Murdoch: Get Ready to Pay for Our Stuff Online–But Not on a Kindle
by Peter Kafka
Posted on May 6, 2009 at 3:33 PM PT
Charge people who want to read stuff online? Heresy in the media world until recently. Now everyone is noodling with it.
And News Corp. (NWS), whose Wall Street Journal has long required a subscription for full access to stories, is among the most most aggressive. During his earnings call this afternoon, CEO Rupert Murdoch said he planned on exporting the WSJ’s online pay model to other News Corp. sites.
“We’re absolutely looking at that,” Murdoch told a reporter. Expect to see movement on some of his stronger properties “within the next 12 months,” he said.
But Murdoch also made it clear that he doesn’t plan on selling his content via the Kindle, as publishers like the Washington Post (WPO) and the New York Times (NYT) are doing. Here’s part of his opening remarks:
That it is possible to charge for content on the web is obvious from the Journal’s experience. We are now in the midst of an epochal debate over the value of content and it is clear that, for many newspapers, the current model is malfunctioning. We have been at the forefront of that debate and you can confidently presume that we are leading the way in finding a model that maximizes revenues and returns for our shareholders.
I can assure you that we will not be ceding our content rights to the fine people who created the Kindle. We will control the prices for our content and we will control the relationship with our customers–any device maker or website which doesn’t meet these basic criteria on content will not be doing business long-term with News Corporation.
What’s that all about? During the call, Murdoch reiterated News Corp.’s interest in investing in a Kindle rival, though he insisted it would be relatively small, and that the company is “neutral” about different mobile platforms–”we’re not appliance makers.”
Presumably there are some specific issues News Corp. has with Amazon (AMZN), but I have a hunch that this is one of those cases where it’s straightforward: News Corp. wants to control the price of its content, and it wants a direct relationship with its customers, and Amazon doesn’t allow that.
UPDATE: This PaidContent story spells out one problem: Amazon is demanding 70% of revenue from digital subscriptions it sells, at least from papers the size of the Dallas Morning News. That’s the inverse of the ratio at iTunes, by the way: Apple keeps about 30% of each transaction and the content owners get the rest. Presumably big players like the Times, the Post and News Corp. could cut a better deal, but Murdoch would want the lion’s share of revenue, and Amazon seems unwilling to give that up.
I also assume that the company is wary of repeating the music labels’ iTunes error, which has led to Apple’s stranglehold on the digital music market.
Then again, Murdoch also boasted about The Wall Street Journal’s new iTunes app, which he said been downloaded 360,000 times in the few weeks following its release. And last time I checked, Apple (AAPL) kept a pretty tight grip on its iPhone apps. So perhaps one of my corporate cousins–News Corp. owns Dow Jones, which owns this site–can explain the difference.
[Image credit: billjacobus1]
Comments
360,000 downloads is nice. Our dictionary.com at Ask.com app has been downloaded 1 million times, we all got a cake. Iphone apps are hot. Anyhow I’ve always thought that the best way to monetize online content is via a third party subscription service, sort of how a cable tv company works. The subscriber pays the cable tv company for packages of various content, instead of having to give every other magazine and newspaper their credit card info and manage monthly subscriptions etc.
Posted by Bjorn Tipling at May 6th, 2009 at 7:46 pmI don’t mean the cable tv company provides this service, I meant that a service similar to the model a cable tv company uses, but I guess it could be the ISP. That’s how ESPN rolls.
Posted by Bjorn Tipling at May 6th, 2009 at 7:48 pmThe WSJ has really been pushing the iPhone application, sending messages about it to owners and iPhone sites. I think it is because most iPhone owners are fairly well-off, as is normal for Apple’s customers.
However, there is an odd twist. Many of the iPhone participants in the WSJ forums are better educated and more liberal than the far Right, ‘don’t know much about history’ demographic that has dominated the forums. The old-timers are trying to run the new people the iPhone app attracted out by claiming we are “on welfare.”
Posted by June Gordon at May 7th, 2009 at 6:10 amThe WSJ has really been pushing the iPhone application, sending messages about it to owners and iPhone sites. I think it is because most iPhone owners are fairly well-off, as is normal for Apple’s customers.
However, there is an odd twist. Many of the iPhone participants in the WSJ forums are better educated and more liberal than the far Right, ‘don’t know much about history’ demographic that has dominated the forums. The old-timers are trying to run off the new people the iPhone app attracted out by claiming we are “on welfare.”
Posted by June Gordon at May 7th, 2009 at 6:11 amYup. Which is why every entertainment subscription service has always tried to get itself embedded with cable or telco. But those guys have been reluctant to sign on — though they might very well do one of their own some day. See, for instance, Time Warner and Comcast’s online video plans.
At the same time, note the ever-present drumbeat of complaints about cable’s bundling plans and who insist they want to buy their programming a la carte.
Posted by Peter Kafka at May 7th, 2009 at 6:40 am