File Access

If you’re a newspaper executive, here’s the question that’s plagued you since the industry began hemorrhaging its advertising revenue a decade ago to free Web sites that featured your reporters’ content or at least built its articles out of that content: How do we start making money again?

 

Or, more accurately – since most newspapers are profitable but, as publicly traded entities, do not make enough money to satisfy shareholders – how do we approach the profit margins of years ago?

 

The answer, we discovered this week, is not “government bailout.”

 

Some newspapers now are publishing all of their content to the Internet to save on printing, distribution and other overhead costs. Others are shunning the Web entirely. The New York Times’ attempt a few years back to charge for online content gained little traction, and the gold-standard paper is now facing the same kinds of financial problems as the rest of the industry.

 

Now, we hear that the one person who may wield the most power in news media – News Corporation head Rupert Murdoch, whose company this week reported a 47 percent decline in quarterly profits – will start charging users for access to content.

 

Murdoch announced the change, which will happen within one year, during a conference call this week.

 

“We are now in the midst of an epochal debate over the value of content and it is clear to many newspapers that the current model is malfunctioning,” Murdoch said. “We have been at the forefront of that debate and you can confidently presume that we are leading the way in finding a model that maximizes revenues in return for our shareholders... The current days of the Internet will soon be over.”

 

Normally, that kind of talk would sound like a newspaper executive’s angry rant. But Murdoch isn’t normal. His international newspaper empire includes the Wall Street Journal, New York Post, the News International stable of British titles – including the Sun and the Times – and several Australian papers, such as the Daily Telegraph and the Herald Sun.

 

His comments come as the newspaper industry teeters – and in some cases, more than teeters – on the brink of disaster. An estimated 120-plus newspapers in the United States have closed since January 2008, and more than 21,000 jobs at 67 newspapers have been eliminated in the same span, officials say.

 

Long-established stalwarts such as The Rocky Mountain News in Denver shut down completely, while The Seattle Post-Intelligencer and The Christian Science Monitor now publish only to the Web.

 

That may not be a bad strategy, and one announcement this week – the launch by Amazon of a larger version of its popular Kindle-brand e-book tablet – may signal the start of a technology-fueled turnaround for the business.

 

Certainly, Murdoch is not unaware of the Internet’s capabilities. As chairman and chief executive officer of News Corp., he oversees the popular social networking site MySpace (News - Alert) – a property that IT insiders say is poised to see more and more influence from its parent company.

 

As CNN reports, though many are gloomy about this slow economy, Murdoch said he believed the worst of the financial crisis had passed.

 

“I’m not an economist and we all know economists were created to make weather forecasters look good,” he reportedly said. “But it is increasingly clear the worst is over.”