Advertisers Bailing On Murdoch's Paywalls As The Company Won't Reveal How Many People See Ads
from the not-looking-good dept
A few weeks back, we pointed to reports suggesting that Rupert Murdoch's paywall experiments with The Times and Sunday Times in London were a disaster, as nearly everyone -- readers, journalists, advertisers and publicists -- were bailing on the publications. Soon after that, however, Murdoch's News Corp. announced plans to also put the big UK tabloid News of the World behind a paywall, with some suggesting that James Murdoch (Rupert's son, who is leading this effort) was seeing success with the other paywalls. However, the evidence on that is still lacking. Instead, we're hearing more and more reports that suggest serious trouble for the Murdochs, father and son, as they double down on an economically dangerous strategy.Simon Dumenco points us to a recent Bloomberg piece that quotes a guy from ad firm Starcom MediaVest, saying that they've cut their ad spend on the Times and Sunday Times by more than 50% because News Corp. won't share with them traffic numbers:
"We wouldn't put our money where we don't know the numbers, just as you wouldn't invest in a stock," [Starcom's Chris] Bailes said.Separately, Bailes notes that, thanks to competition, there are better places to spend their money:
"I can go to the Guardian or CNN and get an audience... No one is indispensable."Of course, we were among the many, many voices that suggested James Murdoch brush up on his economics before pursuing this strategy. Now that he's doubling down, I'd have to, once again, suggest that he update his economic analysis.
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Filed Under: advertisers, james murdoch, news of the world, paywalls
Companies: news corp.
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We could give him some advice
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vast fortunes?
Give it time. Soon enough, he won't be that rich anymore and reality will seep in of it's own accord.
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Economics? Hardly. All that's needed is a reality check and a bit of common sense. I don't think the Murdochs have spent enough time looking at lolcats and know nothing about the internet.
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Re:
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In the words of that...
"Haaaa-haaaa"
Mike is so gracious and sweet. He never posts overt "I Told You So" articles.
He lets us carry the "Neener, neener, neener" load.
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Say Whaaa?
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Re: Say Whaaa?
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Re:
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Sorry: Murdoch can probably sustain losses indefinitely.
And he has accountants to figure out how to write it off to least loss, if not advantage (The Rich used to buy failing business as tax shelters). This is only a small part of the empire, perhaps a deliberate money sink for tax advantage. So don't rule this out just yet. My guess is Murdoch has decided on a long slog. He may have to yield here and there to keep advertisers, but if he chooses not to, he won't have to give in while it's current enough for you to crow about.
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Re: Sorry: Murdoch can probably sustain losses indefinitely.
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Re: Re: Sorry: Murdoch can probably sustain losses indefinitely.
Overall, billionaires aren't subject to the constraints that you're used to, of limited income for instance. Murdoch still has *tons* of money rolling in. Whether he's fixated on this -- and mollifies shareholders by putting money in -- is unknown. He may be literally crazy, it's frequent among the rich, or have goals unknown to us that he values more than money.
But it's definitely annoying arrogance to think that Murdoch doesn't know what he's doing, nor does his army of accountants, and began this apparent folly without a clue. Pretty near certain you're going to be disappointed if you look for him to be on relief anytime soon.
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Re: Re: Re: Sorry: Murdoch can probably sustain losses indefinitely.
He's seen what the recording industry is up to (lobbying for an ISP levy), so he's doing the same: demonstrating that:
1) News-sharing scum are ruining his business
2) There is no possible solution viz 'paywalls don't work'
3) He'll quietly poo-poo any idea of a free market in news
4) He needs an ISP levy to compensate for loss of monopoly
5) Profit!
You can't ask for a levy unless you've been able to kid the public (& their politicians) that it's their fault your business has failed.
Effectively shuttering online newspapers, that weren't earning much anyway, is not expensive if you're going to end up with a levy at the end of it. Remember, a levy is just a cash handout. You don't even have to do any work for it. You just have to show that people are copying your news (or olds) stories contrary to an 18th century privilege called copyright that granted a reproduction monopoly to the press*.
* No-one ever says "Er, hang on? Why did anyone think it was a good idea to sacrifice the public's liberty to share news with each other in order to enrich the press?". The answer is it fitted the desires of the state to suppress sedition (which a beholden press would do). ACTA is a reprise.
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Re: Re: Re: Re: Sorry: Murdoch can probably sustain losses indefinitely.
left hand, right hand....
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Re: Re: Re: Re: Re: Sorry: Murdoch can probably sustain losses indefinitely.
Ceiling cat sees what Murdock is doing
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Re: Re: Re: Re: Re: Sorry: Murdoch can probably sustain losses indefinitely.
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Re: Re: Re: Re: Re: Re: Sorry: Murdoch can probably sustain losses indefinitely.
If you get to charge a fee, you get to reduce or waive it. You also get to own the channel, i.e. no-one else can afford the fees apart from radio stations owned by those who get to charge it.
Same thing works for Media moguls and the ISPs they own. They may well end up being the only ones who own ISPs able to afford the compulsory license fees.
Draconian copyright enforcement is simply softening the public up so they'll beg for an ISP levy.
The state lets it happen because they fancy augmenting the levy with a tax (and enjoying the ability to censor/exclude anyone from the Internet they don't like).
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Re: Re: Re: Sorry: Murdoch can probably sustain losses indefinitely.
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Re: Sorry: Murdoch can probably sustain losses indefinitely.
B. It's a public company, Murdoch has to answer to the shareholders and board of trustees. It's not really his company.
C. There is no such things as "fixed cost" when talking about enduring sustained loss as a company. As in, the advertisers leave, they goto Google or wherever and the property becomes that much less relevant to the industry. You cant put a price on mind share. If you try, it's usually staggering. Just ask Microsoft.
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Don't knock it
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real reason
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Best Paywall Is Subscriber Base
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Wow. Nailed it.
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Wow. Nailed it?
I commented back that his cost-based accounting view of news could also be applied by a fictional advertiser, ACME who says:
Did I get that right?
http://www.techdirt.com/articles/20100903/16545310903.shtml#c226
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News Pirates
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Re: News Pirates
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