Rupert has balls

Tweet: Rupert has balls. Well, he used to.

That’s the essence of Murdoch: balls. It’s the essence of the culture of News Corp., which I learned from working there (at TV Guide): Australian macho seat-of-the-pants instant decision making.

That is the secret to Murdoch’s success. It is also the secret to his failure: Sometimes his balls land on red, sometimes on black. Murdoch plays the odds but he does it by making big bets. He can do that because he’s a mogul; they’re his balls. Companies that are ruled by task forces don’t act like him; they overthink to convince themselves they’re making smart decisions (like merging with AOL). News Corp. underthinks.

So I don’t buy the worship of those who think that Murdoch must know something we don’t know, that he’s inscrutable and brilliant and so one mustn’t question his actions – as in the case of pay walls and Google – for fear of missing some Yoda moment. No, sometimes Murdoch wins his bets, sometimes he loses.

He almost lost the company once with bad bets with debt. He bet big on U.S. satellite (and then said, oh, nevermind). He bet huge on China but now admits it’s tough. He wasted a fortune and a decade and any hope of an internet strategy on Delphi (where I worked) and Iguide. MySpace – need I say more?

But he bet big on sports and keeps winning as a result. He started a fourth network against all odds. He launched successful satellites elsewhere in the world and won. He won and lost but so far has still won more than he lost and that’s why he’s a winner.

What’s sad about the Murdoch family’s pathetic mewling about Google as if it were a big, bad bully kicking sand in their face and their desperate, cliff-grabbing speculation about pay walls is that neither is a big bet. Neither shows any vision. Neither shows balls. That’s why I have no faith in the argument that Yoda – or Jabba the Murdoch, if you prefer – has one more up his sleeve. No, son James Murdoch just said News Corp isn’t a news corp anymore but a TV company. They’ve given up. They’re just hoping to squeeze one more pint of milk out of old Bessie before they turn her into fajitas.

You want to look to an executive who has a strategy and fearlessly executes it, look to Jobs. Bezos, too. You want big-picture vision, see the Google boys. Charisma? Obama. Experience? Well, that was Jack Welch, until the value of experience expired.

Murdoch? He has balls. Big ones.

  • http://www.agileevidence.com John Sextro

    Jeff, another excellent article on this topic. I think it is a bit below your class to resort to name calling, “Jabba the Murdoch”. Your analysis of the man goes much further without the cheap shot.

    My 2 cents (kha ching)

    • http://www.buzzmachine.com Jeff Jarvis

      Fair enough. I was trying to say that many do view him that way. View him as you want….

  • http://Www.yabil.com Andre Thomas

    Another thought-provoking article Jeff. There’s something to be said about this type of business leadership if it’s accompanied by a good mid-term strategy that can be fleshed out to long term later on and so long as you hedge your big risky bets.

    I hate to bring age into this but maybe Rupert has passed the stage where he can learn new tricks(business style) while his son has been so indoctrinated by what his dad’s beliefs of media are that he can’t see it any other way. A chip off the old block.

    My six cents!

  • Keith McGinnis

    Right on Jeff. Funny because I felt the same way when i heard this news. I’d love to see NewsCorp de-list from Google. Come on publishers…DO IT. But you might actually have to innovate to stay alive.

    Just to see pub’s fight back, and show they are still alive instead of just rolling over.

    The comments on lack of vision is so true. We’re seeing it across all old-school media. They’d rather stomp their foot, then roll up their sleeves and get to work.

    Sometimes you have to blaze the trail. Not just follow the leader.

    All this talk about not being able to monetize readers…from search or not is crap. Have you really tried. I mean REALLY TRIED? Built new products and services ON YOUR OWN? or did you just by someone. Or did you just take what the agency gave you….CPM ad networks. Great. It didn’t make much money.

    If we really want to create new customers for our advertisers, publishers are going to have to get serious about creating much more engaging digital experiences online and on mobile which “Banner” ads and “mini-sites” are NEVER GOING TO DELIVER.

    So can we get started building the next level of “advertising”?? There is lots of money to be won out there on the table.

    What kills me is in 10 years, Agencies and Content producers/media companies will be the same thing. And they will look and work like software dev companies.

