13 August 2009

How Murdoch Will Charge For Content.

Ironically for someone billed as the staunchest defender of 'free markets', Rupert Murdoch has largely made his money from doing the opposite - creating mini-monopolies and shutting out competition - from monopolies on football and films to loss leading prices to drive out competitors in the newspaper market.

Whether it is his vicious opposition to the European Union regulators which open up competition, or his manipulation of governments to combat unions, restrict the BBC, allow him to buy into ITV or own 40% of the newspaper market, Murdoch is a clever operator.

So, my guess, is that his latest wheeze - charging for internet content, will follow the same pattern.

There is speculation and actually some admiration for this attempt to make serious money from internet news. A lot of commentators think it cannot be done, but none are willing to write Murdoch off, as every other venture he touches as eventually turned to gold. Plus he is now too big to fail - just as the banks had to lend him money in the 1990s when he was on the brink, they will have to again - he owes them too much to do otherwise.

Murdoch has tentatively announced that from June next year he will start charging. Why June, well my guess is that we will have the Tories in power by then, who have probably already promised him some legislation to help him out - maybe a selling off of the BBC website to private hands - maybe even his, though I doubt they will be that obvious.

I think Murdoch will use his vast business empire to tie in subcriptions to the Sun and Times websites. So expect Sky subscribers (both TV and broadband) to get 'free' access thrown in (at least initially), maybe even link access to buying the paper version in some way. Pay-per-view and monthly/yearly subscriptions will not allow Murdoch to create the monopoly he wants or to cross-promote so easily (something he successfully lobbied government to stop the BBC doing).

One way or another, Murdoch will probably have one more trick up his dirty digger sleeves. We shall soon see. I hope he fails, obviously.

Oh and one last thing, before anyone says he is 'self-made' remember he inherited a newspaper and had his rich dad get him into Oxford. Hardly poor.

No comments:

Post a Comment