Rupert Murdoch – “people will have to pay for online news”

At the annual Cable Show event in Washington last week Rupert Murdoch, CEO of News Corp. offered the view that online advertising will not generate enough revenue to cover the costs of publication of online news portals.

“People are used to reading everything on the net for free and that’s going to have to change,” he remarked.

Murdoch cited the New York Times as an example of a major newspaper that is currently unable to offset costs through internet ads.

Commentators have noted that Murdoch’s company owns the Wall Street Journal, which is one of the few big publications in the US to charge its readers – and has done so for a good many years. However, News Corp also operates the Times a newspaper that offers its content free online.

I however disagree. I think it far more likely that as media continues to fragment content will remain free but evolve into two distinct camps. The first will see the consolidation of remaining mainstream media into multinational corporations such as News Corp that will become less dependent on a single medium such as print or TV and a single geography that might be prone to an economic downturn. Such a company like News Corp will have suficient scale and flexibility to be able to invest in and experiment with ‘new media’ and will, to be blunt, too big for banks to allow to fail.

The second camp will be populated by niche publications such as Techcrunch, serving distinct yet sophisticated online audiences who engage with the publication through social media and their own citizen journalism in the form of blogs and Twitter feeds.

The question I would like to pose – Which camp is likely to be the most influential going forward?…

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