I attended an interesting Conference on World Affairs panel at CU this morning called “Will Rupert Murdoch Win: Internet News with a Pricetag.”
The central question, of course, is what funding sources will news outlets rely on as paper is gradually replaced by electronic formats in the coming years? The reference to Murdoch alludes to his recent moves to begin charging for online content at his newspapers.
The panelists were seasoned media professionals: Pulitzer Prize-winning newspaper writer and journalism prof Richard Aregood, Time International Editor Michael Elliott, BBC senior broadcast journalist Brian Hollywood and Air America Founding President Jon Sinton. Fittingly, the panel was moderated by CU J School Dean Paul Voakes, who is presiding over CU’s own journalism transition at the educational level.
The panelists painted a picture of the dynamics contributing to the significant changes we’ve seen, especially in print journalism, in the past 15 years. The key is finding revenue streams that will replace traditional funding sources like classified advertising, which dried up thanks to Craigslist and others. Sinton noted that the model of printing news on costly paper (“dead trees”) and paying fuel and other transportation costs to have it driven to people’s homes, where it is delivered to doorsteps with news that is at least eight hours old, is no longer an ideal model in 2011.
They agreed that some degree of charging for content is inevitable, as advertisers are not willing to pay nearly as much for advertising online as they are for print ads. So Murdoch’s subscription-based approach is one of the revenue streams with which media outlets have been experimenting, and it’s not a new idea. It’s just a question of how many people will pay for content that they might be able to get for free elsewhere?
Elliott stressed that we are already paying for all our content, to some degree, in the form of fees tacked onto our cable bills, a portion of which ends up in Murdoch’s pocket.
Arewood took that theme a step further by pointing out that if he wants to watch his hockey games on cable TV, some of his money necessarily goes to right-wing pundits like Bill O’Reilly.
“If I want to see [Philadelphia Flyers defenseman] Chris Pronger, I have to send Sean Hannity some money,” he said.
It was striking to hear Sinton discuss the idea that content is now “platform-agnostic,” meaning that it “doesn’t care where it goes.” He compared smartphones to transistor radios, saying “we’ve cut the cable” again. Whereas broadcast outlets were strictly regulated due to the limited number of licenses doled out, and therefore could charge a lot in a world of high demand, the increasing proliferation of smartphones, not to mention websites, has broadened the field and inundated the market with supply.
As a result, a media outlet needs to demonstrate huge viewership online to make money on advertising, as the Huffington Post did for a time.
Arianna Huffington’s model, as described by Arewood, was “to pay nobody, steal all your content and then sell the website for $300 million. That’s a feat that’s not likely to be repeated. I’m putting my money on Rupert Murdoch.”