STAFF NEWS & ANALYSIS
Murdoch on Journalism and Freedom
By Staff News & Analysis - December 09, 2009

We are at a time when many news enterprises are shutting down or scaling back. No doubt you will hear some tell you that journalism is in dire shape, and the triumph of digital is to blame. My message is just the opposite. The future of journalism is more promising than ever- limited only by editors and producers unwilling to fight for their readers and viewers, or government using its heavy hand either to overregulate or subsidize us. From the beginning, newspapers have prospered for one reason: the trust that comes from representing their readers' interests and giving them the news that's important to them. That means covering the communities where they live, exposing government or business corruption, and standing up to the rich and powerful. – Rupert Murdoch (pictured left) in the Wall Street Journal

Dominant Social Theme: These are challenging times for honest brokers of the news – but we shall persevere!

Free-Market Analysis: We are inspired by Rupert Murdoch's words! We too think the future of journalism is promising and we don't want the "heavy hand" of government to over-regulate or subsidize us either. Rupert stands for all us! He is speaking out for the little scribe in the basement and the big shot writing on his expensive computer in the penthouse. Or maybe not.

Yes, these remarks, which the Journal tells us were made on Dec. 1 before the Federal Trade Commission's workshop on journalism and the Internet, are interesting indeed. On breaking them down, we can arrive at some very interesting conclusions as to what‘s going on in Murdoch's IQ-engorged brain. (And yes we love doing this because every time Murdoch gives one of these speeches he is metaphorically and metaphysically writhing in the wind. He is the Hamlet of media moguls!)

Here's more:

First, media companies need to give people the news they want. I can't tell you how many papers I have visited where they have a wall of journalism prizes-and a rapidly declining circulation. This tells me the editors are producing news for themselves-instead of news that is relevant to their customers. A news organization's most important asset is the trust it has with its readers, a bond that reflects the readers' confidence that editors are looking out for their needs and interests.

At News Corp., we have been working for two years on a project that would use a portion of our broadcast spectrum to bring our TV offerings-and maybe even our newspaper content- to mobile devices. Today's news consumers do not want to be chained to a box in their homes or offices to get their favorite news and entertainment-and our plan includes the needs of the next wave of TV viewing by going mobile. …

My second point follows from my first: Quality content is not free. In the future, good journalism will depend on the ability of a news organization to attract customers by providing news and information they are willing to pay for. The old business model based mainly on advertising is dead. Let's face it: A business model that relies primarily on online advertising cannot sustain newspapers over the long term. The reason is simple arithmetic. Though online advertising is increasing, that increase is only a fraction of what is being lost with print advertising. …

That's not going to change, even in a boom. The reason is that the old model was founded on quasimonopolies such as classified advertising, which has been decimated by new and cheaper competitors such as Craigslist, Monster.com, and so on. In the new business model, we will be charging consumers for the news we provide on our Internet sites. The critics say people won't pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don't get something for nothing.

That goes for some of our friends online too. And yet there are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production. Some rewrite, at times without attribution, the news stories of expensive and distinguished journalists who invested days, weeks or even months in their stories-all under the tattered veil of "fair use." These people are not investing in journalism. They are feeding off the hard-earned efforts and investments of others. And their almost wholesale misappropriation of our stories is not "fair use." To be impolite, it's theft. Right now content creators bear all the costs, while aggregators enjoy many of the benefits. In the long term, this is untenable. …

Finally, a few words about government … Unfortunately, too many of the mechanisms government uses to regulate the news and information business in this new century are based on 20th-century assumptions and business models. If we are really concerned about the survival of newspapers and other journalistic enterprises, the best thing government can do is to get rid of the arbitrary and contradictory regulations that actually prevent people from investing in these businesses. One example of outdated thinking is the FCC's cross-ownership rule that prevents people from owning, say, a television station and a newspaper in the same market. Many of these rules were written when competition was limited because of the huge up-front costs.

We have written before, after reading a truncated version of these remarks, that Murdoch had not come up with anything much that is really new. He has not, in other words, cut the Gordian knot that obsesses him. But in reading what he has in mind in more detail, above, we think we can finally discern a strategy.

First of all the remarks establish what we have been writing for years actually, that the media business in the 20th century was a monopoly based on scarcity. Murdoch acknowledges as much and then goes on (if you read between the lines) to acknowledge as well that his problem today is that there is too MUCH news about. (Of course it is not actually the quantity of news but the quality. Murdoch's mainstream publications simply cannot tell the truth about the world the way the Internet can and does. The result is that he is bleeding readers. It is very simple, but a terrible conundrum for Murdoch.)

Now OUR reaction to too MUCH news (especially hard-hitting, truthful news) would be to write BETTER news and analysis so as to capture the attention of thought leaders. Murdoch, after all, states that his media properties must produce news and information that is relevant to readers. He speaks of bonds of trusts. And then right after making these profound points HE STARTS SPEAKING ABOUT TECHNOLOGY. This is a non-sequitor, dear reader, and we argue that is not by accident. See, that's all he can do, revert back to the brute muscle of the 20th century. He can't produce better quality journalism, so he will do the only thing he can do which is create better PLATFORMS and hope he will gain his penetration that way.

OK, point two. Quality content is not free, Murdoch says. Well, "quality" is in the eye of the beholder. But he's not really concerned about quality, in our humble estimation. What point two is about, is threatening content aggregators like Google. Murdoch wants to try to redefine fair use (which means redefining Western civ in our opinion) and in the process he is going to strike hard at Google and others via litigation. He's going to use laws, regs and his pocketbook to bludgeon content aggregators.

Point three? Rupert is really wonderful here. As a total media monopolist who derives his advantages from mercantilism in so many ways, he nonetheless strikes the free-market pose. He wants government out of the media, and he certainly wants those pesky laws out of the way that prevent him from extending his monopolies across platforms (which is very important to him if he is to dominate once again along with the other media mercantilists).

So there we have Murdoch's latest thinking. He all but admits the monopolist advantages of the 20th century have departed from the news business (which is problematic for him but not for us!). And his solution is tripartite. First, he will seek to use his financial muscle to extend his news platforms so that Murdoch media will be EVERYWHERE.

Second, Murdoch will attack news aggregation and fair use practices to prevent other entities from reusing the press releases and generic analysis from which many of his OWN stories are cobbled together. The point is that he will use his financial muscle to make being in the news business as miserable as possible for everyone else.

Finally, Murdoch is going to lobby like heck to unconstrain major media players. He is not going to get readers by writing or thinking better. So he is going to have to try to drown out the competition and he will do it by penetrating as much major media as possible, by launching new platforms, by buying up the competition when he has to, and generally blanketing the world with Murdoch-all-the-time.

Listen to Murdoch and we believe you can get a clear sense of how the power elite (which seems to respect Murdoch and funds him) is going to try to reposition their critical media properties to take back the share of mind that they have lost to the ‘Net. The idea is to use powerful, new technological platforms to distribute news and information, litigate to bury the competition and consolidate by undoing legal barriers.

After Thoughts

He's going to out-distribute, out-litigate and out-lobby the blogosphere. But he's not going to out-write it because he can't.

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