14 Nov 2009

Paid News

is unacceptable as a concept. Anymore.

Its taken me a while to pen this after Murdoch came out against content aggregators. I am posting a thirty seven minute interview of the media baron with David Sheer on Sky news here.

Murdoch obviously seems to be caught in his decade old dogmas. As Michael Woolf described a few days ago on Newser, the technologically impaired Murdoch is not a big fan of the development of the web and Google in particular. But we don't want to get personal here. 

I firmly believe you cant put a money value to information in today's age. The other day i was discussing with an acquaintance as to why journalists do not detail out the factors of correlation between the Crude oil prices and the weakening of the dollar, he , very correctly pointed it out that the journalists are plainly giving us news. If we wish to delve deeper into the micro and macro economic factors going on in the background to build this inference, we should lay our hands on the relevant research papers - essentially premium content even today. 

When can Rupert's proposal (money attached to news ingestion) work?

  • When all Original Content Providers join together to form a cartel supporting his proposition.
  • In case of a cartel not being formed, NewsCorp should provide content of an excellent and unique nature.
  • Content ingested from the WSJ website by a premium member cannot be shared anywhere else (on his/her personal blog etc)
  • Advertisers are willing to pay WSJ on a model differing from a PPC/Clickthrough model
  • Benefits of being a premium member far exceed just getting access to content. 
Why won't Rupert's proposal work?
  • I focus on my third point above. Imagine a situation wherein I am a premium member of WSJ. I get access to premium content and I lift this content and shift it to my blog. 
  • Effectively I am paying to the tune of $1000 a year. If I stand to establish credibility, then I stand to get a lot of ad-revenue onto my own blog with which I can easily pay-off my premium membership fees. 
  • If Newscorp is saying, it will patrol the web for such aberrations, then they are effectively saying they will incur pointless operating costs which will eat into their revenue (flowing through the premium memberships). And if they tend to increase their premium-membership fees to meet this OPEX, they are effectively sending a model based on Economies of Scale for a toss. 
What I assume will happen if Rupert's proposal is implemented?
Murdoch has basically spoken about putting pay-walls around his news content. While he does explicitly refer to Google, the statistics show that it effectively boils down to that.

Microsoft Bing and Yahoo Search have already tied up. Wolfram Alpha (the computational engine) is tying its search results to Bing. Effectively, we might encounter a time when NewsCorp ties up with one of these search engines. Imagine a situation where Bing+Yahoo project news from newscorp as 'We have something that Google does not'. Hell, do we care?

Good luck to Bloomberg and WSJ if they are going to make their entire content base premium. Events like these just make me feel that we are going backward in time. 

I just shudder to imagine my feed-demon asking me for my credit card details before fetching feeds from these sites.

A big thumbs down to paid news. 

Cheers.