Friday, November 12, 2010

Both sides of the paywall argument defend their positions in Monoco; James Murdoch advocates for tablet editions

When Murdoch talks, everyone listens, even when it is James Murdoch, Rupert's son. And so all the media news sites are quoting the talk given this morning by James Murdoch, chairman and chief executive of News Corporation, at the Monaco Media Forum.

"If you're going to monetize something, you should probably not give it away for free," Murdoch was quoted as saying by AdWeek.

“You cannot start developing pricing models [for online content] until you have a retail price . . . We are transforming the business of digital journalism at News International."

But so far the results his company are producing at The Times (UK) don't really add up -- at least not yet. Murdoch claimed this morning that The Times now had 105,000 paying customers, but this may include both duplication and single sales. Word is that less than half this number are recurring subscribers. But who knows, like Amazon, the numbers coming out of News Corp. are a little short on detail.

Further, the whole 'content has to be paid' theory begins to fall down the minute you start examining those who are actually making money on the web -- think "Google".

But News Corp. is definitely becoming tablet publishing's biggest advocate. "We go to the iTunes store because it's frictionless. They charge a percentage but the guy on the newsstand and the newsagent charge a percentage, and they don't even merchandise it properly," Reuters reported Murdoch as saying at the Monaco Media Forum.

Murdoch knows the downside, though, but this apparently will not deter the company. "The problem with the apps is that they are much more directly cannibalistic of the print products than the website. People interact with it much more like they do with the traditional product," Murdoch is quoted by Reuters as saying.

The thinking here sounds familiar to me: adopt digital solutions to shrink print production costs. For those free digital products like flipbooks and other replica editions the end result is simply fragmentation. But because News Corp. is betting that their customers will actually pay for access the results could be different -- assuming they are right.

Eric Hippeau, the chief executive of The Huffington Post, begs to differ. "We will never charge our users for content. We would lose engagement with a valuable audience," he is quoted by AdWeek as saying.

“Everyone who has tried to charge in the news category has had a terrible experience. It doesn’t work. News wants to be free.”

To me, this sounds as dogmatic as saying content must be paid. It is simply two sides of the same coin. Both can be right some of the time, and wrong some of the time.

Ultimately, readers will pay for content that they deem financially worth paying for -- the WSJ and Financial Times seem to fit into this category. But paywalls for general news? The track record is not conclusive, but we'll know more about its chances of success after the NYT institutes its metered paywall next year, and Murdoch's Times as a few more months of performance behind it.