Rupert Murdoch Admits, Once Again, He Can't Make Money Online -- Begs Facebook To Just Give Him Money
from the that's-not-a-business-model dept
There's no denying that Rupert Murdoch built up quite a media empire over the decades -- but that was almost all entirely focused on newspaper and pay TV. While he's spent the past few decades trying to do stuff on the internet, he has an impressively long list of failures over the years. There are many stories of him buying internet properties (Delphi, MySpace, Photobucket) or starting them himself (iGuide, Fox Interactive, The Daily) and driving them into the ground (or just flopping right out of the gate). While his willingness to embrace the internet early and to try things is to be commended, his regular failures to make his internet ventures successful has pretty clearly soured him on the internet entirely over the years.
Indeed, over the past few years, Murdoch or Murdoch surrogates (frequently News Corp's CEO Robert Thomson) have bashed the internet at every opportunity, no matter how ridiculous. Almost all of these complaints can be summed up simply: big internet companies are making money and News Corp. isn't -- and therefore the problem is with those other companies which should be forced to give News Corp. money.
A few years back, I ended up at a small media conference where Rupert's son James Murdoch spoke at great length about his plans for News Corps' internet business -- and what struck me was that he was almost 100% focused on copying the pay TV model. This wasn't a huge surprise -- I think at the time he was running Sky TV -- but it shocked me that he appeared to think through force of will he could turn the internet into a walled garden a la cable and satellite TV systems. Not surprisingly, Rupert is thinking along similar lines, and earlier this week released a bizarre and silly statement saying Facebook should start paying news sites "carriage fees" a la cable companies:
The time has come to consider a different route. If Facebook wants to recognize ‘trusted’ publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies. The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services. Carriage payments would have a minor impact on Facebook’s profits but a major impact on the prospects for publishers and journalists.
We've seen this kind of thinking many times before. First the argument was used against Craigslist. Then Google. And now, apparently, Facebook. The short version is "these internet companies are making money, we news companies aren't -- ergo, the successful internet companies should be paying the failing news companies." For someone who claims to be a died-in-the-wool free market capitalism supporter and who insists that socialism is "immoral," I can't help but note that this appears to be Rupert Murdoch asking for successful companies to subsidize his failing companies in the interest of "social value."
Indeed, contrast his begging Facebook for handouts with his pro-capitalism speech from a few years ago. In it, he notes that "to succeed, you have to produce something that other people are willing to pay for." And that's just the thing, Rupert, the market dynamics here say that no one is willing to pay to "carry" your news. Tony Haile, the former CEO of Chartbeat and the founder of a new company Skroll that is working on media business models (and, randomly, who I met at that very same conference where James Murdoch spouted his nonsense) has laid out a pretty clear explanation for why the carriage fee model doesn't make any sense at all on the internet. The market dynamics are totally different -- the leverage and value positions of the players are different, the value to the end users is different and the market barriers to entry are totally different, meaning a totally different competitive market.
Indeed, the internet and Murdoch's reaction to it are truly fascinating, as they strip away The Emperor's New Clothes concerning Murdoch's supposed support of free market capitalism. He claims to be in favor of it when it helps him to accumulate hoards of cash, but as soon as he can't build a successful competitive business, he suddenly resorts to the "immoral" position he supposedly loathes -- demanding that the other successful operations just fork over money to him because he (claims he) provides tremendous social value.
There are, of course, plenty of discussions to be had about media business models -- and the power that companies like Google and Facebook hold. But to merely demand they hand over "carriage fees" just because makes no sense. It's a weak demand from someone who failed in the market and has no desire to truly innovate or compete. It ignores, too, that such a setup would only entrench existing players and harm upstarts and competitors. The whole thing is quite silly -- but also quite incredible for what it truly reveals about Murdoch's actual feelings for a free market when he's on the losing end of one.
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Filed Under: business models, cable tv, capitalism, carriage fees, competition, free market, james murdoch, journalism, news, rupert murdoch, socialism, tony haile
Companies: facebook, news corp.
Reader Comments
The First Word
“What about the creators?
The real value in the news is created by those who create the events being reported on in the first place. So, how much does Rupert want to pay the people who make the news that he wants to report on?Subscribe: RSS
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The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
YES, if don't have to pay for THE CONTENT THAT DRAWS THE AUDIENCE, then gaining money on "teh internets" is easy.
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Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
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Re: Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
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Re: Re: Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
Google at this point could probably survive without "google". The search engine is of course their most noticed and famous part, but at this point it is only one part of a much greater whole.
Facebook isn't about news at all. They could drop the news stuff totally and still do just fine.
So no, google and facebook are not demanding free content. They are just making use of what is available. As a side effect they are providing more viewers for those news groups. Just look at the time google cut off some of the news groups, they had a total fit due to lost traffic. Now look at the recent news that facebook is hiding news in feeds, the news companies are again freaking out.
