Murdoch decides Sun, Times, NYT, to charge for online news

After the release of their annual figures, NewsCorp have finally announced that they will be charging for news online by next summer.

The figures themselves don't make good reading: a $680 million quartley loss, overall revenues down 7.8%, and a $3.4 billion loss at the end of June, compared to a $5.4 billion profit the year before.

PaidContentUK have some more figures:

News Corp. reported both its full fiscal year and quarter results today—swinging to a loss for both. For FY09, the company showed a net loss of $3.4 billion, compared with net income of $5.4 billion in FY08. Revenues were down 8 percent, to $30 billion from $33 billion. News Corp. took a pre-tax impairment charge in FY09 of $8.9 billion for goodwill and intangibles.

It appears that Rupert Murdoch has chosen to announce his online charging plan on the same day NewsCorp's figures are released. This gives him the opportunity to show a wider content as to why users will soon be paying for material they used to receive for free. From Media Guardian:

"Quality journalism is not cheap," said Murdoch. "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."

The Australian-born press and television baron was speaking as his News Corporation holding company slumped to a $3.4bn (£2bn) net loss for the financial year to June, hit by huge writedowns in the value of its assets, restructuring charges and a dive in commercial revenue.

It seems that David Simon, who created somewhat of a blogosphere storm with his recent article in the Colombia Journalism Review, 'Build the Wall', has got his wish:

If the only way to read the Times is to buy the Times, online or off, then readers who clearly retain a desire for that product will reach for their wallets. And those comfortable acquiring their news at a keyboard will be happy to pay much less than they do for home delivery.

Bobbie Johnson sees a clear divide in the media between those charging for content, and those advocating a free model where journalism becomes something else entirely. This might be an overly simplistic way of analysing the debate - few media platforms will be all free, or all charged for - but it's worth a look at the full article:

Proponents of free news say it is impossible to succeed by charging readers when there are so many competing sources of information prepared to give their services to readers for nothing, echoing the words of the famous futurist Stewart Brand, who said "information wants to be free".

So far at least, history is one their side: while specialist news publications such as the Wall Street Journal, the Financial Times and the Economist charge for access to some of the information they publish, few mainstream publications have managed to succeed in implementing pay walls.

Of course, the kickback will be that users won't pay for the content, but Murdoch believes he has found a simple solution:

The News Corp boss pointed to the Telegraph's recent run of scoops about MPs' expenses as an example of journalism readers would pay to read: "I'm sure people would be very happy to pay for that."

Rarely afraid of a confrontation, Murdoch made it clear that he was gearing up for a bruising fight: "Our policy is to win.

In the age of 24 hour news channels, and 24 hour newspaper online publishing, how often does a scoop like the Telegraph's come along? For those slow news days, when papers are reporting the same stories, with similar quotes, figures, and pictures, will users will be willing to go to The Sun, The Times and the News of the World?

Unsurprisingly, Jeff Jarvis is having a field day, and points out one of the biggest problems with charging online - even the smallest cost allows you to be undercut by a website offering content for free: a business model where there is no direct charge to the user:

Charging for content brings marketing and customer-service costs. Online, it reduces audience and the advertising they justify. Putting content behind a wall cuts it off from search and links; they cut off your Googlejuice.

When publishers build those walls, they open the door for free competitors, who can now enter the content business with virtually no barrier to entry. Publishers who fool themselves into thinking pay will save the day only further forestall the innovation and experimentation that is the only possible path to success online.

If their content is behind a pay wall, NewsCorp will of course be looking into protecting their material, to a drastic extent. This from the Inquisitr:

Harold Mitchell, the founder of one of Australia’s largest advertising groups and a man connected to News Corp locally, said in a radio interview Thursday (local time) that News Corp. is preparing to sue Google and Yahoo to stop both from linking to, and quoting News Corp content.

Stopping Google linking to your articles, which will already be behind a pay wall, could have a substantial effect on online advertising revenue for NewsCorp websites. But will the subscriptions or micropayments they receive be enough to compensate?

