Rupert Murdoch revealed better-than-expected profits for News Corp.’s third quarter of 2009 on Wednesday, but most interesting was a little aside about the forthcoming paywall. I quote. “We’re in final discussions with a number of publishers, device makers, and technology companies. We will soon develop an innovative subscription model to deliver digital content to consumers wherever and whenever they want it.” Was it, a reporter asked, going to compete with iTunes? Apparently so.
With over half a billion bucks of profit, (although net profit was down by 69%) helped by Avatar and ad revenue on his U.K. newspapers, Murdoch is feeling bullish–well, when isn’t he? It ain’t enough, though. Through News Corp., the mogul has his fingers in the book publishing world, newspapers, TV, movies, and the Internet (*cough* MySpace *cough*) and, as well as an ongoing fight with Google, he’s obviously up for a ruck with Apple.
All of this, however, is dependent on the payment model. iTunes has 1-Click, the online payment method patented by Amazon and licensed to Apple. Both of these firms are clever with their ways of getting the cash out of people–as is Google, most of whose money is generated by businesses rather than consumers. In short, it’s market-led monetizing–chasing the money–rather than News Corp.’s top-down, dictatorial “you owe me” attitude.
Murdoch has clearly learned from the MySpace fiasco when, desperate to get a foot in the social media door, he dropped $580 million on a site that couldn’t compete with Facebook. However, even last year he was still dissing Zuckerberg’s social media monster, calling it nothing more than a directory, and this year, he’s still bigging up the ‘Space, calling it the “leading music site.” You get the feeling that there will be no more mammoth acquisitions of Web-related companies, instead, smaller investments, putting a punt, so to speak, on all sorts of vehicles that he thinks might squeeze every last cent out of his content.
Through BSkyB, Murdoch’s UK satellite network, he’s already dipped his feet into the music streaming/downloading business, with Sky Songs. Erk. As well as being an investor in Hulu (although one gets the feeling that he’s un peu miffed that its CEO, Jason Kilar, puts customers before profit), News Corp. owns Bitbop, a video subscription service for smartphones, through the Fox Mobile Group, but that has a fiddly little payment scheme via credit card, rather than through the cellphone network providers themselves.
Whatever form Murdoch’s “we are hoping to announce” announcement next month takes, make no doubt that it’s all about the payment method. He’s got three options open to him, two of which are sort of clevah, one of which is absolutely dumb. The smart route would be to license 1-Click from Amazon, following the Apple model. Upside: a payment system that everyone understands and is happy to use. Perhaps it’s already in place, seeing as the paywall options for his UK papers are on a daily or monthly basis. Downside: money to Amazon, admission that someone else got there first with a great idea.
Another possibility would be to involve the ISPs, cable providers, and cellphone networks. Upside: The money appears on someone else’s bill, the payment method is their problem, not his, he’s got enough chums in the TV and movie business (NBC-Universal, for example, and its forthcoming merger with Comcast could pave the way for a beautiful friendship). Downside: Although, News Corp. does do a little bit of ISP and cable providing, it’s only in certain territories–Australia and the U.K., for instance–it lacks a presence in the world of mobile network providers. Some back-room hustling will be needed for this.
The third option would be for Murdoch to announce Money-2-Me, a revolutionary, 11-step payment method via wormhole, devised by a triumvirate of News Corp.’s computer scientists, Stephen Hawking, and Iron Man in which cash from one’s wallet is sucked directly up into the baggy pockets of the media mogul.
Well, we can but dream. Smart money, however, is on a version of this last option, an in-house development peculiar to News Corp. that perhaps could be licensed to other media firms looking to make some green from their content. I just say this because Murdoch has built his business on doing things his way: Modernizing the newspaper industry in the U.K., launching satellite TV around the world, dissing the Dalai Lama–some he wins, some he loses. If this system is 0-Click, or Z(ero)-Click–at a push, 2-Click–then he could be in business. If not, then it’s back to the Monetizing My Assets drawing board.