Sure seems like these publishers realize the benefit of having their content shared on Google and Facebook, they are just mad that they can't figure out how to make money from it.
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Re: Re: Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
But he still allows them to link, because Facebook and Google are adding value. Sending people to his sites that otherwise might not find them let alone look for them.
One can imaging Murdoch's content sources adopting the same attitude. "You want to report on our political/police/corporate press conference? You want to play a clip of our new movie in your talk show? You want to use OUR content for free? You should pay us a carriage fee!"
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Re: Re: Re: Re: The accurate short version is "these internet companies are making money" -- it's a crime. Share it fairly but don't take a slice of my pie. Money, so they say Is the root of all evil today.
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Re: Re: Re: Re: Re: The accurate short version is "these internet companies are making money" -- it's a crime. Share it fairly but don't take a slice of my pie. Money, so they say Is the root of all evil today.
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Re: Re: Re: Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
So if Facebook and others owe Murdoch carriage fees, Murdoch would in turn owe a share of the advertising revenue to Facebook!
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Re: Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
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Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
Just because you spend money creating something does not mean that you will make a profit, and it most certainly does not mean you are entitled to a profit.
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Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
;)
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Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
Come back when you know what it does.
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Re: The accurate short version is "these internet companies are making money" -- USING OUR CONTENT FOR FREE.
Nobody gives a shit what you paid to create something. If the market value is less than that, then that's wht the market pays.
"See the "can't compete" piece in which he assumes only cost of a movie is for bandwidth! "
Is that like the one where lying assholes like you believe that it's the only cost of a platform like Google, and you demand their services for free?
"YES, if don't have to pay for THE CONTENT THAT DRAWS THE AUDIENCE"
I use Facebook with or without the lies spewing from Murdoch's rags. I get more entertainment watching you act like a mental patient who's been let out into the yard for 5 minutes. You provide more entertainment for free than most of the movie you demand people pay greater than market value for.
Thank you, idiot, for your free work.
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It is possible that people will get mad enough at Facebook that Facebook might be willing to open up discussions.
Then again, it is entirely possible that people will get fed up with non-working links and move on to publishers that do work.
But, you've probably thought about the latter possibility, haven't you...
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Re:
Given that his "empire" includes the UK's Sun, I think the latter is more likely.
http://www.bbc.co.uk/news/uk-england-merseyside-17113382
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Re: Re:
He also gave us the News International phone hacking scandal. All those celebrities, politicians, royals, murdered schoolgirls, dead soldiers and terrorist victims having had their phones hacked and the contents reported on.
I'm confused. By Murdoch's logic, should he be paying them a carriage fee, or should they be paying him?
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Re: Re: Re:
British humorist Saki (H.H. Munro) asked the same question over a century ago, in his sketch "The Unkindest Blow"-- two celebrities go "on strike" (threaten to reconcile) for a share of the media profits in their scandalous public divorce.
https://americanliterature.com/author/hh-munro-saki/short-story/the-unkindest-blow
The web site says "americanliterature", but Saki was a British writer.
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Yup!! You'll find these values are always flexible. Individual rights unless it is a woman, or states rights unless they do something involving net neutrality, or weed, or whatever. There's nothing BUT exceptions to these values.
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Re: Is "Libertarian" an Oxymoron?
It's an immature intellectual dead end whose sole purpose is to justify selfishness. In practice... see Kansas for details. The worst part is they seem to believe that every event occurs in a vacuum so there's no point in trying to learn from mistakes. As for empiricism... they don't need no steenking empiricism.
Anyone demonstrating that kind of attitude will lose me at "Hello."
That said, they have their uses. They generally help when campaigning against government overreach, etc., so the lesson to learn is that we need them, but in the back seat, not at the steering wheel.
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Re: Re: Is "Libertarian" an Oxymoron?
Another part of the Libertarian platform -- and a far larger part than free markets -- is human rights. If you oppose everything Libertarians stand for, you'll find yourself more closely related to the fascists than anyone else.
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Re: Re: Re: Is "Libertarian" an Oxymoron?
They're pretty damn good at standing up to government overreach and I appreciate every bit of help I've ever had with campaigns against it.
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Murdoch
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Re: Murdoch
https://en.wikipedia.org/wiki/K_Foundation_Burn_a_Million_Quid
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Re: Murdoch
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Re: Re: Murdoch
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Pay you for sending people to you? Ok, you're off the 'trusted' list!
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You can give it a spin
A lot of the commosion has been about "fake news". While the concept is hard to solidly prove, some fact checkers are doing a fine job at, at least, categorizing the most fishy stories according to "sloppy research", "hearsay" and other parameters. While few wants Murdoch to have that job, a lot of media are at least trying to check their sources before running them. Thus there are indeed similarities between older format news media interest and facebooks wish for a better image.
While paying the news-sources on their credbility is not sensible, there is an argument for paying fact checkers to supply an analysis.
