The advertising-based business model of newspapers has collapsed, and that means news consumers will have to pay for the news they read, says News Corp. owner Rupert Murdoch.
The owner of Fox News and the Wall Street Journal told a Federal Trade Commission workshop Monday that news aggregators are practicing "plagiarism" when they link to other news sites' articles, and they will have to be compelled to pay for the content they link to.
"Producing journalism is expensive," the Guardian quoted Murdoch as saying. "We invest tremendous resources in our project from technology to our salaries. To aggregate stories is not fair use. To be impolite, it is theft. ... Without us, the aggregators would have blank slides. Right now content producers have all the costs, and the aggregators enjoy [the benefits]. But the principle is clear. To paraphrase a great economist, [there is] no such thing as a free news story."
Last month Murdoch stirred controversy when news reports emerged that he planned to have his news organizations de-listed from Google News, the world's largest news aggregator.
Murdoch is also reportedly entertaining the idea of signing a contract with Microsoft, so that its MSN site would exclusively aggregate News Corp. content. That raised concerns that Murdoch may be launching a corporate war to destroy Google.
Murdoch told the FTC workshop that subscription-based news services are the future.
"We need to do a better job of persuading consumers that high-quality, reliable news and information does not come free," Murdoch said. "Good journalism is an expensive commodity."
“The old business model based on advertising only is dead … that’s not going to change even in a boom,” Bloomberg news service quoted Murdoch. “Critics say people won’t pay, but I say they will. But only if you give them something good.”
And the Australian-born 78-year-old rejected the idea, supported by some in Washington, that the newspaper industry could be rescued from its financial problems with government subsidies, describing government involvement in the news as "chilling."
Murdoch said subsidies "would only prop up those who produce what customers don't want, subsidizing failure and penalizing success. He said that government inserting itself into commercial journalism should be 'chilling' to anyone concerned about the First Amendment," reports the Broadcasting & Cable news site.
Earlier this year, Murdoch's son, News Corp. executive James Murdoch, used the same word -- "chilling" -- to describe the BBC, Britain's long-running state-run TV network.
"In this all-media marketplace, the expansion of state-sponsored journalism is a threat to the plurality and independence of news provision, which are so important for our democracy," Murdoch said.
Critics dismissed the younger Murdoch's complaint as an attack against a corporate competitor. As government-run agencies mandated with providing information to the public, organizations like Britain's BBC, Australia's ABC and Canada's CBC would likely not join other news organizations' efforts to put news behind subscriber walls, potentially scuttling Murdoch's efforts to convince consumers to pay for online news.
The following video was posted to the Web by MediaMatters, December 1, 2009.