Michael Wolff writes:

Is Rupert Murdoch too old to matter? In the face of the worst downturn in the history of the newspaper business — what everybody except Rupert believes is a structural rather than cyclical decline — he bought the Wall Street Journal, built the world’s largest newspaper printing plant just outside of London, and is still talking about buying the New York Times.

Yesterday, his company, News Corp., posted the biggest losses in its history.

In response, my Uncle Rupert — who as recently as a year ago, when we last spoke, had yet to go, unassisted, onto the Internet — announced that he would shortly make his newspapers available online only if you paid for them.

Well, I’ll say this, he’s swimming against the tide.

His uphill fight is probably even greater than it might appear. Not only is he, among all media executives, the most technically disinclined (actually, totally illiterate), but his company, of all the big media enterprise, is the most technically backward and maladroit. He may now employ more reporters than anyone else in the world, but they use the oldest computers.

He may have some of the world’s most trafficked news sites, but they are also the slowest and most inept. Technology, at News Corp., has always been regarded as one of those things, like fancy hotels, or long-form writing, that are not part of the company culture.

Nor is Rupert suggesting, at this point, a turnaround in that culture. He is not, all of a sudden, going to spend hugely on technology upgrades.

Instead, what he is going to do is the thing he has always done: buck convention, offend sensibilities, and not pussyfoot around. “I believe that if we’re successful, we’ll be followed fast by other media,” Murdoch said yesterday — which has pretty much been his method of operation in the media business. By force of will and clarity of position, he defines the world.

What’s more, he believes this new world, like the older one in which he succeeded, is a tabloid world: “When we have a celebrity scoop, the number of hits we get now are astronomical,” he said, unmindful that his scoop, on the Internet, is a second away from being everybody else’s scoop. “We’ll be asserting our copyright at every point,” he added, like a man getting ready to go to war (say in Iraq or Vietnam).

My book about Murdoch is called The Man Who Owns the News because owning the world’s biggest news business is exactly what he set out to do, and because that is pretty much what he achieved. There is, simply, no one who produces more news than Rupert. Quantity is what he does. On this basis and with this approach, he is now losing his shirt. But he cannot conceive of the world in any other sense than one in which his news outlets are not the most emphatic and powerful and lucrative.

Read the rest at Newser.

Meanwhile, Alan Kohler writes:

It is tempting, and easy, to ridicule Rupert Murdoch’s announcement that News Corp intends to charge for online content as the cough of a dying oligopoly, and that’s been the general reaction.

“It’s a gift to the competition”, said the London Telegraph. “Murdoch to Charge for News Online ‘If We Ever Publish Any'”, was the headline in the Huffington Post, one of his nemeses.

The self-destruction of newspapers has been a tragic tale of inattention and hubris, and only the first of those mistakes seems to have been overcome voluntarily.

Enthusiasts inside all the newspapers put up websites of their stories 15 years ago and persuaded their bosses that the advertising would come and that life would be great.

But it didn’t, or not enough of it did. And at the time the industry leaders like Murdoch were not paying attention anyway — they were too busy spending the newspapers’ cash flow on other things. Now they have discovered that it was actually the impending death of their business models to which they weren’t paying attention.

But then again who was to know that the price of online advertising would settle at about a tenth of the price of print advertising?

This is, after all, a classic business event: a technological change that causes a price reduction. And the result is always the same — lower costs.

While absurdly high print advertising prices have subsidised large editorial budgets, and low or zero cover prices, it won’t do it online.

Could the newspaper cartel have survived for longer had they got together at the beginning and put a “cover price” on their websites? Possibly, since in those early days there was little or no online competition. But at best that would have simply delayed the reckoning, because a tsunami of competition was always inevitable.

Anyway, the thing that’s really killing the traditional media is not the fact that online content is competitive and free, as Rupert Murdoch seems to think. After all many of his newspapers — suburbans and commuter rags — are already free, and where they exist cover prices go nowhere near covering the cost of the product.

Read the rest at The Business Spectator.

Peter Fray

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