A reader writes:
Murdoch's view that his content is valuable is completely accurate. And I think his plan is to try to get cable and telephone companies that sell internet access to pay for it. Although the "horse may be out of the barn" on free content, trusted brands still DO matter...The reality, as so many people point out, is that consumers may not be willing to pay for these brands anymore. But free to the consumer does not have to mean subsidized or solely ad-supported.
So how does a newspaper company make money? By licensing its journalistic content to other companies that can use the valuable content to sell its own services. Who are these companies that may be willing to pay for content? Start with cable and Telcos who sell internet access to consumers.
Internet service is quickly becoming a commodity - with some exceptions, the ISPs all generally offer the same quality and speed of service. Content (and particularly exclusive and expensive content) can become a way to differentiate & grab market share from each other. Walling off formerly free content may be a good first step towards a plan to establishing a market price for the content, and more importantly, establishing a value for the ISPs. and to licensing the rights to his newspaper content to cable and telephone companies who run internet access services.
These companies would receive the rights to offer their broadband subscribers free access to this content ....imagine getting 10 cents per internet user per month across 20 million broadband households as opposed to $10 per month from 100 thousand wall street journal subs. Murdoch's bet would be that at least a few of the ISPs will take him up on the offer, as the "first" will have a competitive advantage, and the "last" would not want to be left out. This strategy has some significant issues ... specifically, (1) will the cable and telcos pay for this content (open question), (2) what will this do to the current pricing for internet access and (3) will this require some level of exclusivity vis a vis the ISPs -- will Murdoch have to pick an ISP to "go exclusive" with for his content.