Will Rupert Murdoch be The Savior of The News Industry?

** Update: While preparing this post for publishing, news reports confirmed that there are indeed talks between Microsoft and Rupert Murdoch regarding entering a search deal. Obviously, as we said below, he had something up his sleeve! Let’s wait and observe how all of this will unfold!

Rupert Murdoch

Rupert Murdoch

With the increased popularity of the web, came the demise of the news industry as we know it. Reports have shown a serious decline in newspapers’ profitability in the past couple of years as they struggle to keep up the number of their subscribers at a time people moved toward the web and no longer expect to pay for news content!

The threat is very bad; the news industry is seriously at risk. Interesting enough, the decline in profitability, at the news content providers side, is matched with an emergence of a profitable model of web news aggregators led by Google. Rupert Murdoch, the founder and CEO of the world’s second largest media conglomerate, News Corp, has been dismayed with the course of events and the amount of money news aggregators – especially Google – have been making at the expense of his news corporations. He is all set up for some action and is ready for the big fight!

De-indexing News Corp sites from Google

In a recent interview with Sky news channel, Rupert Murdoch declared that his sites will remove themselves from Google by starting to block search engines! The declaration came as a surprise for many web experts who realize the huge amount of traffic Google sends to news sources, which Google estimates to be around 100,000 clicks every minute and the amount of advertising revenue those sites generate as a result!

The move is widely seen to be suicidal with ABC, the Australian news channel, describing it as the classic move of an empire in decline. Surprisingly, Rupert Murdoch doesn’t see it that way; he claims that they will compensate by focusing on increasing the numbers of their sites’ subscribers! He believes that they are better off with fewer people who are willing to pay. But would that really work? I mean are news aggregators really preventing news content providers from building their subscribers base? Is Murdoch aware of the risk that he is taking? Or maybe, as someone has put it, is he just bluffing? There must be something up his sleeve!

Can Bing be the answer?

Microsoft Bing

Microsoft Bing

Dan Kennedy, an assistant professor of journalism at Northeastern University, believes that with Rupert Murdoch’s track record, it is very likely that he is two or three steps ahead with something none of us has figured out yet. That is a very likely possibility, it was addressed last week in a post by Michel Arrington from Techcrunch with speculations about Microsoft’s involvement in the matter with its Bing new search engine. Arrington suggests that Murdoch may most probably de-index his sites from Google and make a deal with Microsoft to get exclusive rights to index it. Mainstream people would jump onto Bing to get their news content that isn’t available on Google. Other news agencies would just jump in and follow up on such deals. This could heat up the search engine war!

This may be less about the self destruction of traditional journalism and more about the search wars” ~ Michael Arrington

What about e-readers?

Everyone can afford a newspaper. They’re the cheapest things in the world and what you get out of it is fabulous. And it will be even cheaper when you get it electronically” ~ Rupert Murdoch

While it is one way to go after some of the profits of news aggregators, which is kind of morally sound because it is built at the expense of news content providers, another way would be focusing on micro-payments of users’ monthly subscriptions. This hasn’t been a successful model for online news magazines except in a few cases (Wall Street Journal gloats a moderate success). However, with Kindle’s success and the wave of upcoming e-readers, the hope of saving the newspaper industry has been reborn. There is something about the serialized way we are used to for reading our newspapers today. I don’t believe that it is wise to force people into subscribing, but it can be a really good idea to offer options of a complete daily serialized version of the newspaper.

Rupert Murdoch Interview with Sky News

Internet users have enjoyed free content for years and years, it is hard to expect them to suddenly start paying, but yet, any move towards saving the industry is appreciated.

Would Rupert Murdoch succeed in reviving the industry? Would Microsoft pay for exclusive content and add a new dimension to the power game? And would you consider  paying for web news in a way or another? Let us know your opinion in the comments section.

US newspaper circulation graph. Illustration: The Awl (from Audit Bureau of Circulations data)

US newspaper circulation graph. Illustration: The Awl (from Audit Bureau of Circulations data)

Comments and Reactions

  • http://blog.thoughtpick.com/ Beiruta

    It would be interesting to see what Microsoft's next step would be in this regard. What would be even more interesting though is that if Bing refuses this “deal” after Murdoch loses his chances with Google!

    Great read!

  • http://www.digitalpost.org/ Lalit

    The net neutrality will not allow News Corp to tie up only with one search engine provider. Google will come out strong by acquiring news content and cut out News Corp to the rest of the world.

  • http://blog.thoughtpick.com Amer Kawar

    Well, that could be the case. But do you think net neutrality activists will have their voice heard between giants like Microsoft, Google and News Corp?

    I think the deal is fair from a common sense point of view. News Corp spends money on making, writing and publishing news, so if you look at it from a copyright perspective, they can do whatever they want. It's their sites, their content and they can do whatever they want with it.

    I'm not saying that I will like switching to Bing instead of Google to look for news topics, but they do have the right to make this move.

    This got me wondering, what would Google do next? And would it actually work? I mean news articles are copied on hundreds of sites that Google index!

  • http://blog.thoughtpick.com/ FadiPick

    It is a complex situation, I really wonder who is going to end up gaining from this. I mean for News Corp to be out of sight from Google would open the door for other news outlets to shine and gain ground, on the other hand, News Corp is a huge conglomerate, it can make a difference in the search engine war! I, myself, would use Bing instead of Google to read their news.

  • http://www.digitalpost.org/ Lalit

    Here is my take on the situation. http://digital-post.blogspot.com/2009/11/media-...

  • http://blog.thoughtpick.com/2010/01/will-the-ipad-change-social-media.html Will the iPad Change Social Media? | Thoughtpick Blog

    [...] news, but you would love to hear it from The New York Times. Large media corporations will have to figure out a way to curate the social web to get trustworthy news sources, and they have to eventually open [...]

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