NZ online media reject Murdoch’s plans to charge for news

Media insiders say NewsCorp’s plan to charge for online news will be unprofitable, and unlikely to ever work in New Zealand.

Rupert Murdoch, chairman of News Corp, announced last week that it would start charging for the online content of some newspaper titles over the next year.

Scoop’s managing director and co-editor, Alastair Thompson, says Scoop has looked into charging for online news, but that it is just not viable for the independent New Zealand site.

“We have thought about it, but it would undermine what Scoop is about. It’s not viable because we would lose huge amounts of advertising,” he says.

Fairfax Digital and Stuff.co.nz editor Stephen Smith says Fairfax has also looked into it, but “won’t ever do it”.

“The content would have to be so exclusive that no one else could get it, and that doesn’t last long. People read a headline and then wait for someone else to report it for free.”

Thompson says he doesn’t believe mainstream news can be profitable, especially in a place like New Zealand.

“I don’t think you can charge for commercial news. People have tried it and it hasn’t worked.”

Smith agrees saying News Corp will make money off contributors rather than the actual news.

“If Murdoch charges for The Wall Street Journal people won’t be paying for the news about interest rates or oil prices. They will be paying for the commentators and experts’ opinions. They are the ones with the credibility and observations people will pay to know.”

Douglas Van Belle, editor-in-chief of Foreign Policy Analysis and media studies lecturer at Victoria University, disagrees. He believes the hassle of newspapers will see all commercial online news take over.

“The new generations of e-readers, which are as portable as a paper and large enough to give you the layout of a newspaper should eliminate these barriers, and print papers should quickly become a rarity.”

He adds that commercial news is considered more trustworthy than news that is free, which means people are likely to pay for particular news they care about.

“There is a psychological value added by paying for something. The current print papers that people get stuffed in their mailboxes for free are all but ignored as sources of news. People put far more trust and have far more interest in the information they choose to purchase.”

Although, a recent survey by PricewaterhouseCoopers found “readers are unlikely to pay for general news they can get elsewhere for free”.

Smith argues that major media organisations are credible and are all over the internet.

“I can go online and read The Guardian, The New York Times, I can watch CNN, BBC online. This is credible news. I trust these organisations as news sources.”

However, all three sources believe there is a viable demand for niche news and this is where the money can be made.

Thompson says: “I think you can charge in the niche segments, but it hugely limits the audience. You will need to charge a lot for it to be profitable.”

The survey revealed the best types of niche markets to tap into are business and sport.

“These readers expressed a relatively high willingness to pay for this content online”

“Finance readers were ready to pay up to 97 per cent of the price of a general paper,” said the survey results.

Smith says Stuff’s numbers prove the demand for these niche markets.

“Our three more popular sections are sport, business and entertainment. The sport section gets 162,000 hits, business gets 128,000 and entertainment gets 180,000 per week.”

The idea of newspapers becoming extinct has been thoroughly covered by academics and media alike.

Van Belle says: “Printing and distributing newspapers has always been a very expensive and awkward link in the chain. The only things that kept print newspapers from disappearing years ago were the awkwardness of computers and the information value inherent in the spatial layout of a print paper.”

Robert McChesney, founder of American lobby group Free Press, talked on National Radio about the increasing demand for internet news.

“Newspaper readers have been declining since the 70’s and in the 90’s it declined steadily. It wasn’t because of YouTube in 2004. I’m enthusiastic the internet will be the dominant news media.”

Whitireia journalism school lecturer, Jim Tucker, said on National Radio that at the moment New Zealand media aren’t in the online game.

New Zealand media are “going to have to embrace the online way of doing things far more vigorously than they are”.

However Smith and Van Belle disagree. Smith believes the online news media is “massive” and last week alone received 527,000 hits.

Van Belle thinks it will lead to a huge reduction in newspapers in New Zealand.

“It will happen here, whether it is good or not. The result will probably be a reduction to about six or seven papers in the country.”

The NZ Herald/APN was unavailable for comment.