal with the daily's largest union after a week of talks; the 137-year-old publication is the 14th biggest-selling US paper.

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[The_Dude 1,142]

And only WSJ will be able to sustain this business model.

[Heracles 417]

People are used to getting the news for free. It was only a matter of time before people would have to pay for a subscription. With devices like Kindle, iphone etc, this makes a lot of sense.

[Peikko 1,575]

I wouldn't mind if it meant that investigative journalism survived. I suspect though, that what we will get is more of the 'fox news/Sun' variety of journalism. Not happy.

[almaty 19]

there will be a backlash..it have to be across the board to work..all major news source start charging a subscription fee,..the wsj is unique

[Peikko 1,575]

I don't know - Murdoch has a nose for money making. He knows that the people who read/watch his newsmedia outlets are the sort of people who can be persuaded to pay and make it seem as though he is doing them the favour by making them do so. He'll have his media outlets as some kind of media reverse elite that the 'common man' is grateful for. I wouldn't put it past him at all...

[The_Dude 1,142]

I don't know - Murdoch has a nose for money making. He knows that the people who read/watch his newsmedia outlets are the sort of people who can be persuaded to pay and make it seem as though he is doing them the favour by making them do so. He'll have his media outlets as some kind of media reverse elite that the 'common man' is grateful for. I wouldn't put it past him at all...

But with so much of the news being homogenous, how will he be able to sustain this model when there are so many replacements? WSJ is unique in that it was already doing this for quite some time (Before Murdoch bought them). It is considered the standard bearer in its niche and has been for the better part of a century. Why would someone pay a subscription fee to the Sun when they can just go to tmz.com or perezhilton.com?

[Peikko 1,575]

I don't know - Murdoch has a nose for money making. He knows that the people who read/watch his newsmedia outlets are the sort of people who can be persuaded to pay and make it seem as though he is doing them the favour by making them do so. He'll have his media outlets as some kind of media reverse elite that the 'common man' is grateful for. I wouldn't put it past him at all...

But with so much of the news being homogenous, how will he be able to sustain this model when there are so many replacements? WSJ is unique in that it was already doing this for quite some time (Before Murdoch bought them). It is considered the standard bearer in its niche and has been for the better part of a century. Why would someone pay a subscription fee to the Sun when they can just go to tmz.com or perezhilton.com?

Do not underestimate the power of the Murdoch brand loyalty. I don't know why people read these things in the first place, so I can't really say what draws them to be loyal, but they will be. We witness on these very boards the loyalty that some have for Fox news, as if somehow this outlet is the 'lone voice of reason', or Rush. It's like you have to listen to these tirades in order to be able to formulate a fair and balanced opinion on a news story. It's laughable - and yet it's sadly true.

[DeadPoolX 9]

Doesn't really surprise me. The New York Times charges (or rather, requires a subscription) to read the online version of their paper.

[Trumplestiltskin 5,791]

Doesn't the Sun/News of the World already charge for access to its online "archive"?

It might sell to News Group International's dedicated readership, but I doubt very much whether this will attract new readers - certainly not without them offering some sort of incentive.

The danger of course is that other outlets will be watching Murdoch's publications to see how their new business model pans out - and will follow suit if it becomes commercially viable.

As it is - its hard to see how it could be...

[one...two...tree 2,762]

This is the digital age for crying out loud. Newspapers can survive the way network news has.

Amazon just announced the other day, a new version of Kindle:

Amazon's new supersize eReader touted as future of the printed word

[Trumplestiltskin 5,791]

E-Readers have got a long way to go before they take over from printed books.

By rights - printed books should have gone the way of the cassette or floppy disk. The technology isn't really there yet to get people to ditch paper books.

[one...two...tree 2,762]

E-Readers have got a long way to go before they take over from printed books.

By rights - printed books should have gone the way of the cassette or floppy disk. The technology isn't really there yet to get people to ditch paper books.

I think it's future of text. There may always be books, but I think most major newspapers will go digital to survive.

[Dr. A ♥ O 203]

The Christian Science Monitor went all online with their subscribers just to keep their investigative journalism bureau's abroad. More and more newspapers are shutting down one by one and the truth is nobody really knows what is the way of the future.

Edited May 7, 2009 by ~Flower~

[one...two...tree 2,762]

The Christian Science Monitor went all online with their subscribers just to keep their investigative journalism bureau's abroad. More and more newspapers are shutting down one by one and the truth is nobody really knows what is the way of the future.

Corporate media conglomerates have long held a monopoly on mainstream news, but the internet has eroded that monopoly. Getting the benefits of the internet news media through portable devices will be the saving grace for smaller and more independent news sources, which IMO, is a very good step in the right direction.