Newscorp’s Price Barriers and The Survival of the Wall Street Journal – by “Alexander F”

Newscorps Head Honcho: Rupert Murdoch
Newscorp's Head Honcho: Rupert Murdoch

At a recent symposium in Washington DC, media mogul Rupert Murdoch told a room full leaders in academics, economics, and multimedia that “There’s no such thing as a free news story.” While as a blanket statement this is clearly blown far out of proportion, for big media, this is the sad but true reality.

The fact of the matter is that the vast majority of news available right now IS free for viewers to read. Besides the cost of perhaps an internet connection, a person can freely access news sources from around the world, and can frequently access free version of print news that actually costs money in the tangible realm. Mr. Murdoch is trying to change all of this though. In a recent announcement, Murdoch disclosed that a new arrangement is being made between Microsoft and one of Murdoch’s media properties, The Wall Street Journal. In this deal, Google would no longer be able to sift through the WSJ’s articles and Newscorp (The parent company to the WSJ of which Murdoch is at the powerful reigns of) would allow Mircosoft’s new search engine Bing to have the exclusive search rights to their content….for a fee.

Now Newscorp is no stranger to internet pricewalls. The Wall street Journal itself actually is probably one of the most famous cases of an online news service requiring a fee for full access to its articles. Interestingly though, on the WSJ’s website, only the first two paragraphs or so are visible for “paid” articles if you don’t have the subscription fees, and as of a few months ago, Google had a loophole. If you copied and pasted the URL of the article into Google, the article could be read in whole. Clearly this was fueling some distaste between Newscorp and Google, and although Google has recently updated its “free click” policies in order to put more power into the hands of publishers, it seems to have been just a little too late.

But why start putting in pricewalls and exclusive search rights? Arianna Huffington, also at attendance for this symposium, eagerly dismissed Newscorp’s search engine dealings. In fact, she was even quoted as saying that “Promiscuity is not a good thing in relationships but it’s a great thing in news,” during the course of the two day event. While all of my touchy feely side wants to agree with her, it’s a little irresponsible to jump entirely on that bandwagon.

Unlike The Huffington Post, Arianna’s internet news source, The Wall Street Journal for instance actually pays its writers. There is no way in the foreseeable future for the WSJ to survive on a selection of “citizen journalists” and celebrities who either want to promote social ideals or get some published recognition. To do some of the things that the WSJ does, it costs substantial amounts of money, and with online ads not being nearly as profitable for newspapers as perhaps a full-page ad in their printed counterparts, many are struggling to make sure that they can financially survive. The managing editor of the WSJ, Robert Thompson even said recently that for the Journal to make all of its content free online, he’d estimate that it would cost the jobs of around 300 reporters for the news source. With this constraint in play, it’s nearly unforeseeable for some news sources to continue to function online entirely for free.

So this leads to the burning question, how much of the internet’s journalistic core will succumb to forcing some fee to be charged for its service? It seems as if much of it will be determined through the nature of the reporting and its costs. Huffington Post’s celebrity commentary on global events costs next to nothing while the WSJ’s investigative dive into something like international money laundering may cost quite a pretty penny. Since we felt comfortable so long with paying for the print news before the internet, why should the internet, a communication tool, instantly make some previously costly content absolutely free? It’s a question burning on the minds of big media as it struggle to make ends meet, and the future associated with it may start to show that in some cases, there may not be such a thing as a free story.

2 thoughts on “Newscorp’s Price Barriers and The Survival of the Wall Street Journal – by “Alexander F”

  1. i thought eric schmidt’s op-ed in the WSJ was interesting: http://online.wsj.com/article/SB10001424052748704107104574569570797550520.html

    but i thought gigaom’s rebuttal was even better: http://gigaom.com/2009/12/05/does-google-even-understand-what-news-is/

    “Serving readers news based on what they’ve read can lead to a kind of tunnel vision where they’re insulated from the dissenting views and unpleasant truths. Newspapers emerged to serve communities, and communities are inherently hotpots of dissent. Targeting news stories as if they were advertisements runs counter to that important service. I want a news gadget bringing me stories that make me uncomfortable.”

    Like

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