    Perhaps they won’t be all….especially if they can’t innovate.

    Come on, lets go go go,

    • http://petervandijck.com Peter

      Problem is, he thinks he’s fighting Google, but he’s actually fighting *the internet*. Against Google, he might win (although unlikely). Against the internet? Not a chance.

      • AnotherVendorScrewedbyGoogle

        That’s the problem: Businesses that are DEPENDENT on Google and only Google to get their business is BAD. Being dependent on one and only one company is not the best way to run a business; it gives that particular search engine too much power. Unfortunately, for the meantime, Google is the only game in town. And Bing and yahoo don’t any significant difference. Too bad, to let ONE company be responsible for your livelihood. Uggh.

  • http://www.tristanharris.com Tristan Harris

    Hi Jeff,
    I agree that many are inclined to believe Rupert has something up his sleeve or knows something we don’t — which would cause us to believe that maybe his strategy to withdrawal content from search engines has a motivation we can’t see… but I agree with you that this is simply a bet that will not work. Good analysis.

    Best,
    Tristan

    • http://www.yabil.com Andre Thomas

      What I find hard to believe is that of the 60,000+ employees working at NewsCorp not one of them has an innovative idea of how to take news media/publishing forward and away from the old model. It just sounds statistically improbable. Maybe they do have something up their sleeve…

      • giantslor

        That’s assuming NewsCorp has a culture of innovation. It doesn’t. The other side in this dispute does.

  • http://blog.angelaconnor.com Angela Connor

    Hi Jeff: I’ve been reading your book for about a month now (sorry so long but I have to read in pieces, at night and I find myself re-reading parts before moving to the next) and reading different perspectives on what Murdoch is doing. I get what you’re saying about winning some and losing some and I completely understand your thoughts on the value that Google brings news sites. I’ve worked for traditional news orgs my entire career and my time at a newspaper in South Florida was pretty telling. I am wondering if you are 100% sure that this is one of those times his bet won’t pay off. On a real non-intellectual level, I think there are people just waiting to watch him make this move so they too can then get out there and follow suit. And peaking of blazing trails, I believe that is what he feels he’s doing. I do enjoy your posts and insight.

    Angela Connor
    @communitygirl

    • http://www.buzzmachine.com Jeff Jarvis

      As I said, his bets do pay off more than they don’t. I have no way of knowing, but don’t think even he would argue he’s blazing trails. He’s trying to protect against those who have.

  • http://www.innovationsinnewspapers.com Juan Antonio Giner

    Jeff,

    Yes,you are right.

    As he says in the Preface of our I2009 NNOVATIONS IN NEWSPAPERS Global Report:

    COMPLACENCY IS THE BIGGEST THREAT TO NEWSPAPERS.

    http://www.innovationsinnewspapers.com/index.php/page/2/?s=Murdoch

    • Dermitt

      ““No one had any answers” about making money on the Internet, said Ken Auletta, the New Yorker writer who is in the meeting.”

      The average business is going to have troubles and the internet isn’t going to solve them. Even information businesses like newspapers can’t capitalize on the damn thing. It’s just driving up costs and all the cash is going to a few operators. GM had $52.00 cash per share and was trading at $47.00. That was around 5 years ago. The internet darlings had $2.00 per share and were trading at $110.00 a share. No one has any answers about making money with an automobile factory now.

      • Tom

        It’s simple. Follow the money. The only ones making any serious money in this information marketplace are companies that sell online advertising like Google. Google is riding on the back of NewsCorp, AP, and others. If the world were suddenly to turn into a bunch of walled gardens — where you had to pay to get news — Google would have very little to index, and it wouldn’t even be interesting to use Google’s service for that purpose. The problem for these news providers, though, is that there are a lot of them, and they don’t act in unanimity. What Murdoch should really do would be to unify as many of the major players (AP, Reuters, UPI, etc) into a single licensing bloc. This would make it difficult for the Googles of the world — which priimarily just feed on content streams for their advertising revenue without giving much in return — to get away without paying their fair share; quite frankly, this would be Google’s worst nightmare, because it might lead to a situation with different content tiers on the Internet which Google has to license in order to index. Clearly, it doesn’t want that, but neither does it want to work with NewsCorp in any substantive way to improve the situation of newsgatherers.

      • Andy Freeman

        > If the world were suddenly to turn into a bunch of walled gardens — where you had to pay to get news — Google would have very little to index, and it wouldn’t even be interesting to use Google’s service for that purpose.

        You’re assuming that news is a large part of web searches. It isn’t.

        Watch http://www.google.com/trends/hottrends?sa=X

        > Murdoch should really do would be to unify as many of the major players (AP, Reuters, UPI, etc) into a single licensing bloc.

        You’re assuming that the major players have enough “share”. They don’t.

        Which reminds me – how much of “their” content comes from them and not their members? Why would their members go along with the proposed scheme? One answer is money, but what are the numbers such that being a contributing member, granting AP all redistribution control, makes more sense than just being a subscriber and owning the distribution of your own stuff? Note that the numbers have to make sense for both AP and the potential contributor?

      • Andy Freeman

        Note that the relevant question (from Google’s point of view) is the ad revenue from “news” searches.

  • http://stephenpickering.com Stephen

    I don’t understand Murdoch’s argument at all. This would be like saying that News Organizations should have to pay the participants in a story they cover, ie the New York Times should have to pay to put Gary Vee on the the Cover etc. Do you think Gary Vee expects payment from the Times for putting him on the front page?

    It’s like this is all about spite, the success of Google in just a few years when it took Rupert a lifetime to build his empire which is smaller than Google’s is.

    • Dermitt

      “Lo! thy dread empire, Chaos! is restored.” A. Pope Now what if Google goes haywire?

  • http://www.reactrix.com Robert Hoffer

    Why does everyone always forget about Larry Ellison. Balls. Focused. Makes BIG BIG bets. Never gives up. Add him to your Bezos/Jobs list and I’m all in.

    • Tom

      Larry Ellison is an asshole. A successful asshole, mind you. But a world-class asshole, nonetheless.

  • Joseph

    Rupert Murdoch didn’t get rich with his balls, he is part of a family that has been the richest and mast powerful in Australia since the the country federated a hundred years ago. He inherited his publishing business and just happened to be running it during a period of business globalization that was to a very large extent caused by the same technological evolution that now ironically destroys him. Good on him for being one of those many Aussies with global ambitions, but his time, and I think the time of the Murdochs as a clan, is passing. Can’t say I’m sorry to see them go.

    • Dermitt

      Yeah irony! Sacrifice newspapers and we all get news via dolts on myspace! All by killing search engine tech.

  • Dermitt

    Good all in reporting is expensive. Newspapers are into all sorts of odd stuff as the business suffers. Being a newspaper does not keep you busy enough? It is a 24/7 business. It is always on!

  • http://sputnik.pl/ Michal Tatarynowicz

    He should be investing in startups, because he knows nothing about the internet business, and investing in startups is the best way to learn.

  • john mitas

    You need big balls to do what he does!

    One thing that everyone fails to see is that Content has been devalued by Google. And that is what this is all about, taking control of content valuation away from google and back into the hands of content makers! The content makers are the ones that should be dictating value, and the only way Murdoch can do this is with technology backing of someone the size of google but not google aka MS.

    If Murdoch with a non-google tech giant can’t build there own value chain around there content then all hope is lost for restling content valuation from google.

    Content is king, currently google is king. That is what is at stake!

    Go Murdoch, fight this to the bitter end!!

    • Tom

      Totally agree with you, John. Google has essentially reduced the value of content to zero. Why? Because it imakes it possible to discover multiple sources of news; whereas, customers were reliant upon local or national newspapers. New, of course, some will say that that’s perfectly fair; that newspapers were too “complacent” and acted like “dinosaurs” in the face of new technology. In my opinion, Google sold them down the river. Google and other dotcoms told newspapers that they could put their content online — and it would serve as an adjunct to their paper newspaper business, drawing customers to them and help them sell more papers. Meanwhile, Google willingly iindexed their content, and watched as customers figured out that, if they were going to use a computer, they no longer had to pay for news. Only a few (eg Wall Street Journal) were successful in erecting pay portals, and that’s primarily because WSJ offers specialized financial reporting that goes far beyond the typical newspaper.

