Posts about murdoch

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.

Murdoch madness

(I double-posted the Murdoch Madness post but won’t kill this entirely because there are comments now attached….)

Gained something in the translation

Tweet: A tweet paraphrased my link-economy line and showed me I’ve been saying more than I thought I have. **

In Twitter today, one @rpaskin paraphrased something I’ve been saying – and said again in my talk at Web 2.0 Expo Tuesday (generously covered in that link by Aneta Hall). My line has been that in the link economy, value comes from the creator of the content and from the creator of a public (formerly known as an audience). That is, Rupert’s wrong with he says that Google takes content; it gives attention.

Anyway, @rpaskin tweeted this: “In a link economy, there are values from creating content and linking to content. There’s no value in just reproducing content (Jeff Jarvis).”

I didn’t say that exactly but I think it better expressed what I have been trying to say. Or at least it added a perspective and raised a fundamental and important question, namely:

Is there value anymore in reproducing content? Is the six-century-long reign of Guttenberg and the industries he created really over?

Wow. Maybe so. In my discussions of the link economy, I had been concentrating on explaining and defending the side of the value equation brought by Google, aggregators, blogger, Twitter, et al rather than on the loss of value brought to those who reproduced – rather than created – content. But in looking at the entire equation, what @rpaskin says stands to reason: There is no value left over for the copiers. Indeed, online, if one copies, one is considered a thief because it’s only the thieves who copy.

The problem is, of course, that it was through the making and selling of copies that monetary value was extracted and that is why it is so upsetting to those who did so that they can’t do it anymore. It’s upsetting that they don’t see other ways to recognize value. It’s what makes folks including Murdoch say silly things that betray ignorance about the workings of our new world.

I’m sure Rupert knows exactly how the scribes Guttenberg put out of business felt.

ALSO: Speaking of speaking of Murdoch, you can hear me doing so – along with Michael Wolf and Steven Brill – on Murdoch’s tilting against Google’s energy-efficient windmills.

** Once again, I’m experimenting with using tweets about posts as subheds summarizing those posts.

Cable’s paper

If I were Rupert Murdoch, I think I might just let the Dolans of Cablevision have Newsday. For they’ll likely run it into the ground. Like Brian Tierney, who had the misfortune of winning the Philadelphia Inquirer, they’re ill-prepared to manage the rapidly declining fortunes of a newspaper (see the post about accelerating circulation declines and the post about local advertising I’ll soon write above). Unlike Murdoch and the Daily News, they have no real opportunities for synergy and savings. Oh, yes, they have cable channels News12 LI, NJ, and NY but they are bargain-basement operations that could have reinvented local TV but instead come off like parodies. (I worked with them on the New Jersey launch when I worked at the Star-Ledger’s parent company.) The opportunities for cross-media ad sales are slight. They have a terrible reputation in the market for their customer service. They haven’t been able to agree with their board on more than one offer to take their company private; it’s almost as if they hope that a newspaper would be dead weight sufficient to lower the price of the empire so they could finally buy it.

Here’s the irony: As with the Wall Street Journal, which was better off with Murdoch’s willingness to invest than the Bancroft family’s unwillingness, so would Newsday appear to be better off in his hands than in those of the alternatives. On On the Media this morning, Brooke Gladstone asked Jack Shaffer whether Murdoch is the last salvation of the American newspaper industry. Jack pshawed the thought. I’m not so sure.

: Lauren Rich Fine, former analyst, says she’d buy a newspaper if the price were low enough. I think all you may be buying are shutdown costs. Remember when Tribune unloaded its strikebound Daily News on Robert Maxwell (I was Sunday editor at the time), they paid him $60 million to take it off their hands. And newspapers have only continued to slide since then.

Rupert’s pincer movement around a trapped Times

I doubt that Rupert Murdoch is quite monomaniacal in an effort to destroy the New York Times — since he’s just too smart a businessman to get too carried away; money is his check and balance — but if you were sitting on 43rd Street Eighth Avenue, you’d be forgiven for feeling paranoid and sweaty right now. As CJR points out today, Murdoch is tightening his strategic grip on the shape of the future of the Wall Street Journal with the imminent reported departure of Managing Editor Marcus Brauchli (damn, just when I learned to pronounce his name). And there are reports that Murdoch’s about to snag Newsday for $580 million. Add the New York Post, of course, and Fox News — not to mention the Times of London — and you have the New York Times cornered. Murdoch can attack from above — national and international — and below — local — and the the right flank — ideological — and the future — TV and digital.

But I think what really has the Times cornered is its tradition, its sense of history and preservation. Is the Times willing to reinvent itself? That’s what’s really necessary. But I fear they will treat their past as sacred and put preservation over reinvention. I don’t say that dismissively; they certainly do believe they are preserving the finest tradition of journalism in America and that’s a laudable goal. But preservation is not a strategy for the future. I’ve had my suggestions for the company but let’s reexamine the Times’ options as it faces Rupert to the right of them, Rupert to the front of them.