Charlie Beckett reckons Murdoch could be going down one of three paths:

1.‘Asset-stripping’: get as much cash out of these businesses as you can without completely killing the customer base to pump up the balance sheet while other media organisations burn their capital and plunge further into debt.

2. ‘The gamble’: If a few titles go down that just proves their weakness. Whatever is left standing will dominate a depleted market as the rivals follow in the wake of News International. In the same way that putting the price up of the Sunday Times actually strengthened its market dominance. If you are a sector leader - such as The Sun - then you have the brand community to set the pace and help dictate consumer behaviour.

3. Genius: Murdoch understands that enough of the public want to preserve their source of news and will be prepared to pay. They realise that they have had a free ride.

Although this business path is not inevitable, it needs to be experimented with - and if anyone can try it, it will be Murdoch. But if nothing else, as Matt Wells says in the Guardian - it is one hell of a gambe.

Lionel Barber, Financial Times Editor, on charging for content online

This is a post which will contribute towards the website on new business models in print I am designing. I am publishing them both on this blog, and on one which will exist on the website itself.

Lionel Barber, who has editor of the Financial Times knows a thing or two about a successful business model which allows a paper to charge for online material online, has predicted that 'almost all' news organisations will, within a year, be charging for content online.

Speaking at a Media Standards Trust event, Barber said that:

"...we must go back to first principles and make the case for journalism. This is partly because the recession and the Internet are undermining the business model that has sustained news gathering since the late 19th century. The worldwide web has disrupted revenue streams and dramatically lowered the barriers to entry to the news business. As the Economist noted: “The business of selling words to readers and selling readers to advertisers, which has sustained their role in society, is falling apart.”

'Disrupting the revenue streams' makes the Internet sound like an inconvenience to the news industry, rather than an unparalleled opportunity which they can't very well prevent regardless.

Peter Preston is less certain than Barber about what line the great newspaper giants will fall on when it comes to charging for content

The [New York] Times, which invests so much in content, may be able to charge successfully for some or all of it. But its unique user count (see Ken Doctor's warning) is bound to decline, taking online advertising down with it. If there was a widespread, concerted change, then perhaps it could be contrived without too much loss. But current monopoly law makes such an organised commercial shift impossible.

Marks Potts thinks that readers won't pay, simply due to the poor quality and lack of diversity on newspaper websites:

Most newspapers and their sites are full of content that's widely available elsewhere—wire copy, stories covered by competitors, etc. In the flattened world of journalism in the Internet era, where monopolies are shattered and readers are a click away from countless alternatives. it's just too easy for readers to look elsewhere—especially if you stick a pay wall in front of them.
Think newspapers are full of unique content? Well, sit down some day with a copy of just about any paper and circle what's truly unique and unavailable anywhere else. The result isn't pretty. Do the same thing with the paper's Web site, and you quickly realize that the problem is compounded by presentation that just isn't very compelling, to put it charitably.

Now, misguided, desperate leaders like the FT's Barber somehow think the answer is to somehow convince readers to pay for something that, sadly, doesn't have enough value to justify charging. Readers are smarter than that, and that's why Barber's notion that "almost all" news sites will soon be charging for access is a hopeless dream. Sure, they may charge—but readers won't pay, at least not in anything resembling sufficient numbers. Not unless they see significant quality and value. And based on the current track record, there's no reason whatsoever to believe that will be the case.

Jeff Jarvis is, unsurprisingly, almost desperately unsympathetic:

In what other industry do companies feel entitled to revenue just because they used to have it or they think they deserve it because of who they are?

But newspapers think that companies that served their customers better – Google or craigslist – owe them money because they lost those customers for serving them badly and ripping them off for years.

