'Rupert Murdoch is the modern-day King Canute' - TechCentral

‘Rupert Murdoch is the modern-day King Canute’

Arthur Goldstuck

Newspaper publishers have “completely misunderstood the nature of the crisis facing them”.

That’s the view of technology researcher and author Arthur Goldstuck, MD of World Wide Worx, who says newspapers face the same bleak future as the music industry — many publishers and editors just haven’t figured it out yet.

And News Corp chief Rupert Murdoch’s recent threat to throw up pay walls around his publications’ websites is a “kneejerk response” that will inevitable backfire.

Goldstuck says it’s worrying that editors and journalists are lending support to Murdoch’s “crusade”.

Other than threatening to charge readers for access to his online content, Murdoch has also fired a salvo at Google, saying he may prevent world’s leading search engine from indexing News Corp content on its news aggregation service, Google News.

Murdoch is said to be in talks with Microsoft to do a deal involving Bing, the software company’s search engine. However, Bing has only 10% of the US search market (and an even smaller share worldwide).

Goldstuck believes Murdoch is missing the point. “Content has always been free in newspapers,” he says. “What you’ve paid for is the cost of the newsprint. Advertising has always paid for the content, so why should readers suddenly have to pay to read content online? You’re just denying your existing model, where advertising pays for content.”

The real problem facing the newspaper industry, Goldstuck says, is that revenues from online advertising are not yet sufficient to cover the losses that are being incurred in print. “That puts the newspaper industry in exactly the same boat as the music industry.”

Goldstuck says Murdoch is the “modern-day King Canute”. Canute, a Viking king who lived a thousand years ago, is reputed to have stood at the seashore and commanded the incoming tide to stop rising and not wet his feet. Of course, it didn’t stop, and Canute, defeated, hung up his crown.

Many SA newspapers editors are too blasé about the impact the Internet will have on their products, Goldstuck says. Because broadband isn’t cheap and Internet penetration is limited, SA papers have been shielded from the full effects of the Web.

“In SA, it’s not online [PC-based] readers who are going to kill newspapers. The future of news in this country is on the cellphone,” Goldstuck says.

“This will come as an even bigger shock to old-time publishing editors. If you need a different mindset to distribute online, you need a dramatically different mindset to do it via cellphone.

“On a website, you can keep readers engaged in a variety of activities, but on a cellphone screen, there is not much you can do to leverage readership, so it’s a huge challenge. It’s a challenge that has to be met, or newspaper publishers really are all going the way of the music industry.

“The news gathering model has to change. This doesn’t mean news gathering itself is passé. But the value you provide to your readers has to change. If you are providing commodity content, if you are running the same press releases and wire copy, you don’t have any chance of survival.”  — Duncan McLeod, TechCentral

10 Comments

  1. Very good piece Arthur but in the interests of historical accuracy….Canute was thought by his followers to have divine powers. To prove to his court that this was not the case he commanded the waves to go back and when they didn’t his courtiers (somewhat disappointed) believed him. Canute, in other words, was the good guy and not the Cnut you make him out to be.

  2. Murdoch is indeed getting c(an)ute. Publications world-wide should be thanking him for taking the 1st shot (of significant scale) at that rising tide. If he drowns, they get to stay dry, if he doesn’t they get to join him and pretend that were always on his side.

  3. Good point – in fact a great point – one that seems to have been missing in a lot of the debate. None of the esteemed Vanity Fair writers on media have mentioned this point.

    But, still when content is aggregated on the scale of google Murdoch is right when he barked at Hitchens “so you steal from me” when Hitchens said he was involved in an aggregation site.

    You cant just credit the source and on that basis get away with mass aggregation.

  4. The way I see it, this is pretty much zero risk for Murdoch. He tries a new model, and if it fails, gets his sites back on the aggregators and carries on like it used to be. He might lose some hits during the trial period of the business model if it doesn’t work, but he’s not committing to anything that can’t be undone in 24 hours.

    Murdoch didn’t become a billionaire media mogul from being stupid, so it’ll be very interesting to see how this turns out. I don’t think it’s a foregone conclusion that it’ll fail.

  5. Since it is difficult to establish billing relationship with consumers, google’s model of giving search for free and making it up with a transaction (number of clicks) based revenue from advertisers. This can only work if you can get content for free. This moves the problem of charging for content up the clickstream. A large number of genuine content guys will need to unite to block this movement. today socialnetworking and crowdsourcing will easily overcome the challenge of collecting news.

  6. Does Murdoch really not get the internet, even with his team of experts on hand or is this part of a bigger negotiation to be paid for his site to be searched , as that generates cash for google? Microsoft definitely seems to be warming up to this as an aggressive number 2 (paying him for his content) and looking for an exclusive search deal. while i dont believe that this will work, it does pose an interesting question; what if the search result you got wasn’t the best, but the best within what that search engine had the rights to search? what if search rights were charged for by publishers, how would that impact search engine profit margins? Publishers would need to carefully weigh up the benefits (increased traffic and advertising revenue) between the two.

  7. Great article.

    20fourlabs News24 application for the iPhone is a great example of how a traditional publisher can exist in the print, web and mobile worlds.

    First thing I check when I get up in the mornings. Don’t even have to wait for my dog to bring me the paper…

  8. I still think that “I tunes” has the right idea. Put a tag on the content, if you click on it you get the whole story and your credit card gets debited by 10c. If you want to you set up an account with R100 credit, thats 1000 stories and it gets nicked off that account.
    Somebody has to start or we will loose analsys and opinion. Breaking news we can get for free on twitter and facebook, but the rest needs to be charged for. It has to be.
    Opinions and analysis are products and should be valued. Sure we can do away with them and hope that people who are paid by other institutions will give their time for free, like professors, but journalism will die.
    We are already seeing it at Independent newspapers, crap pay, and there are no decent reporters left, the news is crap. No pay no decent journalism, bottom line.

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