All News Will Be Paid For, Says Rupert Murdoch

By August 06, 2009

Rupert Murdoch's new recession strategy was announced today - the chairman of News Corporation wants to get paid for all of the online content of his newspapers and television news channels. The company's recent fiscal history provides the necessary context. According to the Financial Times, News Corp had a fourth-quarter net loss of $203 million. Fox Interactive Media cost them $680 million in "impairment and restructuring changes." FIM's MySpace social networking site cut more than seven hundred jobs in the same period. For the full year, News Corp suffered a net loss of $3.4 billion, down from their net income of $5.4 billion the previous year. That makes up a revenue difference of $8.9 billion.

The staggering shift in numbers from black to red makes Murdoch's comments seem unsurprising, or even inevitable. Still, it is a remarkable change of heart from a few years ago when his idea of a business model was free, advertising-supported content for users.

The affects would be wide-reaching with Murdoch's international panoply of periodicals: The Wall Street Journal, New York Post, and many more national and local newspapers in the US, UK and Australasia.

Newspapers like the Wall Street Journal currently have two access models: a free, limited-content site, and a premium site for subscribers. Murdoch told the Business Spectator today that News Corp is currently developing a pay model for online content this financial year.

"We intend to charge for all our news Web sites," Murdoch says in CNET this morning. "If we're successful, we'll be followed by all media." Certainly, if Hulu visitors are willing to pay for what is now free video, other content providers will be changing their models very quickly.

The move is a bit of a gamble, but Murdoch believes it is an inevitable one. "The extended downturn has only increased the drumbeat for change" Accordingly, the recession is killing free news content, not him. But if he succeeds, it may be News Corp making a killing.

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