Of course, Barber and his paper are in a rather unique position, seeing as how they are afford to charge for content. They have a rich client base who require the unique financial information which, along with the Wall Street Journal, they provide. So Barber can state that:

'figuring out what is special, distinctive and original is the vital first step. The second is to establish an online platform capable of charging for content, whether on a payment per article basis or a package subscription.

But few papers are in a similar position: and being the only paper to cover say, a small market town isn't enough of a unique base. Peter Preston evaluates the options for some of the main national papers:

"The Telegraph, with a huge print subscription base, has one set of possibilities. The Express, with no subscriptions and not much of a website, has none - except price-cutting and seeing its print possibilities grow. The Guardian, leading the unique user pack, has advertising possibilities to lose if its user count slides too much in a charging switch - but jam the day after tomorrow doesn't help if the teacake is burning today."

With any luck, someone will call on Barber in 12 months and see where we are. But editor of the FT is a privileged position to make such pronouncements from.

Warnings on media profits

This is a post which will contribute towards the website on new business models in print I am designing. I am publishing them both on this blog, and on one which will exist on the website itself.

From the Media Guardian, warnings about the profits on UK media companies:

The past six months have seen the greatest number of media companies issue profit warnings since the dot com crash of 2001, according to Ernst & Young.

Rudberg pointed out that during the slump of 2001, 21 UK listed companies made profit warnings in the first half of that year - but the trend saw a "sharp increase" to a record level of 18 in the third quarter.

Ernst & Young concludes that the decrease in profit warnings between the first and second quarters this year is due to cautious financial forecasting by smaller AIM-listed media companies rather than a sign that the industry is stabilising.

"If anything the second-quarter 2009 profit warning figures suggest that the downturn has started to impact the larger listed media companies," Rudberg said.

"In the 12 months to the end of March, 75% of the media companies that warned [on profits] were listed on AIM. [This compares] to the majority [of companies reporting profit warnings] being FTSE companies in the second quarter this year".

The number of warnings being it's highest for eight years only highlights the need for print media to find a new business model, whether they be small scale local papers or FTSE companies. Trinity Mirror's declining advertising revenue plots a similar sense of urgency:

Trinity Mirror reported today that advertising revenue at its regional newspaper division fell by 36% year on year for the period to 26 April, with sectors such as recruitment and property advertising falling by more than 50%.

Overall Trinity Mirror, owner of the Daily Mirror and more than 140 regional newspapers, said that group advertising revenue declined by 30% year on year.

The regional division fell 37% in January and February and 35% in March and April. Display advertising was down 24% for the period, recruitment down 50%, property down 54% and automotive advertising down 35%.

Given that much of their advertising can now be placed online, and for free or virtually any cost, it is hardly surprising that classifieds are down by such a dramatic rate. When we talk of competition for newspapers, we no longer simply mean news websites, but those competing with their business: Craiglist being one frequently mentioned.

A fellow Journalism student on shorthand, the industry and business models

Not me, but Rich Parsons, a postgrad print student at the University of Sheffield. It's good to vent every now and then:

On shorthand:

"The common argument is that its easier than electronic recording. Bollocks. We're not in the 90's anymore, recording audio onto a cd or a casette with only a fast forward and rewind function. Modern technology is valued by its UI, and as such, recording audio in digital format is a piece of cake. Recording devices will subdivide audio into tracks and subfolders, you can paste it onto a laptop and organise it on any number of programs. Also, recorders are much smaller than a notebook and easier to take with you. You also don't have to worry about losing your pen or it running out of ink. For goodness sake, the technology is so prevalent that most mobile phones can record a decent-ish amount of audio themselves"

I know there are counter arguments: namely that people are more put off by being recorded, that batteries can run out, that recorders can't be used everywhere. But I sympathise with the sentiments. Rich also wrote about the dying print industry (for a more detailed look, see the recent Economist article):

"It frustrates me beyond belief that the business models for journalism are so stuck in the past. Editors think they're screwed now, wait till mobile browsing really takes off and kindles become affordable to everyone. Then lets see people justify cutting down 70,000 trees for a week's production of the New York Times."

I couldn't speak for a generation of journalism students anymore than Rich can, but I think it's likely his frustrations (I hope he doesn't mind me calling them that, or highlighting his whole post!) are shared by many. I'm off to go and complete a survey about journalism education... Rich's post has certainly given me some comments to mull over.

Sarah de Crescenzo on why there won't be one new business model for journalism

Writing at the University of California, San Diego's 'The Guardian', Sarah de Crescenzo discusses why there won't be one answer to the major problem faced by the media: what a new business model will be.

An extract:

"Proponents of specific business models — whether it be citizen journalists, or nonprofits — must recognize printed newspapers will not be replaced by another, single model. We saw citizen journalism in play when a plane crash-landed in the Hudson River, which was first reported by a local man on Twitter. While this can’t be a replacement for traditional newspapers, it does provide useful supplementary, firsthand information."

When we discuss the 'business model' problem faced by the media, we are referring to a universal problem. Namely: declining advertising revenues, the inability of most news organisations to make money online, the drive away from the print platform, the appeal of new media and the fact that this is exacerbated by the economic recession.

Considering however, the unique geographic, financial and societal position of each media organisation, it should come as no surprise that there cannot be a universal business solution.

de Crescenzo also dampens what can sometimes be the over-zealotory of new media advocates (which is in itself an absurd phrase - I don't think there is that clear a distinction to be made is there?):

"Do you want someone to monitor your politicians? Or, would you rather do it yourself? In choosing a new business model, you should ask yourself why journalism exists in the first place. Even if you live in Washington D.C., your nine-to-five probably doesn’t come with days off to explore exactly what those guys in the White House are doing. Thanks to journalists, you don’t have to."

Despite my enthusiasm for new media, this is an unavoidable analysis. As one my tutors pointed out to me, without the media who would, truly, go along to the local council meeting on a wet, dark Thursday evening in November? This presumes the media are fulfilling this role already and digging deep, which is obviously debatable.

The full article, at least as a general and sensible summary on the issues, is worth a look.

Hat tip: Nikhil Moro at Civic & Citizen Journalism Interest Group

Related posts
Deepti Bharthur on technology, complacency and new media
Churnalism, Nick Davies, New media and the crisis of journalism
James Poniewozik on the 'Media Apocalypse'

TNTJ post and the future for journalism students

I've got a post on TNTJ (Tomorrow's News, Tomorrow's Journalists, part of Journalism.co.uk) about being a journalism student given the current state of the industry. I've expanded on some of the ideas here.

An extract from the post, which is part of the April 2009 debate on what your summer/post-graduation plans are:

"I’m under no illusions as to how difficult and how competitive it will be to find a job in journalism right now. Every day I read or hear of cutbacks, closures and even graduate schemes no longer going ahead. Whether we like it or not, many of those graduating from journalism courses this year will have to decide if continuing down their apparent career path is worth it, considering the difficulties in the industry.

This is all the more alarming given the 24% rise in applications for journalism courses this year."

It's difficult to know where to begin. Those studying journalism are clearly not all going to end up being roving reporters for local papers or in one of the dwindling numbers of graduate schemes. As well versed as we are in new media and the Internet, there appear to simply not be enough jobs. Jon Slattery reports on the situation here.

Much as we may look for scapegoats, from Google to national newspaper websites, none of it will resolve the fact that there are too many journalism students for journalism jobs. Fellow Sheffield postgrad Natalie Bowen summarises the graduate journalism job market:

"As another door slams shut, the chances of finding meaningful employment in this sector I so dearly want to work in seem slim. Already this year, the Telegraph and Guardian have canceled their schemes, and Trinity Mirror froze their trainee recruitment last year, although interestingly their website doesn't mention this. I guess Dianne Reilly had a lot of students to disappoint."

