Unasked for advice: what Rupert Murdoch can learn from the music business
When Rupert growls, the newspaper industry listens. Of course, it helps that he is airing his plans for readers of News Corp publications to pay for online content right bang at the start of the silly season when there just …
When Rupert growls, the newspaper industry listens. Of course, it helps that he is airing his plans for readers of News Corp publications to pay for online content right bang at the start of the silly season when there just isn’t a lot else going on. These pronouncements also come at a time when the newspaper industry feels like starting the final countdown clock such is the doom and gloom about the place. Just as the music industry saw Steve Jobs as its knight in a black poloneck on a white horse, Rupe may be about to play a similar role for the media business.
There have been a plethora of pieces about the current state of affairs coming from every direction – Elaine Byrne, for instance, has a very good piece in today’s paper about how the current recession will change this industry – but few have actually done what Murdoch has done and stated the bleeding obvious. In a time when advertising revenue is not enough to pay the bills, online content cannot continue to be free.
In this aspect alone, Murdoch is more at the races than the music business has been for the last few years. As the “advertising will pay for everything online” chickens come home to roost, there are still some in the business of selling music who think this is just a blip we’re going through. You can’t really blame them because, for the last few years, every single new business model pimp in the business was promising scams which would deliver the sun, the moon and the stars for a bite of their catalogue. And what was paying for all these nibbles? Oh yes, advertising revenue. Did it not strike people that if advertising revenue was suddenly so much in demand that there were would be a corresponding rise in outlets for this limited ad revenue meaning less to go around for everyone? Junior Cert economics, dudes.
That aside, all eyes are now on how News Corp will implement the wishes of their lord and master. Yesterday’s Guardian took a look at how the music, movie and games industries have dealt with the issue of getting customers to pay for online content. In the case of the music business, Kevin Anderson mentioned the obvious bits and bobs like pay-per-track downloads, streaming subscriptions and value-added products.
A variation on the above could be utilised by News Corp when it goes to war next year with probably a relaunched Sunday Times website. But again, it’s the bleeding obvious lessons which need to be learned and implemented. After all, these are the lessons the music business did not take onboard until it was too late.
For a start, the customer is now king, something which some of the record labels have still not taken onboard. The reason why iTunes and Spotify proved to be the winners in the great online raffle rather than Spiralfrog, PressPlay or MusicNet is because they gave the customer just what he or she is looking for, rather than what the industry thought they wanted. Punters wanted a system which was a no-brainer, a brilliantly deep and wide catalogue and superb ease of use. The record labels spent millions – and years – coming up with their own harebrained online schemes and plans which their customers didn’t use because those sites were too bulky and unwieldy. Note to the Digger: there is no point in spending millions coming up with an all-singing, all-dancing newspaper site where the payment system is as complicated as the business analysis.
Another challenge which Murdoch will face is getting all his peers on the same page. While every single newspaper owner will, for once (well, maybe aside from Wapping and they certainly didn’t cheer him in public for that) salute Murdoch’s aims in this regard, there is bound to be a few rufuseniks who will see this as a golden opportunity. If everyone else is charging for their content, they will reason, we can remain free and reap the rewards. A quick look at how the music industry dealt with piracy and filesharing will show him a couple of examples of what not to do in this regard.
But the biggest challenge Murdoch and every other player in the newspaper business will face is how to get people to pay for a product which they have become used to consuming for free. Sure, there are sites which you need to pay a subscription or a per-article fee, but these are premium products in the main and aimed at a very specialised, usually niche audience. What we’re talking about here is implementing a payment system for products which many people have never paid for. But here again come those aforementioned Junior Cert economics lessons. You may have less readers, but you will at least have more revenue than you had starting out. And, unlike the music business which continued to spend money it didn’t have and would never earn on ridiculous superstar contracts and all the trimmings, this will mean less resources all round. Time to batten down them hatches.