Murdoch: 'The Old Business Model Based Mainly on Advertising is Dead'

A promising young writer named Rupert Murdoch has an op-ed in today's Wall Street Journal headlined Journalism and Freedom. While it's unclear how this relatively unknown writer managed to land such a prime piece of real estate in the News Corp.-owned newspaper, he has some interesting points.

For example, Murdoch writes, "The old business model based mainly on advertising is dead. Let's face it: A business model that relies primarily on online advertising cannot sustain newspapers over the long term."

That's some tough "real talk": One wonders what the Journal's owner thinks of one his paper's freelance opinion writers saying that within its pages. Of course, last week the Journal let Google CEO Eric Schmidt hold forth on its opinion page, too, so maybe no one's manning the ship.

Murdoch also reveals some interesting inner-workings of News Corp.: "At News Corp., we have been working for two years on a project that would use a portion of our broadcast spectrum to bring our TV offerings—and maybe even our newspaper content—to mobile devices. Today's news consumers do not want to be chained to a box in their homes or offices to get their favorite news and entertainment—and our plan includes the needs of the next wave of TV viewing by going mobile."

How this feeds into the soon-to-be announced consortium of News Corp., Time, Inc., Hearst, Condé Nast, and Meredith is anyone's guess, but it seems that News Corp. is trying a little bit of everything since, in Murdoch's words, "The future of journalism belongs to the bold."

One sign of that bold thinking: charging for content. Murdoch says, "In the new business model, we will be charging consumers for the news we provide on our Internet sites. The critics say people won't pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don't get something for nothing."

He goes on to attack news aggregators yet again, saying, "To be impolite, it's theft." That might displease the Huffington Post's Arianna Huffington, who complained last week that criticizing aggregators was "the news industry equivalent of 'your mama wears army boots!' Although, not quite as persuasive" in a speech at a Washington, D.C. journalism conference sponsored by the FTC. (Expect a response from Huffington if she gets a break from her screen test for the new Wachowski sibling movie about Iraq.)

Murdoch spends the last section of his essay attacking those in journalism who are looking to the government for help: "The prospect of the U.S. government becoming directly involved in commercial journalism ought to be chilling for anyone who cares about freedom of speech…. When the representatives of 13 former British colonies established a new order for the ages, they built it on a sturdy foundation: a free and informed citizenry. They understood that an informed citizenry requires news that is independent from government. That is one reason they put the First Amendment first."

That last bit must be particularly galling to the chairman of News Corp. who—what an coincidence!—is also named Rupert Murdoch, and has vast holdings in China (among them partnerships with state-run telecom operator China Mobile), where there are no such protections for free speech.

In 2007 the New York Times Joseph Kahn, wrote "Mr. Murdoch cooperates closely with China’s censors and state broadcasters, several people who worked for him in China say. He cultivates political ties that he hopes will insulate his business ventures from regulatory interference, these people say… In speeches and interviews, Mr. Murdoch often supports the policies of Chinese leaders and attacks their critics. A group of China-based reporters for The Journal accused him in a letter to Dow Jones shareholders of 'sacrificing journalistic integrity to satisfy personal and political aims,' a charge the News Corporation denies."

Then again, that Murdoch, the C.E.O. of News Corp., recently said at an appearance in the Great Hall of the People in Beijing, "China will ultimately decide its own fate, but unless the digital door is opened opportunities will be lost and potential will not be realized," according to Reuters' Emma Graham-Harrison.

There was no mention of the First Amendment or any other high-minded ideals put forth by the other Murdoch (the one who writes opinion pieces), but the two men with the same name do appear to agree on some things, as this other quote from C.E.O. Murdoch in China attests: "A medium once thought too powerful has often seemed impotent in the past few years… Of course there should be a price paid for quality content and yet large media organizations have been submissive in the face of the flat-earthers who insisted that all content should be free all the time."

No more free press—especially in China!

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Matt Haber is the media blogger for Portfolio.com.