More from Slattery:

"Some students are being advised to consider going into public relations or to look at ways of using their skills in alternative fields because the jobs market in journalism is so bad. Even the competition for low-paid jobs is higher than usual because there are more experienced out-of-work journalists trying to find a position."

None of us can deny the difficulties, that we have chosen to get on the first rung of an industry that is both dying and changing in a myriad of ways. Given the competition from other journalists and from other graduates - there are more now than ever - no journalism student could be criticised for looking further afield in future employment.

Ben Spencer, another fellow Sheffield postgrad, retains some optimism, at least through the need for journalism itself:

"There aren’t many jobs, old hacks (like Sara Lacy) are telling us that journalism degrees aren’t worth the paper they are written on, and it still requires a healthy bank balance to gain entrance to the fourth estate. It’s a competitive industry, and always has been.

But in the last week Britain’s chief anti-terrorism police officer and a senior Downing Street advisor have been forced out by stories dug up by journalists. News still matters, and journalists will always be needed."

As Ben points out, contributing to the journalism industry does not require you to work as a journalist - arguably, this is already the situation for many students. Michael Haddon, who has also contributed to the TNTJ debate, comments:

"It is obvious there are just not going to be enough staff jobs to support the amount of graduates hoping to pursue work in the media industry, so it makes sense to try and gain freelance work which might be in more plentiful supply."

Now thoughts of walking into one of the best graduate schemes are gone and the aim must be making sure we are best placed for that elusive job which should eventually show up. I plan to continue blogging, interacting using twitter and revitalising that LinkedIn presence where a personal profile might be able to help career ambitions."

There's only so much that can be said but I'd recommend Michael's post in particular on this issue. It's also worth asking what the implications will be for journalism schools across the country, and how courses will change in structure and popularity. Mark Duell, a Sheffield Journalism undergrad, speculates that the difficulties faced in the industry might remove some of the 'lesser' (his word) media degrees:

"By studying journalism practically at a top university, you are taught how to be a good journalist, and leave fully qualified and ready to go. By cutting out these 'lesser' degrees, we might ensure that only people who really want to get into journalism and the media go to the top universities and get the jobs everyone wants."

I'm not convinced that going to one of the top journalism schools - or more accurately, going to one of the 'lesser' ones - necessarily means you are more or less likely to 'really want' to go into journalism. It might be the case that the best teaching is a mixture of these degrees, rather than one standardised way of teaching all those entering British journalism.

Journalism needs new, fresh faces to keep it afloat. Hopefully they'll be able to partake in an industry that, despite the difficulties, they would desperately like to be part of. Otherwise, such a development will only be negative for the media arena in the long run.

Jeff Jarvis' fake speech to the NAA

Jeff Jarvis on the speech he would give to the NAA (Newspaper Association of America), at their conference in San Diego.

Jarvis, on his usual 'changing industry' high (which is brilliant), chastises the old barons of the newspaper industry in the USA for not changing. Some more names than Murdoch would be welcome, and again, there is some vagueness over new web business models - but there always is, that's the point.

An extract:

"Yesterday, you delivered a foot-stomping little hissy fit over Google and aggregators. How dare they link to you and not pay you? Oh, I so want Eric Schmidt to tell you today that you’re getting your wish and that Google will no longer link to you. Beware what you wish for. You’d lose a third of your traffic overnight. If other aggregators (I work with one) and bloggers (I am one) and Facebook all decided to follow suit, you’d lose half your traffic. On most of your sites, only 20 percent of the audience in a day ever sees your homepage and its careful packaging; 4 of 5 readers instead come in through search and links."

As I mentioned in reaction to Henry Porter's article, Google doesn't have to link to news sites - and nor do the rest of us. Jarvis is pretty accurate on user experience of websites too, from my perspective. I have about four news websites I look at everyday (BBC, Guardian, Telegraph, CNN), and most of my other links and news come from Google Reader and it's subsequent links, (or not, seeing as how I often can see the whole post through Reader: there are plenty of the websites themselves I rarely look at).

