UPDATED 14:45 EST / MAY 07 2009

As ‘Death of Newsprint Week’ Comes to a Close, Murdoch Outlines His Plan to Kill Newsprint

image This has been an odd week – very seldom have I seen the memes surrounding the death of newsprint pushed to headline status almost every single day for an entire week in the tech blogosphere, but I suppose this is the first time that Amazon has released a Kindle since it became undeniable to America’s toddlers we weren’t going to have newspapers for much longer.

Today, though, Rupert Murdoch has only added fuel to the fire in his shocking decision to charge for access to all his newspaper websites within a year:

Asked whether he envisaged fees at his British papers such as the Times, the Sunday Times, the Sun and the News of the World, he replied: "We’re absolutely looking at that." Taking questions on a conference call with reporters and analysts, he said that moves could begin "within the next 12 months‚" adding: "The current days of the Internet will soon be over."

At this point, it’s remedial social media education to go down the laundry list of reasons why this won’t work – and I’ll leave that for the inevitable post from Techdirt and Slashdot (update: Slashdot’s is already up).

In the same set of statements, Murdoch said that having “free newspaper websites is a ‘flawed’ business model.”

image As an employee of an almost profitable free online publication and former editor of another one that was most certainly in the black (not to mention that almost all our competitors were similarly in the black), it throws up warning flags when I hear someone say that a business model that clearly works in practice (and has been evolving for almost twenty years) is fundamentally flawed.

The more accurate assessment is that it isn’t working in exactly the way that Rupert wants it to work, and through sheer force of will and capitalistic endeavor, he intends to make it work.

This attitude will only hasten the end for Rupert’s media empire.  The Internet wasn’t the fundamental force that is destroying newspapers – it’s far more fundamental than that.  What is destroying newspapers? In a word: competition.

Before the Internet, if I wanted to read newspapers aside from the Tyler Morning Telegraph and the Dallas Morning News (my local newspapers in the caveman days), I had to reserve time on the dumb news terminal at the local library – not exactly as easy as picking up the newspaper from the driveway.

image In essence, most markets were at best a duopoly, and over the course of the ‘80s and ‘90s, most became monopolies.

And then the Internet happened, and every newspaper had to compete on a global scale with not just other newspapers, but every other media outlet.  They were all sources for local and international information alike.

Most TV and radio organizations chose to compete in this brave new world (to varying degrees of success), but newsprint chose to pretend like it wasn’t happening and stay the course.

But as you’ll find in any economics 101 text, when you destroy the monopoly by through the introduction of competition, monopoly profits also disappear.

And except for a few rare cases in Rupert Murdoch’s media portfolio where the publications he own have absolutely no peer anywhere in the world (like the Wall Street Journal), the portfolio will be providing content for fee to compete against comparable content for free.

In short, Murdoch will lose.


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