The newspaper’s last gamble

By James Coghill

“Rupert Murdoch has declared surrender. The future defeated him,” and so began the barrage of criticism. Journalists across the world saw 2 July as a turning point, not only for the survival of their industry, but also for the way in which consumers will access their news for decades to come.

As the world followed the fate of the 33 Chilean miners trapped underground last month, The London Times, in typical fashion, was reporting on scene within hours. Yet those searching Google for the latest on the breaking story that morning would have found no sign of The Times coverage – only stories by rival news organizations such as the CNN or The Guardian. It has been two months since News International, Murdoch’s mammoth media empire, took the decision to charge readers of The Times and The Sunday Times for access to their websites, erecting a “paywall” and thus removing their content from search engines.

In so doing, Murdoch undertook a bold experiment that is having a marked effect on the rest of the world’s media. Many applaud Murdoch’s decision, hopeful that he is the vanguard of a cultural shift; a type of media messiah to lead newspapers out of the bottomless pit of dwindling sales and plummeting advertising revenue. But elsewhere there is dismay. Analysts, advertisers and publicists, not to mention readers, have balked at Murdoch’s announcement.

Despite the relatively modest introductory cost of £1 a day and £2 a week to view both the websites, many have had their own marked reservations. The strongest of these have come from the rival Guardian newspaper, which for months has been printing scathing attacks on Murdoch’s plans.

Jeff Jarvis, one of America’s most respected journalists and Media Editor for The Guardian writes of Murdoch: “By building his paywall, he has said that he has no new ideas to build advertising. He has no new ideas to build deeper and more valuable relationships with readers and will send them away if they do not pay. Murdoch will milk his cash cow a pound at a time, leaving his children with a dry, dead beast, the remains of his once proud if not great newspaper empire”.

Harsh words indeed, but perhaps not entirely unjustified. Critics, including Murdoch’s own biographer Michael Wolff, have always commented on the tycoon’s ineptitude at using anything digital. Apparently he doesn’t even use the internet, let alone Google and only recently discovered email.

How then, they ask, can he possibly understand the dynamics, demands and opportunities for media in the iPad generation? Naturally, Murdoch himself is bullish in rebuke; he has, after all, rolled the gambler’s dice many a time before. Chairman of the world’s largest media empire which turns over a revenue of over $30 billion a year, home to publications as prolific as The Wall Street Journal, The Sun and The New York Post, not to mention its 39% stake in Sky television, he is a gambling man, and a successful one at that.

But has it been a success? Readers will remember that The Irish Times introduced a similar “paywall” in 2005, only to remove it eighteen months later. Advertisers, generally regarded as the single largest income for news organisations, simply abandoned The Irish Times’s website: due to a collapse in traffic they had no choice but to leave it behind.

The Irish Times story has left a bad taste in advertiser’s mouths. Rob Lynam, head of press trading at media agency MEC says of the paywall, “We are just not advertising on it. If there’s no traffic on there, there’s no point in advertising on there”. He may be right, as recent reports suggest that the paywall has cost The Times 66% of its internet readership – but this better than many expected. Reports before 2 July had projected falls of up to 90%.

Media gurus talk of a new “ecosystem” of news, made up of “society” and “citizens’ reporting”: just think of the sportsmen and politicians that have literally written their own downfalls via Twitter this summer. “Murdoch is a stranger in a strange land,” Jarvis writes, “all he has left to do is build a wall around himself and shrink away, a vestige of his old, bold self”. In the complex, ever-changing media landscape, only time will tell whether Murdoch’s decision was the right one.