News Corp. CEO defends pay-for-news model
WASHINGTON (AP) — To thrive in the digital age, media companies need to persuade consumers to pay for news online by providing compelling information in any form they want, News Corp. Chairman and CEO Rupert Murdoch said Tuesday.
Murdoch said the future is promising for publishers that can adapt to the ongoing migration of audiences and advertisers to the Web. Key to survival, he said, is giving consumers what they want how they want it – be it on a computer, mobile device or e-reader – and then charging for it, as his company already does with The Wall Street Journal.
“We need to do a better job of persuading consumers that high-quality, reliable news and information does not come free,” Murdoch said. “Good journalism is an expensive commodity.”
Murdoch’s comments were part of a wide-ranging discussion at a Federal Trade Commission workshop exploring the profound challenges facing media companies and ways the government can help them survive.
Newspapers, broadcasters and other traditional media companies are in a state of economic distress as the growth of online revenue has failed to keep pace with sharp declines in the offline advertising base that has historically supported their operations.
The FTC has held periodic workshops on new marketplace developments across an array of industries, including health care competition and targeted marketing. But this week’s questions about the health of journalism raise another set of concerns.
While media executives came to the two-day workshop looking for new business models, government officials were seeking ways to protect a critical pillar of democracy – a free press.
“News is a public good,” FTC Chairman Jon Leibowitz said. “We should be willing to take action if necessary to preserve the news that is vital to democracy.”
The agency will hold more workshops in the spring to discuss the ideas that emerge this week in greater depth and could ultimately offer legislative recommendations to Congress.
Among the options being discussed: tax law changes that would allow media companies to earn tax credits or become tax-exempt entities, and copyright law changes that would force search engines and other online aggregrators to compensate media companies for the content they produce.
Also on the table is a proposed change in antitrust rules to allow newspapers to jointly negotiate payments from Web sites that use their content.
Congress has also tried to tackle questions about the future of the media business, particularly print journalism. Last spring, Sen. John Kerry, D-Mass., held a hearing on the financial troubles facing the newspaper industry. And Sen. Benjamin Cardin, D-Md., has introduced a bill that would allow newspapers to restructure as non-profits.
This week’s FTC program drew speakers from across the traditional and new media landscapes, including Arianna Huffington, co-founder and editor-in-chief of The Huffington Post Web site; Paul Steiger, former managing editor of The Wall Street Journal; and Len Downie, former executive editor of The Washington Post.
Also participating Tuesday and Wednesday were executives from Google Inc. and Yahoo Inc. and Henry Waxman, D-Calif., chairman of the House Energy and Commerce Committee.
One fundamental problem facing the media industry, Murdoch said, is that “technology makes it cheap and easy to distribute news for anyone with Internet access, but producing journalism is expensive.”
“Right now there is a huge gap in costs,” he said, adding that the solution is for media companies to charge for content and stop aggregators from “feeding off the hard-earned efforts and investments of others.”
News Corp. already charges for online access to The Wall Street Journal and it plans to expand that to other publications.
Murdoch also called on the government to rewrite “outdated” regulations that limit the number and type of media outlets that one company can own, including rules that prohibit the same company – such as his own – from owning a newspaper and television station in the same market.
These restrictions, Murdoch said, were put in place years ago – long before the Internet exploded on the scene, bringing all sorts of new media voices and platforms.