All Eyes On Murdoch in 2010

With a global empire stretching across four continents, with assets in television, newspapers, the internet, films and books, Rupert Murdoch always is watched closely.

Murdoch watchers are expected to be even busier in 2010 as the media mogul tries to engineer the biggest structural change in the industry over the past 30 years.

If he succeeds, the media landscape, even the internet itself, could change forever.

“The global financial crisis is a cyclical thing, which passes and moves on, but this one is about structural change,” independent media commentator Peter Cox says.

“I’ve been doing this for over 30 years, and this is by far the biggest structural change that has occurred.”

In a revolutionary move, driven in part by the global financial crisis and the resulting steep decline in advertising revenue, Mr Murdoch wants to change the way people consume news online: instead of allowing free access to News Ltd coverage online — “giving away” the company’s content — and relying on advertising dollars for revenue, Mr Murdoch wants to lock News’s content behind wall that users must pay to breach.

This would create a new revenue model, hitherto attempted only sporadically around the industry. If you want to read stories, watch videos and view photos from News Corp’s newspaper websites, you would have to pay, in doing so providing a new revenue stream for those mastheads.

The chief executive and chairman of News Corporation unveiled his plans in August, saying good journalism “comes at a price”, the aim being to begin charging online readers from June 2010.

By November, however, Mr Murdoch appeared to be less confident that his target would be met. It was “a work in progress”, he said.

“We are working all very, very hard at it, but I wouldn’t promise that we are going to meet that date,” he said.

Mr Cox says News Corporation is on the right track, given that the shift of classifieds from newsprint to online websites has eroded newspaper profits locally and overseas.

“For me, Murdoch is absolutely correct in what he is saying and the direction (in) which the industry needs to go if the industry is going to survive,” Mr Cox says.

“I think the mechanics is what is holding them back at the moment.

“Whether it is subscription or whether it is a micropayment, it needs to be able to happen seamlessly and easily, like we do with our mobile phones.”

The move away from offering free content from News Corp’s newspapers such as The Australian, Melbourne’s Herald Sun and Sydney’s Daily Telegraph, could extend also to removing links to those stories on search engines such as Google. And while other newspaper publishers say they are considering following Mr Murdoch’s lead, few have spoken with the  same conviction as the News Corp chief.

Fat Prophets senior analyst Greg Fraser says most are waiting to see how Mr Murdoch fares.

“The entire industry is once again allowing Mr Murdoch to do all the fighting while they sit back and wait for the results,” Mr Fraser says.

“If he is successful, like he was against the print unions in Wapping all those years ago, then the rest of the industry will simply follow him.”


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