Murdoch: ‘the ad model is dead’

Rupert Murdoch has used his most recently acquired newspaper, The Wall Street Journal, to once again rhapsodize on what are presently his two favourite subjects: paid-for content and the deregulation of the media industry. Murdoch, chairman and chief executive of News Corp, makes the comments in an editorial running in today’s issue.

In it, Murdoch stresses the importance of a free, popular press, criticising newspapers that win masses of journalism prizes but have falling circulations. He says that even if there is another advertising boom, newspapers can no longer rely on the revenues that once propped them up, namely classified ads. “The old business model based mainly on advertising is dead,” Murdoch writes. “Let’s face it: A business model that relies primarily on online advertising cannot sustain newspapers over the long term. The reason is simple arithmetic. Though online advertising is increasing, that increase is only a fraction of what is being lost with print advertising.”

He is also heavily critical of websites that derive their content from other news sources “without contributing a penny to its production”. In the past, Murdoch has hinted at tackling the issue of the doctrine of fair use and in this editorial he is more blunt, saying: “Their almost wholesale misappropriation of our stories is not ‘fair use’. To be impolite, it’s theft.” On the bright side, he says that the future of journalism is ‘more promising than ever’ — but essentially only if other publishers get on board with his paywall scheme. This would overcome what is emerging as one of the main hurdles in getting readers back into the habit of buying news: who will pay for something when it is available elsewhere for free? Murdoch responds to such criticism in the piece saying that he believes people will pay for content if “we give them something of good and useful value. Our customers are smart enough to know that you don’t get something for nothing. That goes for some of our friends online too.”

At the same time, Murdoch manages to squeeze in a few words on the issue of government regulation of the media, saying that “the best thing government can do is to get rid of the arbitrary and contradictory regulations that actually prevent people from investing in these businesses”. Murdoch has been critical in the past of US rules on media cross ownership. In the UK, he is concerned about the reach of the BBC. His article is an adaptation of remarks made to the Federal Trade Commission last week


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