      There is inherent value in news content. Not republishing content. No, I’m talking about the ones who gather and report original content. They create the real value. What is going to happen is a massive realignment/consolidation in the news industry, and whoever originates content is going to start demanding a greater share of the revenue stream from downstream consumers like Google, Bing, etc. Either way, I predict that there will be LESS news out there, not more. Blogging isn’t newsmaking.

      I support Murdoch 100%. Somebody has to pay for premium content. People can’t expect companies like the ones that Murdoch runs to keep gathering news, writing content, and giving it away for free. If they really DO expect that, then they’re morons.

      • http://Www.yabil.com Andre Thomas

        Really good points John and Tom, from the business’ perspective. However are you telling me that content being available from multiple sources is a bad thing and I’m supposed to believe that? Innovation comes to a crawl without competition. The American cars that some drive would be entirely different without the option of a German or Japanese model to give the consumer options. The gadgets we buy would be that much more expensive without all the other competitor stores to offer competitive pricing.

        News media just like every organisation that had to face global competition has to adapt and thus innovate. The entire time they were giving away free content and gaining eyeballs they could’ve buckled down and came up with some profitable way to monetise this new means of releasing content. Why didn’t they look at craigslist and model classified ads on that? Why didn’t they form their own ad agencies instead of using other Internet ad networks? Why didn’t they innovate?

        Now that’s it’s very late in the game, they decide to try and reduce the amount of information available to the public after we’ve grown accustomed to free, widely available information. I hope if they don’t innovate, that they fail. It’s time for someone else to do News media right in this Information Age.

      • Andy Freeman

        > Somebody has to pay for premium content.

        That’s true, but has almost nothing to do with this discussion because most content isn’t “premium” – it’s commodity.

        All this ranting about Google misses the point. Craigslist showed that news was never as valuable to readers as newspapers thought.

        And no, your costs don’t determine what readers are willing to pay.

    • Andy Freeman

      > The content makers are the ones that should be dictating value, and the only way Murdoch can do this is with technology backing of someone the size of google but not google aka MS.

      That’s nonsense.

      It isn’t that hard (or expensive) to build a very good search engine. If a news search engine made economic sense, there are no technological barriers.

      The problem is that a news search engine doesn’t make economic sense. That problem has nothing to do with Google or MS.

      • john mitas

        OMG you have got to be kidding. There is so much fail in your logic!

        I’m hoping your being sarcastic, and that ive failed to see it.

        News search engine makes perfect sense to Me and, im guessing, to all the news outlets out there. For me it’s simple, if i were rupert i’d build my own search engine, remove everything from all other search engines. Make sure the relevancy of the new news search engine is good and works. Then slowly release it out for use to other search engines (like the wolfram/MS relationship)

        Of course the public consumer will have access to this news search engine, and businesses thru simple affiliation or deals will also have access to it. Also complete syndication is controlled by the news organization.

        Google is relegated to just another business doing deals for content syndication.

      • Andy Freeman

        No, I’m not being sarcastic.

        > There is so much fail in your logic!

        An actual example would have been nice.

        However, I do share your hope that Murdoch or someone else builds a news search engine and cuts off Google, etc.

        > Then slowly release it out for use to other search engines (like the wolfram/MS relationship)

        You don’t understand what Wolfram is selling. He’s not selling content, he’s selling algorithms.

        News organizations don’t know anything useful about algorithms. All they have is content.

        You might want to think about what that error implies.

      • john mitas

        example 1 : “It isn’t that hard (or expensive) to build a very good search engine”

        Please give me an example of a good search engine that is cheap and was simple to build!

      • Andy Freeman

        > example 1 : “It isn’t that hard (or expensive) to build a very good search engine”

        Lucene is open source.

        The kosmix or ask folks might welcome the biz.

        Many of the yandex folks used to work at Yahoo search – they’d love an opportunity to go after english-language search.

        And then there are all the Yahoo search folks who won’t go to Microsoft.

        Every couple of months there’s another VC funded search company.

        I used to work in search. (Plus the guy who started AltaVista was a good friend.) What’s your relevant background?

