Deciphering Murdoch: Look for All-Access Pricing

Includes: NWS, NYT
by: Ken Doctor

Face it. We're in a time that seriously lacks oracles. So, apparently, Rupert Murdoch passes for one, given his well-chiseled mien and occasional wont to make pronouncements.

Now he's making a bit of midsummer news, with still another comment on charging for news:

Quality journalism is not cheap. The digital revolution has opened many new and inexpensive distribution channels, but it has not made content free. We intend to charge for all our news websites....We're hopeful we can build significant revenues from the sale of digital delivery of newspapers, news content.

It recalls one of Rupe's early pronouncements, declarations often requiring translation, as he pursued the Wall Street Journal: "The value of financial journalism, high-quality financial journalism, is you can charge for it."

Yes, you can. Rupe didn't prove that. The crews at the Journal and Dow Jones, and at the Financial Times, did. As Staci Kramer has pointed out, WSJ indeed charges for it, and confusedly, employing the many sleight-of-hand circulation marketing tricks long employed in the industry. Indeed, business and finance journalism can be charged for; that's not news.

It's been a simple truism: where money changes hands -- investing, buying, selling -- people are more willing to pay for related news and information. Business and finance are the easiest to see, as is Consumer Reports' successful model. We should be seeing similar success in world-beating travel and health sites -- lots of money in both -- but we haven't seen products that will get many of us to yet open our wallets.

But, news, good old "general" news or the "scoop journalism" that Murdoch has long extolled? There's little evidence that people will pay for news in a burgeoning news environment, where the amount of "good-enough" news grows daily. Think start-up sites from the Politicos to the Voices of San Diego, public radio (newly ascendant nationally and increasingly locally), commercial broadcasters finally getting the value of online "text".

Murdoch started his comments yesterday with the notion that classifieds will never come back to their previous levels. You can draw the line between that comment and his -- and his industry's -- wish to charge for content. The problem: just because one huge revenue source is finally acknowledged to be beyond repair, that doesn't mean the marketplace will let you open a new cash spigot. The marketplace, in fact, shows little sign of supporting "paid content."

Will News Corp (NASDAQ:NWS) put up a pay wall stretching from the Manhattan's New York Post to London's Times to Sydney's Australian to Suva's Fiji Times and back to Bill O'Reilly Central? I doubt it.

If there's a better realpolitiks player in the news industry than Murdoch, please stand up. If not, Murdoch knows that News Corp putting up a pay wall would be akin to unilateral disarmament -- and that's something only pinkos do. Put up a pay wall when many others (including Reuters, as Chris Ahearn explains in a to-the-point post) improve their superhighways, better to take advantage of the link economy and you'll find yourself with a lonely citadel, a citadel no longer a crossroads in the biggest emerging marketplace of the day, online advertising.

That's not to say News Corp -- and others -- won't charge.

Steve Brill is offering 16 ways to charge, through Journalism Online, the would-be Paypal for news. Some of the 16 will work, though how much new revenue they will generate is the big question, as some publishers sign on.

One approach I find likely for News Corp, for the New York Times and other national brands on this side of the Atlantic and the other, is the All-Access Pass. When you hear Murdoch and other publishers justifiably scream about Jeff Bezos' hard bargain -- he keeps customer relationships and 70% of the revenue -- you understand that they see the multi-platform future becoming real and want to be in the center of it.

We know that most readers expect news and information to be free. That's annoying, but apparently the case. We also know that most of us are quite willing to pay out hundreds of dollars a month in "access" charges, for broadband Internet access, for "data plan" on our smart-as-heck phones, for cable TV.

So expect a few companies to go all-access. As in, you can get all the Dow Jones content -- WSJ, Marketwatch, Barrons -- on any platform anytime, formatted for you, with all your preferences remembered, your stories saved, your shared e-mail lists available seamlessly. For a charge of maybe $5.99 to $9.99 a month. It's not a charge for content. It's a charge for convenience, for access. Sure, sign me up.

My sense is that such an approach will find appeal among 5-15% of readers, as we rely increasingly on smartphones and play with the new e-readers over the next couple of years.

Such an approach wouldn't put up a pay wall -- foreclosing web growth -- but could supply a new revenue stream that's badly needed.