They could finally decide to be America’s liberal voice. But they won’t. My friends (and employers) at the Guardian stand in a better position to grab that title since they are unafraid to be liberal (hell, they trumpet it: “The world’s leading liberal voice,” that’s their mission).

They could decide to become the great American marketplace of opinion, except HuffingtonPost and the Guardian each have a robust headstart on them.

I don’t think there’s a future in local for them (no, not even the blessed hyperlocal). They will be loathe to cede New York to the competitors but their audience here is tiny. I still think that metro should become a separate business.

The battlegrounds will be national and digital. There the Times is strong, thanks to the good work of NY Times Digital; they are a leader. But online, it’s easy to supersede leaders (see: AOL, Yahoo, MSN, MSNBC, MySpace, Friendster….). This is why I think the Times has to decide on radical reinvention, a new architecture. You can guess my starting points: a networked structure, a distributed strategy, a community plan. I’m not sure where I’d start but I do think they are all the more vulnerable today. I wonder how much they know that. And I wonder what you would do in their sweaty shoes.

: LATER: Nick Denton, media mogul, on why fellow mogul Murdoch is in such a hurry.

Here’s my appearance on the topic on the Brian Lehrer show:

A can-do attitude?

Right after Rupert Murdoch said he was planning to go free at the Wall Street Journal, one of its executives — a revenue officer probably quaking over his job — told Editor & Publisher:

“It is jumping the gun, people are jumping to conclusions here very quickly. We haven’t even closed the deal yet,” said Michael Rooney, senior vice president and chief revenue officer for the company’s consumer media group. “Mr. Murdoch would like to have the largest, most robust site in business. Free is a way to look at that. But there is a lot of detail behind that. You have to work that out. You don’t just flip the switch.”

Doesn’t sound like a can-do attitude to me. And when Murdoch takes over, that’s what he’ll expect, Mr. Rooney. It’s a seat-of-the-pants, quick-decision, make-it-happen company in my experience.

Let me tell you a story about my time at News Corp. When I arrived there, I brought the idea of starting a Parents’ Guide to Children’s Entertainment to my then-boss and now friend, the editor of TV Guide at the time, Anthea Disney.

The first time I mentioned it in a larger meeting, Les Hinton, now Murdoch’s head guy in London and then his head guy in American magazines, said: ‘Interesting… but no.’

The second time it came up, he paused a bit longer but said, ‘No.’

The third time it came up, he said, ‘That magazine of yours… Do it.’

I said, ‘OK, I’ll get you a business plan.’

‘No,’ Les said, ‘do it.’

‘Oh,’ I said, figuring I’d just skipped about 15 steps, 10 reports, 200 meetings, and six years in the process I had endured launching Entertainment Weekly at task-force-ruled Time Inc. ‘You want me to get a prototype done.’

‘No,’ Les said, now impatient, ‘just launch it.’

You could always count on quick decisions at News Corp. When he said ‘do it,’ he meant do it! That was the good side of Australian-rules management. The bad side was that an American executive, long since gone, also tried to make quick decisions and he insisted on a rate base (circulation) for the first issue of 1 million with no marketing whatsoever — a practical impossibility. To make up for that, they printed it TV-Guide-size and put it at checkouts in some TV Guide racks. Except after two weeks, TV Guide’s circ department feared my magazine hurting their sales — a not unreasonable idea — and they pulled my magazine. It had sold, as I recall, more than a half million copies — which for any magazine sold under such circumstances would have been a hit. They did put out a second issue of the magazine (large-size this time) but it was killed finally when the then ad director complained about her TV Guide sales force wasting their time on my $8k pages when they should be selling her $80k pages — also not unreasonable, but I couldn’t get a separate sales force and so the magazine died. (Though it is still a pretty damned good idea, I’d say).

So, Mr. Rooney, I’d be prepared for an atmosphere of decision making. If you don’t make a decision, you can bet someone else will beat you to it. Rather than saying, ‘You don’t just flip the switch, you know,’ I’d suggest offering ideas about how you could flip it. You’re not in Kansas anymore.

Content is free(er)

So Rupert Murdoch finally said it: The Wall Street Journal Online is going free. Here’s the link — and soon you won’t need to curse when you click on it and hit that brick pay wall. (Here‘s the AP version on the Times.)

On WSJ.com, Mr. Murdoch said, “We are studying it and we expect to make [the site] free and, instead of having one million [subscribers], having at least 10 million-15 million in every corner of the earth.” He said he believes that a free model, with its increased readership, will attract “large numbers” of big-spending advertisers.

I’ve argued in favor of dropping the wall. Lest I be accused (again) of wanting content to be free, I’m not saying that. I’m saying it already is. That horse has left the barn and has been running free for a decade. The reality of a networked media ecosystem is that free competition is always a click away. And as classified managers have learned trying to deal with Craigslist, free is damned hard to compete with. It just is.