    • http://watershedchronicle.wordpress.com/ Dan Meadows

      > One thing that everyone fails to see is that Content has been devalued by Google.

      > Google has essentially reduced the value of content to zero.

      No, they haven’t. It was the publishers who devalued content, and they did it a long time ago. They haven’t been selling the content in the forms of magazines and newspapers, they’ve been selling advertising vehicles. The growth of display advertising is where the real money has been in publishing over the past half century, and the content was nothing more than a way to get eyes on the ads. The entire pricing structure is based around the costs to produce the product, with content nothing more than a small part of that. People haven’t been paying for content for a long time. What Google has done is commandeer the structure of advertising and provide a vehicle with significantly lower rates. The publishers had an opportunity to set the tone for what online advertising would become, and cost, but they abdicated that role and Google ran with it. This argument isn’t about Google stealing publishers’ content, it’s about them stealing their advertising business.

      • john mitas

        I’m sorry BUT since the early days of Google they touted that “Content is King”. And in the early days Content owners owned their content, BUT in today’s economy it’s clear that content owners have lost the control of distribution of there content, and google (and other search engines) are the cause.

        Ruper could easily put up the robot.txt file BUT that will only stop googles spidering his content. However the 3rd party sites that have links and content from rupert they’re still being indexed by googles spiders. The robot.txt file isn’t advanced enough to control this, it needs to evolve to have some type of content-distribution controls (content syndication). That is what i believe MS and Rupert are going to build, a way to wrestle back content valuation from google by evolving the spiders to understand the concept of “content syndication”.

        And yes, technically this is DRM for Spiders!

        Thats what large content owners want, DRM for music, videos, and now newspapers. And for newpapers they want to enforce this in the search spiders out there via a greatly evolved robot.txt (or something similar) industry supported standard.

        Right now im only concerned with Content ownership and not advertising because once Rupert gets back ownership of his content (all the way down to syndication) then advertising will flow back into his control.

        Expect a massive fight from google on this!

      • Andy Freeman

        > However the 3rd party sites that have links and content from rupert they’re still being indexed by googles spiders. The robot.txt file isn’t advanced enough to control this

        Actually, it is.

        You’re assuming that those third party sites have some sort of right to that material or at least to make it available to spiders. They don’t. Murdoch is free to tell them that they can’t publish his content without the appropriate robots.txt entries. (The whole point of a robots.txt file is that it allows fine-grain control over what each crawler can see on a given site.)

        However, those sites probably aren’t willing to pay much for that content if it can’t be indexed by someone that sends them traffic. Or, maybe they are. Either way, Murdoch has control.

        If you’re going to argue about technology, you should understand it.

      • john mitas

        actually it isnt! If you can’t see how it fails to address DRM like rights for content then we’ll forever agree to disagree. If you think robot.txt is perfect, which from your comments sounds like you do, then theres no use arguing with you.

        nothing more to say!

      • Andy Freeman

        I didn’t say that robots.txt was DRM or perfect. I said that robots.txt stopped crawlers from seeing content.

        Mitas disagrees. Perhaps he’ll explain how it doesn’t stop crawlers from seeing content.

        Or, does he want to argue that Murdoch can’t tell sites that show his content that they have to use the appropriate robots.txt entries?

        If robots.txt does stop crawlers and Murdoch can tell sites what they can do with his content, Mitas is wrong – robots.txt is sufficient.

      • Andy Freeman

        Speaking of ‘DRM for spiders’, the relevant proposal isn’t. See
        http://www.the-acap.org/Documents.aspx .

        The implementation guide even includes some discussion of robots.txt and the relevant meta tags (such as nofollow, noindex).

        As I said earlier, if you’re going to talk about things that depend on technology, you should know the technology.

  • http://dynamicsblogger.com Janakiram

    I completely agree with you Jeff on this. I’ve posted my views similar to this article on my blog http://dynamicsblogger.com/2009/11/content-should-be-king-not-the-search-engines/

  • http://ifihadmyway.com Doug Skoglund

    Here is my version of a solution

    http://ifihadmyway.com

    Now, how do I get it to Murdoch — anybody got an email address??

    • Jack Evanworth

      murdoch at newscorp.com

      • http://ifihadmyway.com Doug Skoglund

        Thanks – I’ll give it a try.

