Murdoch says no to U.S. government newspaper bailout
News Corp Chief Executive and newspaper empire builder Rupert Murdoch showed up on the Fox Business Network (which he owns) on Thursday to talk about the future, or lack thereof, of newspapers.
Two key points: News Corp’s papers, which in the United States include The Wall Street Journal, the New York Post and the Ottaway chain of local dailies, will not take government money to help them stay afloat; and there is private financing for media companies out there. Here’s what Murdoch said on those topics, and more. (Thanks for FBN for this transcript)
On how newspapers will make money in the future “Newspapers will make money the way we make it now – from our readers, from our advertisers. Newspapers may look very different. Instead of an analog product printed on paper, you may get it on a panel which will be mobile, which will receive the whole newspaper over the air, and be updated every hour or two. All of these things are possible and some of the greatest electronics companies in the world are working on this right now. I think it’s two or three years away before they get introduced in a big way and then it will probably take ten to fifteen years for the public to swing over.” …
On the future of newspapers on the Web: “You’re going to have to pay for your favorite newspaper on the Web. [Free content online]…that’s going to stop. Newspapers will be selling subscriptions on the Web. The whole thing [premium content] will be there. The Web as it is today will be vastly improved, they’ll be much in them and you’ll pay for them.
“But there will be other platforms…You’ll be able to get the guts or the main headlines and alerts and everything on your Blackberry, your Palm or whatever, all day long. People need news. Communities live on news about their communities to be able to live and enjoy the world.”
On whether newspapers will receive a bailout from the government: “We would never take money from the government. We’d give up our freedoms and everything else to criticize or to play our full role in the community. Nothing that News owns will ever take money from the government and I don’t believe even the New York Times would. I don’t think the government would even do it. They’d realize this would be the end of it.”
On whether there is private financing available to media companies: “There is private money. The people who have left, who put in the private money into these highly leverage situations have probably lost them and the banks that allowed them to leverage up, may have lost half their money. That’s life. That’s capitalism.” On mistakes made by print media companies: “There is a case of newspapers rushing on the Web to try and get a bigger audience, more attention for themselves, have damaged themselves. And now they’re going to have to pull back from that and say, hey, we are going to charge for this.” On the Tribune company: “I bet you they’re still making money individually but they can’t pay their interest bills. Bankruptcy doesn’t mean the end of a newspaper. It just means someone is going to buy them from a bank. … [In Chicago] one newspaper will go away. It’s very hard to see how the Sun-Times can keep going. I thought it was hard when I owned it ten years ago.”
The Wall Street Journal and the death of print
Now you know that the uncertain future about the survival of newspapers is news: The Wall Street Journal’s op-ed page features an editorial castigating Massachusetts Democratic Sen. John Kerry and others for supporting the notion of federal government aid or bailouts for the struggling business.
The Journal gives us a recap of some ideas that have been seeping their way into the public consciousness in recent months, including:
- Maryland Democratic Sen. Benjamin Cardin’s bill to allow newspapers to exist as non-profits.
- Sen. Kerry’s endorsement of a proposal by Montana Democratic Sen. Max Baucus’s and Maine Republican Sen. Olympia Snowe’s to let newspapers offset their net operating losses over five years instead of two.
- Sen. Kerry’s endorsement of some flexibility under the anti-trust laws, presumably in a way that would allow U.S. newspaper publishers to dream up some ways to force people to pay for the news they read online in a model similar to how the cable TV providers work with the people who provide the shows.
- We note that the editorial didn’t even cover Washington State’s tax break for newspapers, not to mention Connecticut legislators’ recent willingness to help rustle up buyers for some former Journal Register papers. But you might as well add them to the list of ideas.
The Journal’s answer? No! No! No! On what grounds?
The “creative destruction” theory, spurred by people getting their news online, something that governments should let happen as a natural outcome of the free market. Here’s what the WSJ says:
The larger story here is that newspapers are enduring the familiar process of economic “creative destruction,” in this case brought on by the Internet. Advertisers are fleeing to search engines, while barriers to entry in publishing have crashed. Despite the pain this causes to certain companies, this is not much different than any other industry buffeted by new technology or business strategies. The shipping industry changed radically with the advent of containerization. Wal-Mart’s state-of-the-art inventory management transformed retailing. Apple’s iTunes has revolutionized the music industry.
Some new business model will emerge for journalism, if not for all newspapers, and in the meantime the business of reporting the news isn’t vanishing. It is taking new forms and adapting, with newspapers growing their audiences online even as the sources of their revenue shift. The industry is currently debating how to charge customers for content, and no doubt many experiments will be tried. No matter who emerges victorious, the journalism business will be stronger and more credible if it avoids the government’s embrace.
This blog post sounds like sour grapes to me.
The WSJ is one of few newspapers that has been making the transition to newer, online media successfully. A growing number of people, including myself, are signing up to pay for premium content where news articles are unskewed and provided as news–and opinion articles appear in the Opinion section. I think Reuters does an excellent job in providing solid, factual content–unfortunately, many newspapers add a left or right slant around this content. This is very unpalatable to many readers who are moving away from these slanted news sources and venturing out to the WSJ and the Reuters websites for their news content.
all this is a smoke screen,there is no way the democratic party are going to let their best support become none existent.the obama government will give the same amount consideration it is giving to their union supporters,to the new york times etc.