But I think Murdoch’s move is about more than a business model and ad revenue. It is a shot across the bow of the New York Times. Watch out, neighbors, there’s a shootout in town. And it’s going to be damned fun to watch.

Free the Journal

Lehman Brothers analyst Douglas Anmuth doesn’t go quite so far as to recommend that Rupert Murdoch should take the Wall Street Journal free online — as Murdoch has mused — but he does say they should consider it (in this PDF, via PaidContent).

I’ll go that far — and farther. By going free and with Murdoch’s investment in the product — that is, in the reporting and services and with his promotion — WSJ.com can become the unquestioned leading financial information brand worldwide, winning over its many competitors: Yahoo, Reuters (now stronger with Thomson), AOL, FT.com, Forbes, MSN, CNBC. But that will happen only if it goes free.

The strategy of charging for access to WSJ.com was, I’ll argue, a result of the Bancrofts’ absentee ownership. It was a way to play safe, to get another revenue stream and not cannibalize the paper. And management executed it brilliantly. But that wasn’t big thinking. Free is big thinking. And Murdoch thinks big.

He has also toyed publicly with the idea of going all-online: killing the paper. The Journal could, I think, be the first newspaper that could make that a strategy of success and growth instead of a sign of failure. Oh, I wouldn’t kill it quite yet. But I’d plan for that day and, in the meantime, figure out what the next stages of the print Journal should look like: all analysis and features, perhaps, with a USA-Today-like digest of news. But that’s still looking at the question the wrong way: papercentric. The real question is what the free online service could be worldwide: content, service, audience, advertising, thinking past paper.

No surprise, I’d also argue that WSJ.com should become distributed, putting its news and, more important, its data out there as nuggets, widgets, modules that many other sites — blogs, social services, shows — can distribute for you.

Make WSJ.com into an API and see what people can build on top of it. Why shouldn’t I be able to build a site tracking news in media with a foundation from WSJ.com: news, stock charts, industry performance, analysts’ opinions? The more people build on top of you, the bigger you get.

Getting back just to the site, Lehman’s Anmuth says that WSJ.com would need to double or triple its pageviews to make up for the lost subscription revenue with advertising volume. He’s not sure they can do that quickly. Fred Wilson, on the other hand, points out that NYTimes.com has 10 times the traffic of WSJ.com. I’ll agree that they could triple traffic in no time. So what about the ad rate? Anmuth says that WSJ.com attracts four times the rate of NYTimes.com. Dorian Benkoil would argue, I think, that this indicates free traffic is worth less than paid traffic. But I say that a free WSJ.com would still maintain high CPMs because financial is one of the only categories where there is some measure of scarcity online (that and travel and health at most sites I know); the IAB says financial is the No. 2 ad category (behind retail).

And the other factor that is almost always forgotten in this discussion of free-v-paid is the cost of charging: mostly the cost of marketing to acquire and retain subscriptions. We’re rarely told what the churn is at these paid sites — WSJ, NYT, FT — and that is a huge part of the cost structure that has to be part of the discussion of the bottom-line profitability of the strategy.

I have little doubt that the free WSJ.com would overtake the paid WSJ.com in revenue and profitability in short order. But, again, that’s not the reason to do this. The reason to go free is to explode the brand and make it many times bigger — internationally — than it is today.

Going free — and widgetized — will get it not only explosive traffic and audience growth but also, thanks to the links it doesn’t get now (apart from the smattering of free articles they wisely mete out to bloggers now) much, much richer Googlejuice. Search for “stocks” today and the first listing — after GoogleNews headlines — is Yahoo. Also on the first page are MSN, Business Week, and SmartMoney. The Wall Street Journal is not there. That is costing them a fortune.

And once they get Googlejuice, they can also get many times more Google ad revenue — even locally targeted ad revenue — they’re not getting today.

Another way to look at this is the return on investment Murdoch will get improving the product. If he adds more reporters, as he has said he plans to do, will that pay off in additional subscriptions and ad inventory? It’s hard to argue that it will have an immediate impact. But every new journalist who writes a new story that can be found on the open web will yield immediate traffic and ROI.

If they’re worried about leaving expense-account money on the table, there are so many new ways that WSJ can charge for services: advanced analytic data and software, industry meetings (real and virtual), special reports.

In the end, though, the bulk of being No. 1 will yield so many new opportunities. I think there will be a war to create valuable “social” networks in business (instead of buying Facebook, maybe Murdoch should buy Linked-In and liven it up before Facebook becomes — as it rapidly is — the default business networking tool online). The larger you are, the less your marketing costs you and Murdoch is about to start marketing his financial news channel (where internet distribution becomes vital; the days of making a channel work only through cable are over). He can capture the valuable wisdom of wise crowds and individuals (note that I’m an investor in Covestor, which exposes the successful individual investors and their strategies).

Free means big and there should be no smaller ambition for the Wall Street Journal than being the best and the biggest brand about money.