Rupert Murdoch Blocks Google, Stalls Paywalls, Dodges Hacking Charges, Beefs Rudd

There’s been a flurry of activity across the Rupert Murdoch media empire recently as the Digger hatches his plans to get people to pay for the content that he’s churning out. After all, it’s emerged today that his company News Corp, who own MySpace, are paying £600,000 a month to rent an empty office complex in Beverly Hills. Considering they’ve signed up for 12 years there, they’re going to need to find either a whole lot of sub-letters, or a fresh source of income, fast!

Murdoch began earlier this year by saying that the Sunday Times would start to have its own site, and have it hidden behind a paywall. Then he announced that all his newspaper sites would have to be paid for, and that the change would come next June. But now he’s admitted that it’s going to take longer than that, and that he’s currently consulting other newspaper owners about how to charge online. That’s pricked the ears of lawyers, who say that discussions over pricing could be illegal under competition law – though they could feasibly be discussing a joint venture over how to universalise charging for content. Could this be the big step forward for a Journalism Online-style venture? Might they even use Journalism Online itself?

Perhaps the most aggressive feature of all this is Murdoch now saying that the stories on his sites would be blocked from Google’s news search, once the paywalls come up. Will people shell out more to read stories at the Sun or the Times rather than other, still-free news sites? Undoubtedly fewer – but with online ad margins as they are, Murdoch can afford to lose sheer hit counts and still make more money from subscriptions. And if enough newspapers all sign up for paywalls, as these anti-trust murmurings seem to suggest, then the level of impact on Murdoch’s papers would be spread more evenly across the sector. Interesting though that the Guardian, in reporting this story, have reiterated their intentions to stay free.

Murdoch needs the extra money – as well as haemorrhaging it down an office-shaped well, MySpace is losing money it had planned to get off Google as part of its $900m advertising tie-up with the company. It’s not had the level of traffic it promised to Google, and now looks set to lose around $100m of the deal. The dismantling of Fox Interactive Media lost money too, but other areas of his empire, like TV and film, are back on the up again after a terrible couple of quarters; his cable stations’ profits went up by 41%, but there’s still a long way to go before its making the $1bn+ profits it was raking pre-recession, hence the eagerness to start charging online.

Quite apart from the money issues, Murdoch’s been involved in a couple of major power struggles over the last week too. First of all, the results of the Press Complaints Commission inquiry into that rather damning Guardian story alleging phone hacking by Sun journalists have come back, and they’re predictably toothless. The PCC has said there isn’t enough evidence to prove it; the Guardian points out that the PCC hasn’t been able to do any of its own original investigations and hasn’t spoken to the police or anyone at the heart of the scandal, and described it as “complacent”. So Murdoch is off the hook, but perhaps not for long – MPs are already promising that a Commons enquiry would be much more vigorous.

Murdoch has also been playing power games with Aussie PM Kevin Rudd. Murdoch, who owns two-thirds of Australia’s newspapers, slagged him as “delusional” and said he couldn’t take criticism; he then not very subtly pointed out that he just dropped his support of Gordon Brown, and that while he didn’t tell editors what to print/believe, he was responsible for hiring them. In other words: “You’re mine, Rudd!”

Posted by Ben Beaumont-Thomas in Creative Economy | November 9, 2009 12:23PM |