No news is good news
January 2010
There’s an excellent row brewing about how we read newspapers online - or rather, not how, but how much we should pay. It’s a subject I’ve covered before, but it is worth another look - the pace is hotting up.
First, a little history. When the internet was young (only about a dozen years ago, believe it or not) everyone was blindly trying to join the gold rush; newspapers were no exception. At the time, they could think of nothing better to do than to repeat their printed version online, available free to all.
And so it has remained, more or less. You can still read newspapers from everywhere for nothing. In fact, it costs them money to let you see them. Have a look at www.thepaperboy.com; they list over six thousand online newspapers, and very few will charge you anything. There may be some advertising, but that income is negligible, and certainly doesn’t cover the website costs.
This has never made much economic sense. Many realised it from the start; I recall a senior newspaperman being asked (ten years ago) why his paper had started giving itself away online; he said that it was “because we are mad”. Not far from the truth; the trouble is, they have not become any saner.
As usual, however, it is the tough guy of the industry, Rupert Murdoch, who has been grasping the nettles. He has tried to charge people for access to his online newspapers, but people just won’t pay. There are too many free alternatives.
Cunningly, therefore, he has shifted his focus. Having failed to attract the mass market, he is going for the deepest pocket. In this case, Google.
He knows that the more people that use Google, the more Google can charge their advertisers. However, he also thinks that users might drift away from Google if they thought it was only listing part of the internet.
So, Murdoch says, why shouldn’t Google pay him to be allowed to list his very popular sites? He is not in business to help Google - and if they don’t pay him, he says, they are effectively “stealing” his content for their own commercial benefit.
It’s a fair point, and when you realise that preventing Google from listing any of his sites is the trivial matter of adding a few lines of magic computer code to each website, you realise that he is probably about ready to have his bluff called.
Google, of course, counter that they act as a free service that drives people to Murdoch’s web sites, and if he can’t find a way of lifting money from us once we are there, that’s his problem and not their fault.
Both arguments have weight, but I wouldn’t bet on Murdoch losing this scrap, especially against the “do no evil” idealists who run Google. There are already rumours that he is close to a deal with Google’s main rival, Microsoft’s www.bing.com, under which Microsoft will pay Murdoch to be allowed to list his websites. In return, he will prevent Google from listing his sites at all.
Two questions arise from this. Firstly, will the money Murdoch is paid by bing be enough to recoup any online advertising income he will lose if his website viewing numbers drop? Secondly, will this sort of deal reduce Google’s user numbers - and wound the extremely golden goose that is their advertising revenue?
Whatever happens, the newspapers cannot subsidise their websites for ever, and the newspaper publishers know it. The Daily Telegraph, for example, has just announced that the Editor (lauded for the MP expenses scoop) has been promoted away from the print edition to head a new digital “entrepreneurial unit” in an office that isn’t even in the same post code as the journalists. His job will be to “capitalise on cutting edge ideas” and drive “new revenue streams“. Good luck to him; he has his work cut out.
It is clear that the owners of The Telegraph have read the same writing on the same wall that Murdoch has seen. Like him they know that if they can’t find a way to reach into our cyber pockets somehow, they will all gently bleed to death.
