Rupert Murdoch

Every year we hear about fights going on between the cable television companies and the actual networks, and every year we hear threats that “you won’t be able to see these channels after midnight on New Years Eve”. This year it is FOX and Time Warner:

Time Warner Cable Inc. and News Corp. traded barbs on Wednesday as they face a New Year's deadline in their landmark fight over TV-programming fees. If the fight remains unresolved it will threaten millions of cable-TV subscribers with the loss of Fox broadcast programs, including big football games, in coming days.

The two sides remain at odds as they try to conclude months of talks over a new contract for Time Warner Cable to pipe News Corp. programming to viewers. Chase Carey, News Corp.'s president and chief operating officer, said in a memo to employees Wednesday, "it looks like we will not reach an agreement and our channels may very well go off the air in Time Warner Cable systems at midnight [Dec. 31]."

I’m not a fan of Time Warner, but I got to side with them on this one. A fear is that if they have to pay too much more for FOX programming then those costs will be passed on to the consumer, and given our bad economic times that might result in people dropping cable. The greed of Murdoch doesn’t view it like that though.

But here’s a thought – Time Warner should tell FOX to go Cheney themselves. Time Warner is one of the biggest providers in the country and if FOX doesn’t have them, then FOX’s ratings will drop big time. That means they will not only see a loss in the revenue from Time Warner, but a loss in advertising revenue.

Then there is another benefit to this plan. The Murdoch empire, including FOX News, loves monopolies. Cable companies pretty much hold monopolies on their service areas, so if Time Warner dropped FOX chances are they won’t loose to many customers. Sure some might say “screw it, I’m getting satellite,” but not everyone can do that. You do need line of site and to live in a place that allows them.

To me Time Warner holds the upper hand here. FOX can cave or they can loose probably close to 30% of their viewers. So go Time Warner, squeeze the greed out of Murdoch.

Image by Eric Schmidt / Google via CrunchBase

Eric Schmidt, the head cheese of Google, has written a lengthy article appearing in the Murdoch owned Wall Street Journal. In the piece Schmidt not only clarifies the distortions Murdoch has been laying out these past few weeks, but also what Google is doing to help the news industry.

First off here is Schmidt talking about Murdoch’s claims:

Google is a great source of promotion. We send online news publishers a billion clicks a month from Google News and more than three billion extra visits from our other services, such as Web Search and iGoogle. That is 100,000 opportunities a minute to win loyal readers and generate revenue—for free. In terms of copyright, another bone of contention, we only show a headline and a couple of lines from each story. If readers want to read on they have to click through to the newspaper's Web site. (The exception are stories we host through a licensing agreement with news services.) And if they wish, publishers can remove their content from our search index, or from Google News.

The claim that we're making big profits on the back of newspapers also misrepresents the reality. In search, we make our money primarily from advertisements for products. Someone types in digital camera and gets ads for digital cameras. A typical news search—for Afghanistan, say—may generate few if any ads. The revenue generated from the ads shown alongside news search queries is a tiny fraction of our search revenue.

That is exactly what I have been saying all along. Google isn’t “stealing content”, they are simply indexing very small tidbits of it so people can easily find it, and they do find it at a rate of one billion per month. I don’t think that’s something any serious news publisher would want to turn away.

It sure looks that way:

Newspaper publishers will now be able to set a limit on the number of free news articles people can read through Google, the company has announced.

The concession follows claims from some media companies that the search engine is profiting from online news pages.

Under the First Click Free programme, publishers can now prevent unrestricted access to subscription websites.

Users who click on more than five articles in a day may be routed to payment or registration pages.

Considering Murdoch has gone after Google simple indexing their site and displaying the headline and the first few words, I don’t know if this would really be caving, but rather an attempt from Google to find a common middle ground. If Google stands by this policy then it would give them some extra ammo to fight Murdoch with.

According to a report in the Financial Times, Microsoft has approached News Corp. about de-listing their sites from Google, which would be an apparent escalation in the search engine wars.

It appears that Microsoft isn’t limiting this to just News Corp either. It’s reported that they are approaching numerous online publishers and offering to pay them for content if they delist from Google. One publisher approached by Microsoft said this is all about “Microsoft hurting Google’s margin”.

Microsoft’s new search engine Bing is their latest attempt to give Google a run for the money. Here are the October search engine market shares, and as you can see Microsoft has a long way to go to beat out Google:

Bing has increased at the same rate that Google has, but what is interesting is that it appears their shares are coming from Yahoo. In July of this year Microsoft and Yahoo entered a deal for Yahoo to use the Bing search engine on their sites in exchange for a split on advertising revenue, so Yahoo’s decrease in the market share also directly effects Microsoft.