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Re: You can give it a spin
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Re: Re: You can give it a spin
https://evolvepolitics.com/conservative-party-information-officer-caught-circulating-faked- jeremy-corbyn-images-online/
If it's true I am vastly amused at the thought of Our Tess's minions being hoist by their own petard.
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Socialism is only bad...
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Re: Socialism is only bad...
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This means that in essence, Facebook has been providing its customers with free access to information they previously had to either pay News Corp for, or view News Corp ads to see.
If Murdoch believes in the free market, it makes total sense for him to turn around and say "If you want to publish our work, you need to pay us for the privilege."
Of course, due to the market dynamics discussed in this article, the result of that would only be fewer people seeing News Corp's work, not more money flowing into News Corp's coffers. This is because there are lots of OTHER news sources more than willing to give their content away for free.
But this is kind of moot now, as Facebook has just restructured their news feeds to prioritize customer-sourced information over that provided by third parties like News Corp. So at this point, Murdoch's stance will do nothing other than accelerate News Corp's irrelevance.
After all, we live in a world where News Corp's assets get much of the news they publish from Twitter and Reddit; Facebook can easily harvest the same sources programmatically and target their customers more precisely.
And what if Twitter and Reddit turned around and presented the same argument to News Corp? Would Murdoch be able to stay in business if they stopped using these feeds or had to pay for access?
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Re:
Really? I mean, really? Or isn't it rather Facebook users that link to Murdoch's content?
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Re:
No, they really haven't.
"After all, we live in a world where News Corp's assets get much of the news they publish from Twitter and Reddit; "
This is actually a good point. His papers have never exactly been filled with real journalists, but so many current stories do consist of "X said Y on social media". It would be a nice turnaround for those sites to start demanding some kind of payment for their services. It would be very silly, but no more so than the whining here.
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What about the creators?
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Re: What about the creators?
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Re: Re: What about the creators?
Actually, this is happening now. Why else are teenagers eating Tide Pods laundry detergent or doing any number of "challenges"? To post their video on YouTube and get attention.
Or was your comment sarcasm and I wasn't supposed to answer it? :)
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Re: What about the creators?
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"Trusted News" was once called "The Lamestream Media"
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Re:
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Re: Re:
Trump is a money-launderer for the mob.
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Re:
Every die-hard capitalist is one business failure away from becoming a socialist.
Every die hard free marketeer is one business success away from becoming a monopolist!
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As usual
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Re: As usual
Pity that the wall that the gate is in has been climbed over, tunnelled under & finally knocked down with only the gate remaining, with Rupert in front of it declaring none shall pass through this gate without payment to me.
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If you’re technologically incompetent, blame social media!
This demonstrates a laughably naive understanding of the Web. Since Facebook users (not Facebook) are the ones who post links to Murdoch content, the only way to implement his carriage fee idea would be some sort of “link tax” charged to each user who attempts to copy a URI from a Murdoch site. This would obviously have nothing to do with the big, bad social media giants Murdoch is bashing, but apparently jumping on bandwagons is fun.
If Murdoch wants to use EME or something similar to charge Web users from sharing News Corp. content, he will be guaranteed to outlive his media empire. With this level of technological incompetence, it’s no suprise that MySpace is long dead.
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Re: If you’re technologically incompetent, blame social media!
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I think leaving broadcast TV out of the list is a pretty serious oversight. His company did create the fourth major broadcast network.
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Reaping what you sow
This is about plundering profits. As regulation fell and media began to consolidate, wages also began to depress. Starting wages were lower, raises became fewer, and yet profits went up. Positions were cut, more was demanded from remaining employees, and they took up the slack as long as they could.
Then, the entire ad department was fired. Because ad-networks were cheaper! It was all money flowing in and almost no money spent to get it! And all that money went right to top! Executive salaries, bonuses, shareholder dividends and more! And even more employees were let go because retyping an article from AP and Reuters was easy! (seriously, this is the reason you can clip together the exact same phrases from innumerable "news" sources on any given news day)
Mo' Money in the pockets of those wearing $3,000 business suits, and no end in sight! Well, until revenue began to decline because of disinterest, failure to keep up with a changing marketplace, adblocking because of bad actors on those ad networks, copy editors and others constrained by ultra-conservative (in the "change is scary sense", not the political one) bosses who feared changing a thing because it'd be their head next.
Now the suits are feeling the pressure, seeing the empire toppling and no way to save it. So they try to brute force others into saving them, wanting Facebook and Google to pay them for giving them traffic in the first place, demanding more from those already desperately trying to help them stay relevant, all the while drinking champagne and smoking cigars as the icy waters creep ever closer up the deck.
The band already left. The captain too. The keel has snapped in half and the waters are coming on fast. And there is no ballroom door waiting for them in the water.
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Not long before he's forced by shareholders to step down. All it will take is a few weird irrational decisions that cost them a few hundred million.
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By his logic, he needs to pay me for the above statement.
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