Media: All about ... Online revenue models

Will others follow Murdoch's online pricing model, Alasdair Reid asks.

Staunch traditionalists on both the right and left of British public life have always loathed Rupert Murdoch and all that they assume he stands for. They vilified a hugely successful Sun newspaper in the 80s; and they vilified a hugely, and despite all the odds, successful BSkyB in the 90s.

If they've laid off him a bit since circa 1997. The rise to power of Tony Blair's New Labour being a convenient bookend here, this is probably down to a belief that, although he won almost all of the battles he was up for, Murdoch senior lost the war.

He's surely a 20th-century man with 20th-century ideas, hanging on grimly in a 21st-century post-capitalist, green-tinged, wired-up world. His carbon-neutral son James is now the man to watch - and he will, it must be assumed, continue to steer the family concern, News Corp, into a more compliant, consensual sort of a space.

So it has been with a growing sense almost of nostalgia that some observers have been monitoring an incoming tide of green, but not in a nice way, anti-Rupert bile over the past few weeks.

The notion that the House of Murdoch might actually be trying to help save the newspaper industry from its Gormenghast-style anaemic dithering clearly infuriates some people beyond measure. There has, not to put too fine a point upon it, been a curious outbreak of infantilism in some quarters.

You might expect this where the more emotionally volatile sections of the British press are concerned; but it's truly something to see much the same shrill tone surfacing in the user-generated content sections of, for instance, telegraph.co.uk.

And, perhaps predictably, independent technology bloggers (who are, almost by definition, fervently committed to the destruction of all established companies in the content creation business) joined forces last week to emit a particularly sustained and harrowing high-pitched whining noise.

Their latest excuse was the revelation last week by James Harding, the editor of The Times, of more details of the paper's proposed online pricing model. It is set to become a global News Corp blueprint.

1. Although the fine detail has yet to be disclosed, it seems certain that The Times will introduce a two-tier pricing structure. Committed users will be offered unrestricted access for a monthly (or quarterly or yearly) subscription; but in addition you will be able to pay for a comparatively modest sum for a 24-hour access pass.

Some elements of the site will continue to offer universal access for free - headlines, say, and other content teasers - but, despite speculation, there will be no attempt to derive "micropayments" per page viewed. The company's research indicates that there are around 500,000 loyal users with a regular Times habit - and these users would be expected to become the core subscribers.

2. The corollary of this initiative will be a continued determination to remove two divisions of tanks - one belonging to the BBC, the other Google - from the News Corp lawn. Google derives much of its traffic from news searches - but newspaper groups are inadequately rewarded for this. Now News Corp is threatening to block, or partially block, search engines from accessing its newspapers' content.

Talks between News Corp and Microsoft are reported to have taken place to provide Microsoft's Bing search engine with access to content while blocking Google News.

3. And, arguably, the BBC is the more intractable problem. Rival newspaper groups may conceivably fall by the wayside if they fail to develop sustainable business models - but the state-owned and funded BBC has no immediate cash problems and is committed by statute to the free UK distribution of news content. In other words, its presence will always undermine attempts to monetise content.

Last week, Rupert Murdoch stated that he might consider suing the BBC; and is believed to be lobbying Conservative politicians in the hope that a future Conservative government might rein in the BBC's online empire.

4. News Corp's major UK newspaper rivals, Telegraph Media Group and Associated Newspapers, say that they remain agnostic on the question of online pricing and will continue to watch any developments.

WHAT IT MEANS FOR ...

NEWS CORP

- A massive gamble clearly. Yet all those who have the interests of the newspaper industry at heart will wish News Corp well - and WPP's boss, Sir Martin Sorrell, surely spoke for many quarters of the advertising industry when he said he welcomed this move and argued that deriving some form of content revenue was "critical" for the immediate survival of traditional media businesses.

RIVAL MEDIA ORGANISATIONS

- Some strategists within rival media groups reckon they can't lose here. If the News Corp initiative succeeds, they'll merely copy it. If it fails, they have been given the opportunity to steal disaffected Times Online loyalists.

- They perhaps forget that, if Murdoch fails, Google and the BBC still have British newspapers over a barrel.

- But there continues to be a haunting sense of paralysis in some sectors of the industry. Worse, many newspaper executives seem to have embraced a rather curious and sickly Death Cult - it's possible to come away with the impression that they would rather see themselves out of a job and their companies closed down than live to see Murdoch proved right.

SOCIO-POLITICAL INTERCOURSE

- No-one will surely top the recent analysis of Donald Trelford, a former editor of The Observer. When asked to sum up the feasibility of Murdoch's plans from a consumer perspective, he replied: "Will people pay for sex when they are used to getting it for free? Yes, probably, if they want it badly enough."

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