Another extract:

"You all remember the quote from a college student in The New York Times a year ago, the one that has kept you up at night. Let’s say it together: “If the news is that important, it will find me.” What are you doing to take your news to her? You still expect her to come to you - to your website or to the newsstand - just because of the magnetic pull of your old brand. But she won’t, and you know it. You lost an entire generation. You lost the future of news.

You blew it."

As long as someone is linked up with the tools, perhaps the news will come to them, though they need to allow it to reach them first.

Related posts:
Henry Porter on Google
Walter Issacon on the Daily Show
Tim Luckhurst on buying a newspaper 'for democracy'

The Final Rocky Mountain News Cover

The Rocky Mountain News, of Colorado, publishes its last edition.

Charles Apple has the final cover the Rocky Mountain News, which has been covering Colorado for nearly 150 years. It finally had to close, with its last issue today. Click here for a larger picture, and here for their website.

(Picture credit to Charles Apple and Kathy Bogan, presentation director of the paper).

There are rumours that the San Francisco Chronicle could close within weeks. Let's hope we don't see another final cover from a classic American newspaper soon - but this seems unlikely.

Hat tip: newspaperescapeplan

Walter Isaacson on The Daily Show

Walter Isaacson, President and CEO of the Aspen Institute, was on the Daily Show talking about charging people for looking at material online:

Quite how someone can suggest such a backward step now is beyond me.

The Daily Show With Jon StewartM - Th 11p / 10c

fWalter Isaacson

Daily Show Full Episodes
Important Things With Demetri Martin

Funny Political News
Joke of the Day

Dave Lee on the NUJ

Dave Lee, Co-Editor of the BBC Internet blog, has an interesting and frustrated post on his personal blog as to why he won't be renewing his membership of the NUJ. An extract:

'The NUJ is a cowardly union, hiding away in offices in which they wish were still furnished with typewriters and a smoking room. Their magazine, ‘Journalist’, is symbolic of their attitude to the changing media world. Only very recently has it become available online. As a downloadable PDF, that is. A pain to download, a pain to read — and completely anti-Google. Journalists looking for its words of ‘wisdom’ wouldn’t find them too easily.'

I've posted about the political aspects of the NUJ, and specficially General Secretary Jeremy Dear before. I could buy student membership for £25, which could last until the end of my course. I'm just not sure that it's worth it. In fairness to The Journalist, they have linked to the post from their website. Lee concludes:

'Right now, the only noise I hear from the NUJ is complaining.

“Save the journalists!” they’ll scream.

“But how we will survive? We can’t afford them,” say the newspapers.

“Well, er… we don’t know. Just SAVE THE JOURNALISTS, ok?”

Useless.'

James Poniewozik on the 'Media Apocalypse'

Time's James Poniewozik has an article looking back at the (US) media's past year and what can be expected ahead. An excerpt:

"It's enough to make journalists wonder, Is this the end?

Yes, probably. And a beginning. Because there was good news for the media in 2008 too, and it had a lot in common with the bad news. For while the media business (the exchange of information for money) was lousy, the media (the conduits of information) were multiplying.

When an earthquake shook Sichuan and terrorists shot up Mumbai, eyewitnesses' texts poured out through Twitter. Some of the biggest scoops and best analysis in the election came from blogs and some of the best satire from YouTube. Political websites took off. The media have never been so ubiquitous or polymorphous. I can access more information on the phone in my back pocket than I could have, as a kid, in my hometown library."

Never mind the hometown library, you've now got access to more information than every library in your home state.

Poniewozik does make a good point however - the reason we are hearing about redundancies, lay-offs and print editions being scraped is because those facing such actions have a great conduit for their views. Their columns, their editorials, blogs and features. Other industries aren't as lucky, or as well-informed about the decline/change of their profession.

Thanks to "The Media is dying" Twitter feed for finding this article. If you want comprehensive updates on redundancies, lay-offs and so on, they are the feed to follow.