Sunday, 9 August 2009

What's Rupert up to?

There's a bit of a buzz going round the newspaper industry right now which involves, rather predictably, Rupert Murdoch. He's been intimating a lot of late that free online news content might soon become a thing of the past, at least where his News International titles are concerned.

Well, good luck to him. Rupert may have been pretty shrewd with regard to his business dealings in the past - and this is possibly why the press are taking this idea seriously - but in the long run, I can't possibly see this idea of paying for news content working. Here's why:

Firstly, the internet doesn't respect copy protection. Once one person has content, countless other people do, because copying and distributing a file is insanely easy. There has been much energy expounded and cash spent by record companies to copy-protect their content - and all in vain: getting free albums is easier than ever (legally or illegally). There is nothing to suggest that the newspaper industry would be any more successful in putting a wall around text, which from a technical viewpoint is even easier to copy than music.

The second reason that copy-protecting newspapers will not work has to do with something that - somewhat ironically - Murdoch is very fond of: competition. Even if he finds a viable way to protect his content, where will that leave him? Competing against a bunch of other news organisations that are all offering their content for free. He's partly aware of this, which is why his titles are attacking the BBC so much for publishing free news content...but even if the Beeb was forced to remove or scale back its online news (not entirely unthinkable if the Tories get in next year), there would still be thousands of alternatives delivering quality, free, online news output. And that's before you even consider the blogosphere, an increasingly trusted source of news and comment (if all the big newspapers were to put their content behind a wall, bloggers would have a field day).

Before charging for his content, Murdoch would do well to check out a book called 'Free: The Future of a Radical Price' by Chris Anderson. In it Anderson shows how companies are increasingly using the power of free services or content to access new markets and generate profit. The classic example he cites is Ryanair: it gives its flights away for free in order to sell a bunch of other stuff: car hire, travel insurance, accommodation, train tickets, bus tickets, scratch cards, credit cards...the list is endless. But to date it has worked, albeit at the expense of horrible flights for its customers. And the reason that it has worked is that in truth Ryanair is not actually an airline but a provider of travel services (and anything else it can flog). The free flight is the turnkey that unlocks other - and very big - markets for the company.

And digitally, the power of free content is even more pronounced. Because of its cost-free, copy-and-paste nature, digital technology effectively creates unlimited supply. And as any economist knows, when there's unlimited supply, the price of what's being supplied will drop to zero; it cannot but become free.

Murdoch - and any other digital content provider - can try to fight this; but it's a losing battle. Whether you're a rock band, a filmmaker or a journalist, you simply have to face the fact that the internet is going to make your content available for free, whether you like it or not. Content creators have a choice: to restrict content, and put themselves at a massive disadvantage, or to think creatively as to how they can unleash the power of free content and distribution. It amazes me that somebody as savvy as Murdoch isn't aware of this, and it makes me wonder if there is some ulterior motive behind his floating of his idea of charging for content. It'll be interesting to see how it pans out.

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