Murdoch Posts Big Fat Profits

Rupert Murdoch’s News Corporation announced quarterly profits of $254 million today. It’s a sure sign that, as the industry leader plans to make readers pay for the online content of all its newspapers, including The Wall Street Journal and the Times of London, more and more newspapers will try to emulate News Corp.’s success. That means, at least in part, putting online content behind a paywall. In other words, the sun may be setting on the era of free online news.

I commented earlier on Alan Rusbridger’s speech in which, as editor-in-chief, he defended his decision to keep all online content at The Guardian free. His two primary reasons were that putting content behind a paywall would curtail advertising revenue steeply and that the spirit of the Internet is more Open than Closed, thus charging for online content would dare to contradict the Zeitgeist.

And though Murdoch said he neither listened to nor read Rusbridger’s speech, he was ready to call his pledge to preserve free online content “BS”. To be sure, Murdoch is blowing smoke. Rusbridger was the first to admit that if paywalls prove successful then The Guardian wouldn’t and couldn’t hold out forever.

While most of News Corp.’s revenue comes from TV (FOX) and film (Twentieth Century Fox), Editor’s Web Blog reports that 29% of their newly reported revenue comes from its newspapers, of which The Sun has been the most successful at increasing its profit margin.

News Corp. is also reportedly in negotiations with Apple’s iPad and Amazon’s Kindle to establish a subscription service for its papers allowing owners of the devices to access News Corp.’s newspapers anytime, anywhere, for a fee.

While the New York Times is slowly building its own paywall system, some smaller papers are looking for outside help to monetize their online content. Today’s New York Times reports that new software called Press + will help newspapers sell their online content to their readers.