We all know that the news industry is experiencing a great crisis since the arrival of blogs and the boom of Internet. Now information has become fast, complete and free, and hence it is difficult for newspapers company, Murdoch's core business, to explain why someone should pay for information.
Now, Murdoch explains 3 very important points:
- No one owns a profitable news business on the Internet. Some influent bloggers or websites break even, or make little money, but no one makes actually profits. Murdoch admits that in overall, his constellation of newspapers website doesn't make a profit of their activities.
- There is not enough advertisers in the world to set up a business modell that would create profits out of a news website. Advertisers are not milk cows, and a lot of web 2.O companies have forgotten that point. You might generate millions of visits, it doesn't mean you'll have advertiPublish Postsers that could pay you enough to generate a profitable activity.
- Google brings you traffic, but it is not loyal readers that use Google to land on your pages. This is interesting on a customer relationship management point of view. Because they are occasional readers, there is little to expect in term of revenue generations, and hence, it is in Murdoch's mind impossible to create a business plan out of those occasional people. Actually, the newspaper industry thrived on people getting subscriptions. This customer base was securing the breaking even point of the companies. And now with the Internet it is difficult to forecast such a thing.
Hence, according to all this idea, Murdoch might decide to take his newspapers website out of the Google search engine results.
The main question is about monetization, and business model on the Internet. At the moment, it is hard to see where the news industry is heading to.
Now Murdoch is also old school. I mean, the news industry has changed and you need to face it. Of course, google is a huge part of the change, but there is also the Instant web coming up with Twitter.
Now, I must admit that Murdoch is right at some point, it is important for people to realize the value of information, and that it costs money to bring content and editorial quality. I was at the Paris Video camp last month and monetizing content was one of the main issue. Because blogging, googling or Twitting lives out of this content that professional journalist gets.
I still believe that there is still some room for new business model for the news industry.
Here are some other interesting stats about news industry and Google: