Posted on January 25, 2008
Filed Under OMG! Old Media is Dying! |
I like Rupert Murdoch. You simply can’t argue with success. The way he expanded News Corp. into a global media powerhouse is nothing short of remarkable and even if you don’t agree with his beliefs, I think any reasonable person has to respect what he’s done. Most recently, he’s continued to impress. The expansion of his empire into the digital space has seen a number of shrewd moves, most notably his acquisition of MySpace for $580 million. He went on to ink a $900 million MySpace advertising deal with Google and given that Facebook, which still lags MySpace by a considerable margin in terms of registered users, traffic and revenues, has been raising money at a $15 billion valuation, it’s safe to say that Murdoch scored a coup d’état with MySpace.
I was disappointed when Murdoch stated last year that he was considering making the Wall Street Journal Online completely free. After all, with nearly 1 million people finding 99 George Washington-based reasons to pay for the WSJ’s online content, it seemed foolish. So it was with relief that I read the news: Murdoch is not going to make the WSJ Online completely free. The most exclusive, insightful (and hence valuable) WSJ content will remain behind a pay wall and the prices for this content will probably go up. I think it’s a smart move and the timing is good. Here’s why:
- Paid services work better in tough economic times. While the advertising market is good, letting advertisers subsidize your business looks attractive but that can quickly change, as many learned when Bubble 1.0 burst. With the global economy , I think Murdoch is playing it safe.
- Despite the fact that many Web 2.0 cheapskates think “content just wants to be free,” there are still quite a few people who recognize that good content has value and who are quite willing to pay for it. WSJ Online’s existing subscribers prove that.
- You reduce the perceived value of content when you make it free. While it’s true that the Internet has increased access to content, it has also increased the commoditization of content. The same basic news stories are syndicated everywhere and regurgitated ad nauseum by bloggers. Rupert Murdoch recognizes that some of the WSJ’s exclusive content is insightful, unique and useful and has refused to devalue it by making it free. In fact, he’s actually going to make it more expensive. Perhaps contrary to the so-called “wisdom of the crowd,” I actually think this will make it more appealing: Murdoch is essentially stating, “If you’re tired of all the garbage, commoditized content out there, subscribe to the Wall Street Journal Online and get access to the type of content you’re really looking for.” After all, you get what you pay for and you don’t have to deal with the clutter.
Of course, the Web 2.0 crowd doesn’t like the news, but then again, I don’t think they’ll like the bursting of Bubble 2.0 either. The bottom line is that it’s good to see one of the most successful businessmen of our time use some common sense instead of falling into the same traps that his competitors have been led into by the second round of irrational exuberance coupled with irrational fear about the dying newspaper industry.
On a side note, I think some of the things John Furrier says in are worth reading.
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