Of course the whole basis of this plan depends upon the belief that Google is actually “stealing” content, something that is in serious debate in both the tech and legal worlds. If this war does escalate and end up in the courts then we could finally see a ruling come out on exactly what the “fair use doctrine” covers – something we have been running blind on for years. Given the fact that Google only reproduces the headline and first few words of an article and that this use is both for research and archival purposes, it appears that Google would have a very strong case in the courts. To really solidify their case and put the final nail in the coffin of this war, Google could remove advertising from the news section of their search engine, which is the only questionable part of “fair use” when it comes to their service. Even better would be for Google to spin off the news part of their search engine and make it a non-profit partnered with Google. Google can surely afford it, and this would destroy any battle Microsoft or News Corp may be planning.

Whatever happens with this, it is clear the Murdoch still isn’t set on removing his sites from Google. I just checked again and what I reported a couple of weeks ago still stands – News Corp sites have explicit directions asking Google to index them. This could also be used against the Murdoch/Microsoft plan. What would happen if Google showed that News Corp sites saw a large percentage of their visits originate from Google? I know that they have records of those kind of metrics, and it would be interesting to hear News Corp argue that they didn’t mind Google increasing their online visibility all these years for free.

I had almost forgot about this deal between Google and MySpace, a NewsCorp company. In 2006 the two entered into an agreement. Basically Google would get exclusive search advertising rights in exchange for $900 million over three years. MySpace also had to guarantee a minimum amount of traffic.

That was all three years ago and in the world of the internet, that is an eternity. Now things have changed. MySpace was one a thriving website, one of the best known. Today Facebook has taken the lead and MySpace is on a constant downward spiral.

That’s the deal and then there was this news last week:

MySpace, once the centerpiece of Rupert Murdoch’s digital strategy, has fallen “significantly” short of expectations and is jeopardising [sic] a critical $900m internet search agreement with Google.

Weaker traffic means the News Corp division is now expected to receive about $100m less from a deal that had underpinned investors’ confidence in the MySpace acquisition, executives revealed.

So because Murdoch’s company couldn’t live up to their end of the deal now he might be out some big bucks. Perhaps that is some motivation behind Murdoch singling out Google in his search engine rants. Murdoch is now saying that he will be pulling his content from Google in a matter of “months”. I don’t know why he wants to wait. Google has already stated he can do it now.

Rupert Murdoch really did open a can of worms when he said he was going to pull all of his content from Google. TechDirt decided to take a look at the hypocrisy that surrounds the media mogul when it comes to using other’s content:

As Rupert Murdoch talks about how he wants to cut off Google, while claiming that aggregator sites are "parasites" and "stealing" from him -- and that fair use would likely be barred by the courts, it seemed like a good time to examine at least some of the sites that are owned by Rupert Murdoch that appear to aggregate content from other sites and which rely on the very same fair use argument. We've mentioned a few in the past, but figured it wouldn't hurt to explore them more thoroughly.

Take a look at all the examples of News Corp websites “stealing” (Murdoch’s words) from other websites.

Let me pull up just one example user by TechDirt from the Wall Street Journal:

There has been a lot of talk today about Murdoch wanting to have Google stop indexing his news sites. I’m not going to go into the piss poor business decision this is, but I do need to highlight this:

Mr Murdoch also indicated that he would use legal methods to prevent Google and other search engine “news aggregators” from taking his newspapers’ material.

Really – going to sue Google over this? Let’s take a look at how much Fox News tries to keep Google out.

When a search engine goes to a website it reads a file called robots.txt. This is like an instruction manual for search engines on what to search and not to search. You can view my robots.txt file here.

So what does the robots.txt file on foxnews.com say?

User-agent: *
Disallow: /printer_friendly_story
Disallow: /projects/livestream
#
User-agent: gsa-crawler
Allow: /printer_friendly_story
Allow: /google_search_index.xml
Allow: /google_news_index.xml
Allow: /*.xml.gz
#
Sitemap: http://www.foxnews.com/google_search_index.xml
Sitemap: http://www.foxnews.com/google_news_index.xml

Well look at that. Not only is Fox allowing Google, but they are giving specific directions to Google to read files and index those items.

The best way to explain this I can think of is the example of a robber. Let’s say you open the door and ask the robber to come on in. You then walk him around your house, pointing out all your valuables for him to take. Now after he takes them and leaves you decide to go after the robber legally. Of course a robber would be a person engaged in illegal activity generally, something Google isn’t.

But the tech behind robots. txt isn’t the only way to stop Google from indexing your site. Google offers numerous ways to have your site removed from their search engine, and have already said they will gladly pull his sites out of there, if he so wishes.

