Newspaper publishers told "free is too expensive"

LONDON - Newspaper publishers struggling to meet the financial challenges in the digital age only have themselves to blame, according to Les Hinton, chief executive of News Corporation's Dow Jones today.

Les Hinton
Les Hinton

Speaking on the first day of the World Newspaper Congress in Hyderabad, India, Rupert Murdoch’s US leader accused the press of being the "principal architect of its greatest difficulty today".

He told the conference of more than 800 media delegates from 87 countries that those involved in the newspaper business had been "taken-in by the game-changing gospel" of digital evangelists, and asked "how can it be that the internet offered so much promise and so little profit?"

He added: "We are allowing our journalism – billions of dollars worth of it every year – to leak onto the internet. We are surrendering our hard-earned rights to the search engines and aggregators, and the out and out thieves of the digital age.

"It is time to pause and recognise this – free costs too much."

Hinton, who used to oversee News International’s British newspaper operation, including The Times and The Sun, urged the world’s press to "beware of geeks bearing gifts" and said it was time to place a premium back on content.

"Because news costs,"he said. "Because quality costs. Because free sets the price too low. Because free isn’t sustainable. Because free is too expensive."

The chief who has worked for Murdoch both in Australia and the United States and is widely regarded as one of the mogul’s closest allies, questioned the "build it and they will come" philosophy regarding "eyeballs and advertisers".

Using Google’s video site YouTube by way of example, the chief executive said the company that defined viral on the web has had to start paying for quality, professional content [like Channel 4], after discovering not enough advertisers were willing to feature alongside "home videos of pet dogs having baths, or kids doing karaoke in their bedrooms".

"Today, there is one thing we must agree about the content economy – the content economy that they tell us is over," he said.

"That is, the one thing free news sites have in common with online newspapers… the one thing free news sites have in common with online newspapers… virtually none is making money."

Hinton warned that even the advertisers which were initially lured by impressive clicks and page impressions, are now becoming more discriminating.

Drawing on a report called The Silent Click, by Comscore and the Online Publishers Association, Hinton said there was a disconnect between what brand marketers are now asking for in terms of quality measurement online – brand awareness, purchase intent, favourability – versus what publishers have been providing them with – click thrus, unique users and ad impressions.

"Ironically, what they now want is more ‘old media’ metrics they are used to getting from print and television," he said. "It supports what we have been saying all along: that audiences exposed to display advertising on high-quality content sites are more engaged, more favourable towards a brand, and are more likely to spend."

In a call to arms the chief executive of Dow Jones, which owns Wall Street Journal, America’s only major newspaper currently making a profit from charging for content online, called for publishers to find "new and better ways to meet the needs of their viewers, listeners, and readers".

He added: "Let’s face facts. A business model that assumes we can’t charge for the content we produce assumes that our content has no value in the online market.

"In pure economic terms, such a business model has to mean one of two things: Either there is no demand for the content or there are substitute suppliers of that content sufficient to drive the price almost to zero."

Pointing to WSJ’s more than two million paying subscribers, Hinton stated: "I don’t believe it."

Instead, he told publishers to "rationalise the lingering inefficiencies" and to "re-conceive our business in a less costly context".

He concluded: "In the future, good journalism will depend on the ability of a news organisation to attract customers by providing news and information they are willing to pay for.

"Free costs too much. Good content is valuable. That hasn’t changed. It never will. The question is who will provide the content and who will be compensated fairly for the value delivered."

Have your say...

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Media Week Jobs
Search for more media jobs


PHD co-founder Jonathan Durden reflects 25 years on

PHD co-founder Jonathan Durden reflects 25 years on

Who knew that a global phenomenon could be spawned from such humble beginnings? PHD co-founder Jonathan Durden takes a trip down memory lane.

Friday's lesson? We should all be more unprofessional

Friday's lesson? We should all be more unprofessional

What kind of time is 18:05 to you? Home time? Carry on working time? Bloody big glass of wine time? At Brand Republic we know it's often time to recoup, when the day's meetings are over and you can catch up on the most important developments of the day. Our 18:05 digest brings you the five things you need to know at the end of every day. Whether it's the top news stories, what's trending on social, what the wider media is saying or irreverent inspiration for your journey home - we've got it covered. And don't worry, we'll keep it short.

#MediaWeek30 set for bumper issue and party on 29 April

#MediaWeek30 set for bumper issue and party on 29 April

Media Week's 30th celebrations are taking shape, offering the chance for the UK's vibrant commercial media businesses to get involved.


Get news by email