Content is King, but the Internet is a Republic

[John Simkin]

Interesting article about Rupert Murdoch in today's Guardian. I like the comment that content is king, but the internet is a republic.

http://www.guardian.co.uk/media/2010/jun/15/rupert-murdoch-paywalls-internet-content

Content is king, as we so often hear. The problem is, the internet is a republic; which means that the most exalted content has to muck in with everything else that's out there.

The biggest technology companies don't sully themselves with creating content: Google generates none (except Street View); nor does Microsoft, or Facebook, or Twitter. Even Yahoo, which has bought a company called Associated Content, is better known for the content on its photo sharing site Flickr. There's no room for kings among that democratic mess.

So how does Rupert Murdoch, a man who is fiercely certain of the value of content, restore it to what he sees as its rightful place as a money-earner in its own right? In effect, by making sure that it stays off the wider internet. BSkyB is a perfect example of controlling the endpoint of consumption: you need to have Sky's satellite dishes and Sky's receiver and Sky's encrypted card – tied to a subscription – to view it. Similarly, the Wall Street Journal, the newspaper that he coveted, lies behind a paywall on the web, and most recently in an iPad app (with, again, subscriptions). Fox is a cable channel, not an internet site. And it's interesting too that BSkyB and the Wall Street Journal rely on content that is fantastically time-sensitive: sports and finance. People will pay for access to those in a way they won't for the latest episode of House or a reality show.

It's instructive to compare Murdoch's success with that content with the biggest failed merger ever, of AOL and Time Warner. Those two couldn't work, because they were the internet equivalent of oil and water: one is an internet distribution company, and the other a content company. With no control of the endpoint, the losses were staggering. AOL has now been cut adrift, but not before Time Warner bled content and money all over the web.

Murdoch has experimented with the republican world of the internet, with MySpace, which News Corporation bought for $580m in 2005. Even that didn't work, because it couldn't keep people locked into the site, and when something more attractive came along, people left in droves: Facebook overtook it in 2007. When last seen, MySpace's visitor numbers were still plummeting, and nobody knows how to turn it around.

So having tried the republican model for content, and found it not to his liking, Murdoch is retreating once again to a kingdom. The paywalls being put up around the Times and Sunday Times are indicative of that thinking.

So if Murdoch has failed on the wider internet, does that mean it's impossible to make content work online? No; but you either need not to be worried about the direct cost, or confident that your strategy is definitely going to pay off in the medium and long terms. For the first example look at the BBC, where its multiple outlets – TV, radio, the web – are increasingly well-integrated: its TV and radio journalism feeds into web pages, while TV programmes are available again on the iPlayer, and radio is spread around the world over the net. The purpose there is clear – to push the BBC brand, which is an end in itself that trumps simple profit-and-loss calculations, though even there it has had to cut back recently.

Then there are the newspapers, where the Guardian and the New York Times are competing to push their content out across the web via an API – the side door to the database of stories and other content. Like the BBC's strategy, it's predicated on having no control of the endpoint, and instead having control of the feed of content, which means either charging for it or including adverts – the same model as the print newspaper, in fact.

It may be that Murdoch will be able to largely ignore the internet and keep the kingdom of content of his properties for as long as he likes, providing he can retain the two must-haves of live sports and financial information. For others, the former king may instead have to live like the Swedish royal family, cycling around with everyone else, and distinguished only in name and history.

But Rupert Murdoch never did much like bicycles.