Media mogul Rupert Murdoch has been causing quite a stir recently by threatening to block Google from News Corp sites. The reason for doing so is that he believes search engines are effectively stealing his content by displaying headlines in search results.
However, according to Google they send news organisations “about 100,000 clicks every minute”, whilst Hitwise also claim that 25% of WSJ.com’s traffic is from Google, so can News Corp really afford to lose this huge source of traffic and revenue? According to Murdoch they can, and in a recent interview with Sky News he said:
“What’s the point of having someone come occasionally, who likes the headline they see in Google, come to us? Sure, we can go out and say we have so many millions of visitors, you’d better advertise, and so on. The fact is, there’s not enough advertising in the world to go around to make all the web sites profitable. We’d rather have fewer people coming to our web sites but paying.”
It’s a bold move, yet News Corp’s newspaper unit have recently announced an 81% drop in operating income due to advertisers cutting back and people ditching their newspapers and going online. So if readers aren’t willing to pay for a newspaper then what makes Murdoch think they’ll suddenly start paying for news online, especially with thousands of other free sources of news just a matter of clicks away.
If your content is unique then people may have no choice but to pay for it, but when it’s the same story everyone’s reporting on you might have a hard time justifying asking for money. Also, where are these paid subscriptions going to come from? Subscriptions from the current readers of News Corps sites will only stretch so far, after that it could be a slow trickle of new signups without the help of Google.
Whilst Murdoch may like to think he’s got Google over a barrel, with plenty of other news results they can return from other reputable sites the reality is that for now they will remain relatively untouched. Perhaps if News Corp were to rally the troops and get all major news outlets working together then not only would readers feel more inclined to pay (providing they all went paid-only) but Google would lose its major sources of news, instead having to rely on less reputable sites and active bloggers. However, solidarity on such a scale is unrealistic, and many of News Corp competitors are no doubt hoping this move will fail, thereby driving more news-hungry readers their way.
The latest reports are that News Corp are now in talks with Microsoft, owners of Bing, discussing indexing exclusivity for a price, but will people really use a different search engine just to read news which they can read in countless other places?
Tags: dave lees, Natural Search (SEO)
David, I think this is an interesting article. Maybe Murdoch and all the others committed corporate suicide 10 years ago when they first made the decision to offer their content for free based on the ad funded model. By doing that they set an expectation in the consumer mind that could never really be broken.
The only thing that’s slighly baffling is how they can make freesheets work as a business and not web publishing outlets. I would have thought freesheets are more expensive to produce. I imagine that they also charge a lot more for the ad space. The price of a page in Metro was certainly pretty high 7 years ago when it was first launched. Maybe the ad funded model has yet to reach full maturity in terms of corect ad pricing on quality news outlet sites and Mr. Murdoch is jumping too soon.
Hi Hugh,
I think even the freesheets are struggling at the moment. Earlier this year Metro International announced a third-quarter net loss of almost 9 million euros and thelondonpaper also stopped publication.
Whilst the recession may be coming to an end, it’s hurt both free newspapers and paid ones who rely heavily on advertising.
If News Corps losses are mainly down to the recession and a drop in advertising revenue then I agree Murdoch could be jumping too soon. He should instead be waiting for the economy to bounce back rather than charging for news which is freely accessible elsewhere.
Dave