Sunday, May 31, 2009

Rupert Murdoch, the newspaper game, and premium payment for online content

(Above: avoid contracting deadly Dead Sea mud foot by paying for premium newspaper content online).

It's excellent news that Rupert Murdoch believes that there's a future in the newspaper game, and that the business model for the intertubes will involve charging for content.

He showed up on the Fox Business Network last week, and of course the content of his talk was promptly recycled for free, and you can read it here (Murdoch says no to U.S. government newspaper bailout).

“You’re going to have to pay for your favorite newspaper on the Web. [Free content online]…that’s going to stop. Newspapers will be selling subscriptions on the Web. The whole thing [premium content] will be there. The Web as it is today will be vastly improved, they’ll be much in them and you’ll pay for them. (Source here).

Personally I don't get it. News of the fair average kind will still be peddled by free suppliers, like the BBC, and in Australia the ABC, and presumably in America, the likes of NPR, though no doubt they'd all like a little taster if the action gets going, instead of thanking subscribers and people like me for helping them out.

But to make a premium content scheme a success it will require an oligopoly on news supply, a kind of bamboo curtain where free content is proscribed, and free suppliers enter a kind of twilight purgatory for deviant behavior.

Indeed the notion of premium content, which presumably includes the ramblings of the commentariat, whether left or right or somewhere in the middle, was the preferred model for The New York Times, and it failed. 

Unless you're selling vital niche news (as to trades to keep them up to date with professional events, technology etc, or the finance sector, or retailers or advertising about the current state of the game, or statistical information, polls, surveys, whatever), it'll now, in this brave new world of free content, be hard to transfer charging users - as opposed to advertisers - in the shift from hard copy to digital delivery down the tubes.

Where for example would a premium content model leave a tabloid like the Daily Telegraph (no, not the UK paper) which even in Australian newspaper terms is a minnow with only poor average content, much of it online already recycled from other sources in the Murdoch stable. Would anyone in their right minds pay for the rambling hysteria of a Piers Akerman, or pay to join Tim Blair's blog and post a comment bashing greenies, lefties, warmistas and femininists? Therapeutic it might be, but how much to pay for that kind pleasure? 

Considering the rest of the rag offers tits and football in the usual tabloid style, there's nothing much on offer which competes at a higher level than the five minutes it takes to read Murdoch's throwaway railway litter Mx, which is offered free to commuters so they can send a text message to the girl they've been ogling for their half hour train ride.

But even when you come to the premium content of a flagship like The Australian, a lot of the columnist commentariet are just more of the ideological same - whether Janet Albrechtsen, Christopher Pearson or a host of Ian Plimer devotees. Fun to read, but to pay for the pleasure? You can get half baked, uninformed prejudice in thousands of places across the tubes already.

I guess I'm the last person to talk about this, because I gave up hard copy newspapers long before the intertubes became fashionable as a free delivery source. I got my ambulance chasing stories from radio and TV, and paid money for magazines, which could deliver more thoughtful content at longer left - as much as 5,000 or even 10,000 words. Not only was the information more useful, but the articles usually lacked the 'print the controversy' kind of in your face argumentation that currently bedevils newspapers.

We still pay for the magazines, even though they too have shifted a lot of their content online for free. But can or should newspapers attempt to match that kind of content when it's never really been their game - unless you count printing re-hashed, edited highlights from some of the magazines to boost their tired magazine sections (another reason we gave up on newspapers, since the only good stories we read we'd already seen in our magazines). 

Even now, the habit persists in the Fairfax media of re-printing a column from The New York Times when their readership is just a click away from seeing the story on the tubes in its original home, along with a host of other stories. This kind of interbreeding would have to stop if newspapers were start to charge for their content.

Murdoch's right about one thing - the notion that governments should bail out the newspaper game and turn it into some socialistic Pravda-like enterprise would be a disaster for government, newspapers and readers. If they can't survive in the marketplace, they should die, as we're constantly told by The Australian's commentariat is the fate of all dinosaurs that fail to adapt to the changing world and find customers for their goods and services. 

Whatever they do,  newspapers can't become indebted to government - otherwise all the market driven commentariat should as a matter of principle resign on the spot, rather than become conflicted commentators on government press releases.

Will the newspaper game be saved by new technology of the kindle kind? Well not in its current form, but it might help down the track if they devise a more effective reader display, which can display easily downloaded content and resembles a little more the kind of reading experience a newspaper delivers. But Murdoch has already given up on the headlines approach, as delivered to your iPhone:

You’ll be able to get the guts or the main headlines and alerts and everything on your Blackberry, your Palm or whatever, all day long. People need news. Communities live on news about their communities to be able to live and enjoy the world.

But as news descends into a series of twits, what place for premium content, when any twit will do to satisfy a sense of community?

If newspapers attempt to revive charging for content, there will be a leaching of readership to sites which reprint the content (as did one blog I used to visit which reprinted the likes of Dowd and Brooks on a same day basis to undermine the NYT's then business model).

