Murdoch’s Questionable Strategy

Rupert Murdoch has long expressed concern about the fate of his entities amid the free culture of the web. The media magnate condemns the economics of the internet, saying that giving away content isn’t a feasible business model. And he’s directed particular enmity toward Google, claiming it makes money by stealing the content created by his companies.

Murdoch’s recent mutterings, though, are escalating the rhetoric and speculation. First, he said he was on the verge of blocking Google from linking to any Murdoch content, and vowing to finally erect a pay-wall around his material. He even implied that he would fight fair use laws.

And next he announced that he was considering entering an agreement with Microsoft’s Bing, giving it exclusive search rights to all News Corporation content.

With Murdoch front and center in the discussion of digital media, it’s worthwhile to speculate on the repercussions of his plans if they actually were to take place.

Let’s begin with the subject hovering over all establishment media companies: charging for access to content. Murdoch’s News Corp. owns broadcast, film and print publications, but his initial volley is putting a price on his newspapers’ offerings. Of these papers, the reputable Wall Street Journal already is one of the online publications that charges for premium content, so this isn’t much of a deviation from business as usual. His New York Post, while a popular tabloid in the Big Apple, would likely lose readers to the free sites in that competitive market. And his Queens and Brooklyn community papers are the ones that need eyeballs to garner online advertising in the hyperlocal market; the amount he collects in small subscriptions would be negligible while leading to a decline in site visitors.

Similarly, precluding his content from appearing in Google search would be a questionable move. Google has the largest share of search by a long shot; people are already accustomed to using it on a daily basis. The moment Google is shut out is when the clicks to News Corp. material will dissipate. That is not a winning formula in these days when building market share is crucial to online success. It may make some money from Microsoft for the rights, but it’s debatable whether News Corp. has strong enough brand and quality to lead to a major behavioral shift in readers’ search habits.

Lastly, challenging the fair use laws. This is a most likely an idle threat. Few media corporations would risk going to court for fear that fair use might be made even stronger in the digital era. Fair use affirmation by judges would weaken the arguments of Murdoch and others seeking to limit access to their content.

At this quick glance, it doesn’t appear as if Murdoch’s latest rumblings are practical or realistic. Rather, they look like attempts to shake up existing practices and encourage other media companies to join his folly.