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article imageMurdoch Announces Plans to Charge for Access to Online News

By Chris Dade     Aug 6, 2009 in Business
News Corporation founder Rupert Murdoch, speaking after his company reported a net loss for the year to June of $3.4bn (£2bn), announced plans to start charging readers for accessing the news via his websites.
At present the only paper within Mr Murdoch's media empire to charge for online access is The Wall Street Journal, the U.S. based publication serving primarily the business and financial communities. But that looks set to change very soon with all other papers within the said empire due to introduce a fee of some kind whenever readers visit their websites.
The charges should be fully implemented by the end of the next financial year in June 2010. A project team is currently putting together a proposal for a charging structure. That team includes Mr Murdoch's son James, Chairman & Chief Executive Officer of News Corporation in Europe & Asia, and Rebekah Wade, editor of the British paper The Sun but soon to be head of News International which is the parent company of the aforementioned title as well as the News of the World, The Times and The Sunday Times.
Whilst most other operations within the News Corporation stable, such as the TV networks it owns, have seen advertising revenue increase the opposite has been true of advertising revenue from its newspapers. Indeed the Guardian reports that such revenue from the Corporation's British newspapers had fallen by 14% by the year end. According to the Independent in the three months to June the fall was even greater, that period showing an 18% reduction in ad revenue.
Yet it was not solely the loss of advertising revenue which contributed to the poor results posted by News Corporation. Reorganization costs also took their toll, as did write-downs at the interactive media division, of which MySpace is a key part.
Nor would online charging be confined to just the British newspapers. The New York Post is likely to follow suit and so too are the Sky News channel and the Fox News cable channel.
Mr Murdoch is not concerned that being the first to introduce charging could be detrimental to his interests and beneficial to his rivals' as he anticipates that those rivals would soon introduce their own form of charging once they see how successful his policy had been. He also acknowledged that he may be forced to involve his organization in much more litigation to ensure that stories and photographs are not copied and made available elsewhere. As he succinctly put it:We'll be asserting our copyright at every point
The interest the public shows in stories about celebrities is one area in which Mr Murdoch expects to profit, as he described how his red-top British tabloids The Sun and News of the World saw an "astronomical number of hits" whenever they had "a celebrity scoop".
Commenting further on the disappointing performance of his corporation Mr Murdoch spoke of how the last year had been the most difficult in recent times, largely due to the weakness of the global economy. Still he was confident that his empire would survive and thrive, possibly as it saw some of its rivals cease to exist.
But the plan to charge the public for online news content seemed to dominate the day as Mr Murdoch told his investors:Quality journalism is not cheap, and an industry that gives away its content is simply cannibalising its ability to produce good journalism. The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news websites
78-year-old Mr Murdoch was born in Australia but became a naturalized citizen of the U.S. in 1985. His new citizenship enabled him to acquire television stations in the U.S. , something the law would have prevented him from doing had he remained an Australian citizen.
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