Newspapers will then face up to what the music film and television industries are facing, and the book industry is about to face. When the free model has been out there for awhile, how do you compete? And what do you do about pirates, always eager to supply for free what someone has put a price on, and how to deal with consumers quite happy to pay nothing, even if collectively that causes the death of the things they love?

What everybody wants in this kind of game is a painless way to clip the sheep without causing the sheep any alarm or excessive bleeding - a model that works relatively well for charging road tolls or parking fees at an airport or office workers the cost of making a coffee, but has fallen on hard times for newspapers.

It seems that the newspapers are anxious to revive the good old oligopolist days and have been holding music industry like meetings to try to revive the charging for content game (Shhh. Newspaper Publishers Are Quietly Holding A Very, Very Important Conclave Today. Will You Soon Be Paying for Online Content?).

Just like the music industry gets terribly agitated about piracy, the newspaper game gets terribly agitated about third parties and networks that appropriate newspaper content without paying. They see the way forward as technology or services which can track content on the web and extract payment from these villains.

To which - rather like the music industry's futile attempts to stop the pirates - all you can say is good luck, and don't hold your breath.

Of course the idea that bloggers or downscaled news sites like The Huffington Post could offer the kinds of services that newspapers once did - is fanciful, and yes Virginia, there really is a role for paid professional reporting - but the newspapers were their own worst enemies as they spiralled downwards in the service of new owners, who saddled them with debt while cutting staff and actual quality journalism to the bone. 

As you sow, so you reap. James Warren puts it nicely:

At the behest of new corporate superiors (yes, some from radio), I helped oversee the painful layoffs of about 100 in the Chicago Tribune newsroom last year, before being dispatched by someone the Marlon Brando character in "Apocalypse Now" might characterize as "an errand boy sent by grocery clerks to collect the bill."

Fine. It was now their company. I just wish that what would have ensued might have been a strategy beyond a rather pedestrian one, rife with talk of "relevance" and "utility," with a multitude of lists, consumer reporting and de facto aping of local television; all the while needlessly undermining the loyalty of tried-and-true older readers while chasing after youth. It's less what the late philosopher Hannah Arendt tagged the banality of evil than it is the evil of banality.

Of course, if the newspapers locked the likes of Akerman and Albrechtsen behind pay for premium content doors, this blog would cease in an instant. And frankly the world would be no poorer for all the loons being locked away behind closed days, forcing likely mug punters to part with a few shekels to read them. Let the loons pay for the loons on the pond, I say.

But deep down I have a feeling that newspapers, having already bungled the transition to online, are now in a position like the music industry's failure to read the real meaning of the downgraded quality of mp3's been sent around the world, or the film and television industry's reluctant awareness that, where once avi files could be fitted on a CD, now video TS files are becoming the staple of file sharing sites - and that the botched attempt to force users to upscale to Blu Ray and Playstation, at a greatly exaggerated price to pay for the Sony inspired HD wars, is still blowing in the wind.

What newspapers really face is not a subscriber but an advertiser crisis. Advertisers have worked out they can get more bang for their buck more cheaply online in a host of sites, and they're no longer as interested in supporting old media with their old, hidebound ways and their dwindling market share.

And that's the real problem for newspapers. The crisis in advertising.

They've always kept their hard copy prices down - Murdoch in fact led a series of price wars that reduced the price of newspapers to virtually nothing in Britain as a way of getting rid of competitors - balanced by the notion that advertisers could get their ads in front of more eyeballs as circulation rose. 

Which is why a free handout model has always tempted some in the game, in the way that local community newspapers throw you a copy over the fence, thereby guaranteeing local advertisers that they'll reach their local community. If you could guarantee advertisers that three or five hundred thousand readers would eyeball your ads because they'd been given a free copy, then they might be tempted back.

This is already a model for newspapers trying to hide their failing circulation - head off to the Opera House or the airport and free newspapers fall at your feet like confetti. The trouble is, if you've taken to the intertubes as your source of news and comment, it's a bit like being offered a 4 band 8 transistor radio or a 78 rpm record, a lovely trip down memory lane, but a one off experience - because it's free.

The old game's goalposts have shifted, and any price for premium content online will not alter the failing equation about advertising content and prices. Nor will it help newspapers battle rival suppliers for the job of selling used cars, or real estate or whatever you want to put on ebay. Long gone are the rivers of gold classifieds that kept the likes of Fairfax afloat.

That's why for all the current urgent attempt to get things back on the rails, it'll be sackcloth and ashes for hard copy newspapers for a long time to come, and surely in time - a time comng soon enough - for their demise. And for all Murdoch's confident speculation - finger in the dike style - about the bold, brave new future of newspapers, which coincidentally still make up a large part of his empire, the upheavals have only just begun.

And I can guarantee one thing. The day I pay for the kind of premium content currently on view in The Australian is the day my estate mistakenly took out a subscription to console my partner for the grief at my passing ...

(Below: try doing this with your premium online paid content, a lovely bench which is number fifty one in our one hundred and one silly uses for dead newspapers). 

No comments: