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News Corporation chairman Rupert Murdoch has made news with several talks this week.
Yesterday he declared that "the sky's-the-limit profits from traditional broadcast TV are over….Free-to-air television faces a lot of challenges, just from the sheer fragmentation of the audience.” Overall he characterized broadcast television as a "highly challenged industry in America."
This may actually be on the minds of some of the striking Writers Guild of America members. The Wall Street Journal reported than some of the writers who work for the soap operas are resigning from the union and going back to work. The audiences for the soaps have been sinking for years. “Writers and producers in the genre fear that by the time the strike finishes, their audiences won't return.”
On Monday Murdoch publicly admitted that he expected the online version of The Wall Street Journal will soon be free. News Corp. will likely close the deal to acquire Dow Jones next month. "We are studying it and we expect to make that free, and instead of having one million [subscribers], having at least 10 million to 15 million in every corner of the earth, keeping up-to-date minute by minute with all business and economic news from around the world," he told an audience in Australia.
Such comments give some insights in News Corporation's strategy and business model. Clearly, advertising will play a larger role in the business model for online content. On the other hand, he is hedging his bets on advertising from broadcasting. First, he advocates making television productions very high quality, so they can be sold to the global market “and then be brought back to America--or to anywhere in the world, for that matter --and be sold as DVDs.”
So, television becomes more consumer financed, while online becomes the prime advertiser-supported medium. At least in Murdoch’s view. How will this be affected, if at all, should DVD’s be supplanted by online delivery, such as by Netflix or Amazon’s Unbox or iTunes video service? Actually, News Corp has a bet there, with Hulu.com, its ad-supported online video venture with NBC Universal.
News Corp. has developed a “portfolio strategy”: When the crystal ball is cloudy, invest in a range of possibilities. Not all need to be a success. Two or three big ones will do.
Comments (0) + TrackBacks (0) | Category: Advertising | Internet | Online | Revenue models | Television | media industry
November 13, 2007
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Murdoch confirms WSJ Online wants to be free
Reuters reported that News Corp Chairman Rupert Murdoch said on Tuesday he was planning to boost the numbers of subscribers to the Wall Street Journal's Web site more than tenfold by making access free.
"We are studying it and we expect to make that free, and instead of having 1 million (subscribers) having at least 10-15 million in every corner of the earth."
No ambiguity there.
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