  • http://www.techcrunch.com michael arrington

    Jeff, I don’t disagree. But putting this aside, it’s going to be fascinating to see how this plays out.

  • http://www.techcrunch.com michael arrington

    also…re “Murdoch plays the odds but he does it by making big bets. He can do that because he’s a mogul; they’re his balls. Companies that are ruled by task forces don’t act like him; they overthink to convince themselves they’re making smart decisions (like merging with AOL). News Corp. underthinks.”

    in my opinion, he’s a mogul because he places big bets, not, he’s a mogul so he can place big bets. In other words, he got to where he is because of the way he fights.

    • http://www.buzzmachine.com Jeff Jarvis

      Michael, I agree.

  • http://www.6minutes.com.au Michael

    I never understood why newspapers and magazine gave away their product online for free. It’s expensive and labour intensive to produce, and now the advertisers have walked away. Interesting to look at scientific publishing, a sector in which a former Murdoch rival Robert Maxwell made his fortune. Medical journals never gave away their content for free. You want access, you gotta pay a lot of money.

  • Nando

    I wonder why nobody questions Microsoft’s “business model” of buying exclusive searchable content from Murdoch. What if the Internet worked on that model proposed by Bing (and since the beggining)? What would we have now?

    Other question marks: Will Google be able to “search” Bing and show the WJS results on Google pages? Or will Bing be locked/walled? Isn’t that a natural born Internet harmful model? Or at least much worse than the open, mashable, third part (read: whole Internet users, whole world) useful and expandable model from Google and Yahoo?

    • john mitas

      We are in the very early days of the internet and search. This is an interesting fight that needs to happen now whilst we’re still learning how to control and distribute content on the web.

      It may fail or it may succeed and fail for consumer may mean success for a business.

      I can’t stress enough that this fight needs to be fought and fought by people with the largest stakes to lose (rupert + others). And if they fail we’ll all have learnt from this and we’ll all move on wiser.

      Interesting times ahead!

  • Dermitt

    The random dance of Quantums means cause and effect are all gone. Chance governs all.sea

  • http://www.webpronews.com Rich Ord

    “desperate, cliff-grabbing speculation about pay walls”

    Pay walls are not inherently bad. Everything costs money including your Internet connection. I remember when those who put the first banner ads on sites got slammed for messing with the purity of the Internet. The idea of open and free content is great but obviously not sustainable. Advertising was needed and in many cases pay walls will be needed … and it’s all good.

    • http://www.buzzmachine.com Jeff Jarvis

      No, paid is not inherently bad but I think it’s going to be bad business in this case for all the obvious reasons I and others have stated so often, starting with no end of new competition.

  • Rurik Bradbury

    As someone commented, Murdoch is not fighting Google, he is fighting the Internet.

    Instead of 100 local markets across the US, there is now just one: the Internet.

    So instead of 100-200 newspapers competing in 100 markets, there is room for just a handful, competing in one market.

    The fact of this single market cannot be wished away — it is a ‘brute fact’.

    We are now on a death march as the vast majority of traditional media publications fall by the wayside and die. And there is no way Murdoch et al can fight this — any more than they can fight the tide.

    • Yes

      EXACTLY. This is the point that everyone seems to be missing.

    • http://www.buzzmachine.com Jeff Jarvis

      Well said.

  • Woody

    Nailed it!

  • John

    Great blog post, Jeff.

    I’ve heard a rumour that MS have helped put Rupert up to this notion. The level of assistance I guess may be questionable. Regardless though given the leadership personalities and respective agendas they may have make the rumour, in my humble opinion, seem plausible.

    • http://www.buzzmachine.com Jeff Jarvis

      As I say in the post that follow, I think that luring ol’ man Murdoch over this cliff is a deeply cynical act. Some might call it evil.

  • http://www.siliconvalleywatcher.com/ Tom Foremski

    Jeff, you seem rather angry, and you’ve become a huge apologist for Google. Is that a side effect of researching the book? I’d love to hear Google’s side on all of the Murdoch posturing.

