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News Corporation to Charge for Online Content

Following on from our recent article covering the dilemma facing the New York Times and how it is struggling to find an appropriate means to drive sufficient revenue from its online assets to make it cost worthy to continue offering them and to be able to be profitable.

News Corporation has announced that it will soon be making all of its online sites fee-based for access to news and other content. As with the New York Times, News Corporation has been suffering from falling revenues, with $3.4 billion USD lost in the twelve months ending June. For a company that grew from being a newspaper owner into becoming a major media conglomerate that also has exposure in Cable news, Satellite television, as well as newspapers all over the globe.

While one of News Corporation's online assets already works successfully through a fee-based portal, the Wall Street Journal is still something of a niche newspaper compared to the broader appeal other titles within the News Corporation stable.

How News Corporation assets are going to make their offerings sufficiently differentiated and value-added over free or advertising-supported news sources is not known, but it will have to be something spectacular. Many of the assets held by News Corporation are generally regarded as tabloid-quality, not only for their printing format, but also for the standard of reporting and content provided. Is the market willing to pay for this content large enough to be worthwhile? With such a massive hole in earnings, it looks like News Corporation doesn't have much choice.

News Corporation's move will open the door for other organisations to follow, not least of which being the New York Times, but it all hinges on the move being profitable for News Corporation. When state-sponsored news agencies such as the BBC, and the Australian Broadcasting Corporation, continue to exist and deliver original and quality researched reporting for no cost to the end user (thanks to licence payers or tax-payers), it is going to make it difficult to claim that what is available commercially is better to the extent that it is worth paying directly for it rather than viewing it through advertising support.

7 August 2009

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