Tag Archives: Rupert Murdoch

Sometimes, “think like a startup” isn’t the best option

In an interesting piece on the problems at MySpace under Murdoch, Om Malik mentions this:

Kevin also mentioned that Murdoch, and every large media company, need to think like startups.

Good advice – but only to a point. The fact is that News Corp (like all major media companies) can currently make more money online creating products which leverage other assets they own than standalone digital-only properties.

One simple example: a site tying into Avatar will have an instant audience and massive opportunity for cross-promotion and cross-sell, as long as it doesn’t suck. It won’t take years to build audience, won’t have large ongoing costs, and won’t need to have much in the way of work done on visual identity. It’s an instant money-spinner.

So if News Inc was developing digital-only properties from scratch, as I’m sure it will do in the future, “think like a startup” is good advice. But most of the time, it needs to “think like a corporate” – creating digital properties based on other media, linking them all together, and using the power of old media to create instant brand identity in the digital space.

(Picture via World Economic Forum)

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Mark Cuban sums up why Rupert Murdoch doesn’t care about Google

In the comments to his points on why ““Rupert Murdoch to Block Google = Smart = Twitter has changed it all“, Mark Cuban gives the best summary about why all the traffic that Google brings to News Corp isn’t worth diddly:

“[News Corp] have tons of unsold inventory of ads right now. They dont need new traffic. BAck in the day search engines were a great way to discover new websites as sources of information. Today, that is no longer the case. Fox wants you to come to them as your destination. Just like they do for Fox News on TV. If you cant get to them through Google, you have to make a choice. Go to them directly, which they hope will become a habit, or ignore them. While they know they might lose some people, losing some visitors wont cost them money because they have excess inventory. On the flipside, they know that viewers that go directly to foxnews.com and other newscorp sites will be visitors that are far more engaged and committed to their site. That is more attractive to advertisers.” (My emphasis)

People who haven’t worked in publishing, or who have been the kind of journalists who divorce themselves from the business of publishing, very rarely get this. More traffic does not equal more revenue. A niche where you can demonstrate you are getting a particular target market and engaging them deeply is much, much more valuable.

And he’s right about Twitter, too. The percentage of links that I click on which crop up on Twitter is very, very high. My friends are my filter, which means that when a link crops up I already know it’s likely to be interesting and relevant to me. The human “editors” in my friends list perform far better filtering than any machine algorithm does – which is why Twitter outperforms Google News easily.

(Picture of Rupert Murdoch from World Economic Forum.)

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The rise of the super-middlemen

Image representing Rupert Murdoch as depicted ...
Image via CrunchBase

Ken Doctor on Rupert’s attempt to get people to pay for news:

“When you hear Murdoch and other publishers justifiably scream about Jeff Bezos’ hard bargain — he keeps customer relationships and 70% of the revenue — you understand that they see the multi-platform future becoming real and want to be in the center of it.”

I find it incredibly ironic that the Internet, the medium which was supposed to lead to a wave of disintermediation where artists/writers/content owners would no longer need distributors to take a cut, has instead led to a massive new wave of middle men.

Apple’s iTunes Store, Amazon, eBay – all super-middlemen. And even Google, which should let you find anything you want, can’t break that up.

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Some quick thoughts about Google versus the newspapers

Image representing Rupert Murdoch as depicted ...
Image via CrunchBase

Rupert Murdoch has really put the cat amongst the pigeons with his comments about Google:

Rupert Murdoch threw down the gauntlet to Google Thursday, accusing the search giant of poaching content it doesn’t own and urging media outlets to fight back. “Should we be allowing Google to steal all our copyrights?” asked the News Corp. chief at a cable industry confab in Washington, D.C., Thursday. The answer, said Murdoch, should be, ‘Thanks, but no thanks.’ “

Some people will paint this as an old-media dinosaur not understanding new media, but I’m not so sure. If you’ve read Michael Wolff’s biography of Murdoch, you’d realise that he rarely says something like this without thinking it through, and without having an agenda.

There’s a few points of context which should be considered:

Google is a competitor to newspapers

The pool of advertising money online is finite. At the moment, Google takes a very large chunk of that money. If content isn’t paid for, then that makes Google a competitor to newspapers as well as something which delivers traffic.

Traffic is a double-edged sword

You need readers to make money from content, but even online every reader has an incremental cost. If companies aren’t making enough money from the additional readers they get from Google, then Google represents a cost to newspapers, rather than additional revenue. In other words, if the ad revenue isn’t there, every page view costs money. So why should newspapers care about the loss of page views from blocking Google?

Search feeds off content, just as content feeds off search

If a user can’t find the content that’s most relevant to them from a search engine, that search engine is useless. Relevance is everything – and that works both ways. Taking their content out of Google would hurt a newspaper (unless they’re making nothing from the page view), but it would hurt Google too.

What I think is clear is publishers are starting to think that the present position is unsustainable, as it offers the worst of all possible worlds for them. They don’t get paid by readers. A large chunk of the advertising revenue goes to Google, rather than them, in a world where ad revenue is hurting overall.

Interesting times, and lots of open questions. If someone says that the status quo can be maintained, I’d take that with a pinch of salt.

UPDATE: Just to add fuel to the fire, Alan Patrick has done some back-of-the-envelope calculations to work out how much Google makes from a typical site, in this case, TechCrunch.

“In other words, if all hits to TC are via Google, then Google is making 10x more money than TC is. Or, put it another way, if Google has only 10% of the traffic going to TC via its site, it makes the same amount of money.”

While Google obviously adds a lot of value to the customer, does it really add as much value as the content that the customer is actually interested in – let alone more value?

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