Book trade news is in short supply over the weekends and for this reason on Sundays I often post excerpts from book reviews taken from The Times & The Sunday Times always ensuring the excerpts are brief so that I am not in danger of infringing copyright and always providing a link back to The Times so that visitors to my blog have to visit The Times online to read the full review.
Shortly however this is all going to stop as free access to those newspapers online will no longer ba available.
I was therefore especially intetested to come across the following piece by Matthew Lynn from the Bloomberg office in London. It is worth reading.
Commentary by Matthew Lynn
June 1 (Bloomberg) -- There are a few simple rules that will stand you in good stead in the markets: Buy on the dips. Don’t trade too often. And never bet against Rupert Murdoch.
The Australian-born media tycoon, 79, has railed against the conventional wisdom in a career that has lasted many decades. He has taken plenty of rulebooks, ripped them up and come out a winner.
This month, he will make his most ambitious gamble yet: He will try to redesign the way the Internet and the media work by putting up a “paywall” around two of his British newspapers: the Times and the Sunday
Times.
It’s too late to start charging for newspapers online now. The content isn’t good enough, and newspapers themselves are a product of technologies that simply don’t work in a digital economy. All Murdoch is going to achieve with this move is to kill off one of the most famous media brands in the world.
It isn’t hard to see Murdoch’s motives. The economics of the newspaper business are in a terrible state. Circulations are in steady decline. Their websites don’t draw enough advertising to compensate for what they are losing from their print revenue.
Many papers are now losing money. And businesses that don’t make money don’t survive over time. No matter what they try, most newspapers we are familiar with won’t exist in a decade.
Bold Move
Murdoch has decided not to simply stand by and watch the titles die slowly. Starting this month, News Corp., the owner of both the Times and the Sunday Times, will start charging to access the papers over the Web. It will cost 1 pound ($1.45) for a day, or 2 pounds for the whole week.
It is a bold move. Certainly, anyone who cares about journalism should hope it succeeds. There is little sign that Internet advertising will ever be strong enough to replace the revenue that used to come from selling printed newspapers.
One of Murdoch’s newspapers, the Wall Street Journal, already charges for access to parts of its online edition. But this is the first attempt by one of the big, international, general newspapers to put up a paywall around its whole website. Somebody has to try it, and if anyone could make it succeed, it would surely be Murdoch. The New York Times, one of Murdoch’s competitors, is planning to charge readers next year.
There are several reasons why it won’t work.
Price Is Zero
First, if newspapers wanted to start charging for their websites, they should have started more than a decade ago, when the Internet was emerging as a medium. Once you set a price for any consumer product, it determines what people expect to pay for it. In this case, the price is zero. It will prove impossible to shift that perception now, particularly when there are lots of other news sites that don’t charge.
Second, the product isn’t worth the price. That isn’t a criticism of the Times in particular. Even British highbrow newspapers have placed too little emphasis on substance, and too much on entertaining and exciting their readers.
Sensationalism worked as a strategy in the print world, when you were trying to get people to buy copies in a shop, usually with eye-catching headlines. Online, newspapers aim to build relationships with their readership through subscriptions. That involves creating a higher degree of trust and credibility. Newspapers have spent too much time blaming new technology for their decline and not enough examining what they offer readers.
Old Technologies
Third, it is hard to see a future for traditional papers on the Web. The newspaper was a product of two old technologies: the printing press and the delivery truck. It provided a bundle of news, sport, business, crosswords, television guides and gardening tips, all organized by a single editor. That worked fine for old media, when our access to news was very limited, but is irrelevant now that we can get all kinds of stuff from around the world with just a few mouse clicks.
People will pay for news and entertainment. They always have. But in a world that depends more and more on information, readers are much more selective and no longer rely on the one- stop shops that newspapers have always been.
Charging for the Times won’t change that. All it will do is push the newspaper into a fast decline rather than a slow one. This is the one time it will be right to bet against Murdoch.
(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Matthew Lynn in London at matthewlynn@bloomberg.net
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