    • http://www.buzzmachine.com Jeff Jarvis

      Tom,
      Spare me the psychoanalysis. It’s a blog. ;-)
      Maybe I wrote what I believe, eh?
      Here‘s an extensive interview with Josh Cohen of Google News.

  • Pingback: Stumblers.net › Rupert has balls

  • http://www.siliconvalleywatcher.com/ Tom Foremski

    The whole Google and Murdoch business is fascinating because so may people are lining up to tell Mr Murdoch how to run his business and how wrong he is about Google. Yet the effect on his business by cutting Google is small, and the effect on the world in general, will be miniscule. He’ll either succeed in raising revenues or he won’t.

    What’s more interesting is that he is willing to try out different business models, and that’s the important thing: We don’t have viable media business models except at the very low -end. If Mr Murdoch suceeds with his strategy then we all win because then we have at least one viable business model to fund professional media.

    I believe the future of the media industry will be a (holy) trinity: professional media, citizen media, and smart machine media (search, etc.). Get the right mix and it will do very well, get the mix wrong and it will fizzle (just like gunpowder: potassium nitrate, sulphur, and charcoal.)

    I’m looking forward to seeing how Mr Murdoch does, it’s good to see people trying rather than crying :)

    • http://www.comradity.com Katherine Warman Kern

      Tom, I agree.

      Jeff, if you are right, what are the implications? “What is” will continue to evolve in the same direction:

      * Content creators – small or large – work as slaves for a master controller of all information.

      * Art and literature are cut up into bits of data so an algorithm can tell an individual what they will like.

      * When individuals only consume what they like, our society, culture, and politics are more and more polarized.

      How did we get here? Because pricing and marketing “ideas” is really hard:

      * The “established” media world avoided the challenge by generating revenues from the derivative value of “ideas” – selling exposure to the eyeballs “ideas” attract and by selling “access”.

      * “New” media has continued to avoid the elephant in the room. Follow the money: investors are not putting money in original “ideas”. Investors have been betting on taking share of existing ad$ and lowering costs by making unlimited numbers of copies of archived content. As Tom says the economic impact is deflationary: http://bit.ly/8jQ2oR

      It doesn’t take “balls” to go along with other publishers or programmers (who still believe in investing serious dollars in people who produce quality content) and not enter a market where there is no way to breakeven. It is just common sense.

      It doesn’t take “balls” to threaten to walk away when you are losing in a negotiation and cut your losses. This is business 101.

      And it doesn’t take “balls” to insult people, reverse or others.

      It takes “balls” to just do it better.

      The person at Time Inc. who introduced HBO as a paid movie channel, when all the “experts” said it would fail, had the conviction to pay people to deliver a quality product that merits a premium price. The reward is being one of few media brands with increasing revenues and profits in today’s market that everyone would be proud to work for.

      Katherine Warman Kern
      @comradity

      • http://www.buzzmachine.com Jeff Jarvis

        Precisely my point: He’s not doing anything better. He’s not making a bold strategic bet, as he so often has in the past. He is hunkering down. That doesn’t take balls.

        As for the changes you note, yes, these are volcanic changes in the economics of media. Roaring against them or trying to build walls after the tide has passed will do no good.That, too, is my point. The wise will find the ways to exploit these changes. There is little choice.

        As for you insult in your post (as opposed to your insult in your tweet) regarding not putting forth economic models, that’s what I do here ALL the time. Just hit the link to previous posts. Read the tags NEWBIZNEW, NEWSPAPERS, GREATRESTRUCTURING, REBOOT. Also go to the project I run at CUNY in New Business Models for News at http://newsinnovation.com and http//newsinnovation.com/models.

      • http://www.comradity.com Katherine Warman Kern

        Jeff, I am aware of your posts from the past. Haven’t found the specific ones your recommend after following your instructions, but will continue to look for them.

        As for my post here: http://bit.ly/8q6rlQ I said that you took the Murdoch debate to a new level by implying that Murdoch’s success and failures are all about having balls not talent, smarts, etc.

        I am a lot more interested in provoking thought about what would be better . . . not marginally better . . . game-changing better. The HBO example demonstrates that there is demand for quality content and people will pay a premium for it.

        I’m glad you agree the objective is better, bold, strategic. I have looked at your business models. And they will not support it.

