Tuesday, November 24, 2009

Murdoch Swims Against the On-Line Media Tide

Very interesting summary on EPL Talk about Rupert Murdoch's plans to remove his newspaper sites from Google search engines in favour of Bing, in addition to throwing up a paywall on sites like the Daily Mail, News of the World, and most importantly for Marcotti freaks, the Times. Microsoft is paying for the privilege in an attempt to try and overcome Google as the search engine of choice.

Harris clearly thinks the Guardian, which undoubtedly offers the best online product with regard to football, is poised to come out the winner in advance of the World Cup with increased traffic and subsequently higher ad revenue, but this to me is a fundamental misreading of how the internet works. Most football news hounds visit a number of different sites already; the number of exclusive Times Online football readers who would "switch" to the Guardian would be negligible. Most would simply stop visiting the Times while still reading the rest.

But that's beside the point. The free, traffic-based online content model has been tried for some time now, and it hasn't saved print media's bacon. The Guardian is the best online football site in the world, but it is losing money. Harris says if Murdoch, "doesn’t generate the revenues he needs to make, he and his team need to concentrate on how to better monetize the traffic that his sites get." I guarantee Murdoch's people have determined the revenue ceiling on traffic optimization, and they have probably found, like other popular online sites, that even if everyone visited NewsCorp's sites exclusively, the returns on ad revenue alone wouldn't justify the cost of paying his staff to cover the news. Murdoch has the capital to risk a different model, and if the other papers smell even a whiff of success, they will no doubt climb on board, including the Guardian.

Murdoch wasn't being naive when he said the Internet is “an emerging medium that is not my native language.” What he meant to say is that he doesn't do "free." This could explode in his face, no doubt. But if it works, prepare for others to follow.

4 comments:

Fake Sigi said...

Feel like posting a source about the Guardian's soccer coverage losing mone? At least according to Wikipedia the Guardian's online arm was profitable three years ago.

Richard Whittall said...

Let's just say I have a good source on this one...

Fake Sigi said...

Ok, if you say so.

elliott said...

Richard you seem pretty set in stone that the "current print business model" must continue or paywalls will be raised. I think the online model is profitable, just not with the old infrastructure. The printing press put a ton of handwriting monks out of work for a time, but eventually the ease of consumption led to an increase in readership overall etc etc

I believe we are in a "hiccup zone".

Everyone loves the NYTimes baghdad office example, but in terms of my media consumption that is a fraction of a fraction. And as per soccer stories, the media has no monopoly on breaking stories or gathering facts. Any blog can get good tips and sources so, ahem, why pay for Murdoch?