Murdoch: Web sites to charge for content

Media tycoon Rupert Murdoch expects News Corporation-owned newspaper Web sites to start charging users for access within a year in a move he says could radically shake-up the culture of freely available content.

Speaking on a conference call as News Corporation announced a 47 percent slide in quarterly profits to $755 million, Murdoch said the current free access business model favored by most content providers was flawed. “We are now in the midst of an epochal debate over the value of content and it is clear to many newspapers that the current model is malfunctioning,” the News Corp. Chairman and CEO said. “We have been at the forefront of that debate and you can confidently presume that we are leading the way in finding a model that maximises revenues in return for our shareholders… The current days of the Internet will soon be over.” Murdoch said the experience of the News Corp.-owned Wall Street Journal had proved that charging for content could be made to work. Would you pay to use news Web sites Sound Off below He said 360,000 people had downloaded an iPhone WSJ application in three weeks and said users would soon be made to pay “handsomely” for accessing WSJ content. Murdoch said he envisaged News Corporation titles introducing charges within 12 months.

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Murdoch’s international newspaper empire includes the New York Post, the News International stable of UK titles including the Sun and the Times, and a cluster of Australian papers including the Daily Telegraph and the Herald Sun. His comments come with the U.S. newspaper industry in a state of crisis amid plunging advertising revenues and falling circulations. Earlier this week, the 137-year-old Boston Globe said it would be forced to shut down unless it reached an agreement with unions over a $10 million program of cost-cutting measures. The paper’s owners, The New York Times Co., postponed plans to close the paper after reaching a deal with six of seven employees’ unions but said the Globe was expected to lose $85 million in 2009 if it did not make major cuts. The developments come amid a raft of newspaper closings and cuts that have seen the end of print editions of The Rocky Mountain News in Denver, Colorado; The Seattle Post-Intelligencer; and The Christian Science Monitor. The Rocky Mountain News shut down completely; both the Seattle paper and the Christian Science Monitor remain in online editions. At least 120 newspapers in the U.S. have shut down since January 2008, according to Paper Cuts, a Web site tracking the newspaper industry. More than 21,000 jobs at 67 newspapers have vaporized in that time, according to the site. The company that owns the Chicago Sun-Times and 58 other newspapers and online sites said in late March that it had filed for Chapter 11 bankruptcy. The Sun-Times Media Group, Inc. said it would continue to operate its newspapers and Web sites as usual while it improves its cost structure and stabilizes operations. Murdoch also called for tougher efforts to tackle copyright infringements and said media companies had been “passive in the face of obvious violations of intellectual property rights.”

Despite the general mood of gloom over the state of the economy, Murdoch said he believed the worst of the financial crisis had passed. “I’m not an economist and we all know economists were created to make weather forecasters look good,” he said. “But it is increasingly clear the worst is over.”