Thoughts on politics and life from a liberal perspective

Thursday, 27 May 2010

Rupert Murdoch's baffling decision

It was announced earlier this week that The Times and Sunday Times online versions would, as indicated last year finally go behind a pay-wall next month. The price will be £1 per day or £2 per week for access to their content.

Now have a quick look at what I did above. I linked to The Times online story about the decision. You can click on that link and go straight through to it within a couple of seconds. Now imagine that it is behind a pay-wall. You'll click on it and will be faced with a demand for money. I expect most people will then not bother going any further. After all there are a plethora of places on the internet where you can read the story for free. In fact it is worse than that. Pretty quickly most people will not bother even linking to The Times online. What is the point when hardly anyone will want to click through the links?

I blogged about the future of newspapers last year and expanded on the above point a little:

The internet is built on links. The system it uses is called "Hypertext Transfer Protocol" (that's what the HTTP you see at the start of web pages means) and hypertext is the traditional name for these links. Google for example uses links between websites to determine their rankings. If you move content behind a pay-wall the first thing that will happen is that your traffic will drop severely. Culturally, the internet is now almost universally seen as a "free" medium and most people are not willing to pay anything at all for content. The second thing that will happen is that people will stop linking to you. At the moment, The Times and The Sun are linked to from all over the place on the web. Once the content can only be accessed through payments, there will be little point in linking to it any more. This will then become a downward spiral as you fall down the rankings of search engines like Google, thus less people know about you, hence less future subscribers.

At the same time as all of this is going on, blogs will be reporting about issues and giving opinion and content to the world for free. Services like Twitter will be used by millions to communicate with each other, indeed it is already rivalling news services as a means of breaking stories (I found out about the death of Michael Jackson for example on Twitter before the BBC had even reported it).

I did a talk on this subject at an Editorial Intelligence event too last year where I explained my views set out in the blog post linked to above. Some of the responses from the audience suggested that I was very wrong and that I should wait and see what Murdoch came up with. He is after all a business genius and was likely to come up with something very clever that finally cracks the problem of paid for content.

I was sceptical but took the point and hence awaited the announcement. And what have we got? About as crude a pay mechanism as I can think of. All content moved behind a pay-wall with a fixed fee of £1 per day (about the same as you would pay for a physical copy of the paper) or £2 per week. OK so there is a bit of discounting for the weekly one but it is still hopelessly unimaginative. There are thousands of news outlets online. Why will people pay Murdoch for access to his when there are so many others available for nothing? He is trying to dictate terms in a game where he now holds none of the cards.

Also, from what I can tell the content is very similar to what we have had with Times online up until now. No great new innovative ideas about how to present the content with mobile apps or easy integration with RSS aggregators etc. Just plain old vanilla online news. At £1 a pop.

Just think about what he could have done though. Imagine if the announcement had been something like this:

Subscribe to Times Online for two years and we will give you a free Apple iPad. There will be a custom designed Times online application pre-installed on the unit which receives push-updates so you will always have the latest Times online on a portable device.

Imagine what a game changer something like that could have been. They could have negotiated a really good deal with Apple who in turn would have seen sales of their new slate go even higher than they had been planning for. It would be a gamble but it would be a truly innovative attempt to shake up the paid for online model. You can then imagine other newspapers teaming up with other mobile device providers.

I predict that within a year or two this attempt to charge people for content will be widely seen as a failure and either the model being used will be comprehensively overhauled or perhaps more likely just abandoned as the pay-wall is brought down.

I hope Murdoch's competitors realise that they will have to do much better than this if they want to retain any sort of online audience.


Kalvis Jansons said...

If you are closed on the net you usually die.

jamescbartlett said...

I think I read they were also removing stories from being aggregated into Google results. Which I find completely baffling. It just means people looking for a news article will never find the Times version let alone getting to the point of paying for it. All they'll do is restrict their potential market to those who loyally read their website everyday and don't use "new" methods of locating news on the internet, article by article, they'll essentially be "off-net" and just there for people who have already decided they want to read the Times online on a daily basis, they won't get any new business whatsoever. It strikes me as similar to the music industry struggling to move away from music being sold in an album format to track by track. Very old fashioned thinking and I really can't see it working.

Jock Coats said...

I have already removed the Times from my RSS aggregator. Since I have little but disdain for self-appointed guardians of whatever, the columnists themselves, I want news, not vacuous comment, so I can get that from other non-pay sources.

Was said...

It was about 1996 when Felix Dennis bought me dinner to ask how Dennis Publishing could make money out of the internet... he was disappointed when I said pretty much the same.

Nothing has fundamentally changed since then and won't unless there is a viable micropayment system. Until then advertising and click throughs are the only relaistic option.

But what does Murdoch know. He cancelled Firefly!

Andrew said...

Good post Mark, Murdoch seems to just be driven by the money and the fear of watching part of his empire slip away (Dramatic i know). I noticed this online article and thought you would be interested. In a nutshull, research is showing that over 90% of users are put off by the prospect of paying.

Dingdongalistic said...


What do you think about models such as the FT's, which apparently hasn't suffered particularly as a result of requiring people to register/subscribe to view full articles?