        They are designed to make the case that an ad model is more profitable than a subscription model or a hybrid of both. They assume a 1% conversion rate to subscription. This assumes a marketing failure. Even the CJR estimates 3-5% based on what I would consider the currrent worst case “fly-by” conditions http://bit.ly/2d8dLz

        The models do not indicate what the assumptions are behind the ad revenues. Based on ad spending trends and my familiarity with “formerly known as advertising” clients, counting on ad revenue is dicey.

        The internet should be generating a richness of original thought and a culture of possibility. There are a few folks doing this – a Polish newspaper designer: http://bit.ly/5rirVw @TomForemski http://bit.ly/7G7woX @robinsloan http://bit.ly/7RIyFg @rushkoff http://bit.ly/7ghuZK and @xarker http://bit.ly/3nFMok have recently posted some thought provoking stuff.

        Hopefully, if folks like Murdoch get serious about changing the game, the bar will be raised and there will be demand for taking these ideas to the next level.

        K–

    • http://www.buzzmachine.com Jeff Jarvis

      I don’t think he’s trying a new model at all. He’s trying to preserve an old model in new realities. I simply don’t think it will work. The tougher things to do would be to invent new products that work in this new reality and to face the tough issues of cost (can’t maintain the old monopolies in a newly hypercompetitive world).

      • Jack Evanworth

        In the late 70s HBO provided commercial-free top quality movies back to back with repeats in case you missed one. There was no agenda-driven news and no 5 minutes worth of commercials. The content really was premium. The networks have never matched them.

    • Andy Freeman

      > * Art and literature are cut up into bits of data so an algorithm can tell an individual what they will like.

      Do you folks really believe stuff like that?

      The holy grail of all of the tech people is to find algorithms that help individuals find what said individuals like.

      The only folks trying to tell people what they will like are content creators. I’d hope that they’re doing so because they’re trying to move their inventory, but I’m willing to believe that they have less benign motives.

      > * Content creators – small or large – work as slaves for a master controller of all information.

      Crap again. There’s no “master controller”. In fact, there’s far less control now than there was in the past.

      I wonder if this is related to the confusion that you folks have between gatekeepers and filters? In the modern world, there are far fewer gatekeepers and far more filters.

      > * When individuals only consume what they like, our society, culture, and politics are more and more polarized.

      Interestingly enough, the only evidence of “only consume” is among the left and elite. Case in point – Rush often cites the NYT, WashPost, etc, which drives folks to read them. The other way – almost never.

      In other words, “they” know you – you’re the ones who are in a cocoon.

      • Jack Evanworth

        Andy makes an excellent point. New media bloggers and radio personalities are constantly pointing to articles in the major left-wing and right-wing newspapers, at least to ridicule them as people will read the agenda driven stories and laugh. You will rarely see the reverse happen from the old media. So it is not as if the new media consumers aren’t still tasting the pablum that was once fed to them exclusively before they got the chance to grow up and add variety to their meals.

        I don’t like Rush because he is a populist like Palin and Beck but he deserves to be referred to as much by Katie Couric as the other way around. She isn’t smarter and doesn’t create better content so she ought to quote her fellow entertainer more even just to point out that she disagrees.

        Murdoch, Scaife and their old media pals on the left are all in the same boat in that they don’t deign to recognize the new thought competition…and, by deliberately staying out of the “conversation”, they make themselves more and more irrelevant.

        So whoever said “When individuals only consume what they like our society becomes more polarized”…is basically saying that the elites of the old media, who only consume and link to what they agree with ahead of time, are polarizing away from the rest of us who link to everything.

  • Pingback: Link-Tipps: Zeitungssterben, Schirrmacher-Kritik, Google Analytics, … | Leander Wattig

  • Pingback: The Google – Rupert Murdoch war - no1onsports

  • http://www.rentvine.com Dave Dugdale

    I was just listening to TWIG and decided to stop by your site. I enjoy the TWiG show a lot. I am a big fan of Danny Sullivan, that would be great if you can get him on more.

    About Rupert, I hope he disallows Google bot – I would love to see what happens.

    Dave

  • Pingback: Mr. Tweet: Your Personal Networking Assistant!