There does seem to be something more sinister to Murdoch’s master plan than all this:

Asked how he reacted to the challenge of Google and others for newspapers such as his to remove their newspapers from search results, Mr Murdoch said that once they had in place the means to charge for news, “I think we will”.

He also challenged the idea that Google and others could take just the headlines and opening lines from his papers’ stories, indicating that he would not tolerate even that.

“[They use] a doctrine called fair use, which we believe can be challenged in the courts and will bar it altogether,” he said.

So Murdoch is planning on using Google until he decides it’s time to make people pay, after that it is all him. So how are you going to know what his new “pay sites” offer if you can’t even find them, let alone have an idea of what is published? One would think that a well written headline would be a sure seller for his new product, but apparently old Rupert doesn’t even want that. Instead it appears as though he is going after a “fork over the money then see what you get” model of business. Oh yeah – that will be a big success there.

I can’t wait for all this to happen. It’s a good thing I am not a big decision maker at Google because I would go ahead and save Rupert the very minimal headache of having to have his sites removed and just do it now. That includes all News Corp sites, including things like Fox Movies. Just imagine when someone wants to check out a trailer for some big new movie and decides to Google it? And let’s not forget about all the Fox affiliates out there. Hey they have a right to republish Fox items, so Google shouldn’t take a chance.

I also hope that Rupert does decide to file legal action against Google. Can you imagine the trial if it ever went there? The defense would just have to say “here are copies of documents placed on Fox servers by Fox people asking our software to index their site and place the information in our search results”. I think the only lawyer Rupert would be able to find to take this case if Orly Taitz.

Good luck with that:

Media giant News Corporation Ltd intends to charge for all its news websites in a bid to lift revenues, as the transition towards online media permanently changes the advertising landscape.

News Corp chairman Rupert Murdoch told analysts in a conference call after News Corp released its full-year results that the traditional newspaper business model has to change.

Just because you charge for access doesn’t mean you own the news. The big stories people worry about will also be covered by other news outlet, and probably even better.

Times are tough for poor Rupert, so he has decided the time is coming to charge people to read his news:

Rupert ­Murdoch expects to start charging for access to News Corporation's newspaper websites within a year as he strives to fix a ­"malfunctioning" business model.

Encouraged by booming online subscription revenues at the Wall Street Journal, the billionaire media mogul last night said that papers were going through an "epochal" debate over whether to charge. "That it is possible to charge for content on the web is obvious from the Wall Street Journal's experience," he said.

Asked whether he envisaged fees at his British papers such as the Times, the Sunday Times, the Sun and the News of the World, he replied: "We're absolutely looking at that." Taking questions on a conference call with reporters and analysts, he said that moves could begin "within the next 12 months‚" adding: "The current days of the internet will soon be over."

(emphasis added)

We have heard about the demise of free information on the internet for years. Does Murdoch think he can really change it? How many “exclusives” does any News Corp site have that people are interested in?

I have addressed this before and given my glimpse into what will happen. If a story is big enough, some blogger will pay to subscribe to that site. After that every other blogger will link to that one blogger. So the story will get out and with only one subscription.

Of course if a story is that big then you can bet some other news source will pick it up. Murdoch thinks he can change the internet, but the internet might just end up breaking him.

It’s much better than the apology by the so called editor of the NY Post, but I really think it may be too little to late. Of course it also comes the day after Murdoch’s company saw their stocks drop 4%. Interesting timing there.

Drudge has broken out the big bold font:

What’s the big warning? This:

MURDOCH WARNS: NATIONS WILL BE REDEFINED, FUTURES ALTERED
Tue Feb 24 2009 08:36:39 ET
Media baron Rupert Murdoch issued an urgent internal communication late Monday, warning his staff: "We are in the midst of a phase of history in which nations will be redefined and their futures fundamentally altered."
MORE
The dramatic call comes as markets continue their plunge and the future of media becomes increasingly muddled.
"Many people will be under extreme pressure and many companies mortally wounded," Murdoch declared.
"Our competitors will be sorely tempted to take the easy beat, to reduce quality in the search for immediate dividends."
He continued: "Let me be very clear about our company: where others might step back from their commitment to their viewers, their users, readers and customers – we will renew ours.
"The direction of the business now and over the next few years will define the character of our company for decades."
Developing...

Remember – this is the same guy who owns the FOX news, which is the same FOX news that kept telling us the economy was perfectly fine last year, even when TARP was already being discussed.

I also wonder what “commitment” Murdoch is talking about. Maybe a commitment to push more racist cartoons that promote the killing of our leaders?

The NYPost issued an “apology” for their cartoon that sparked off the protests and debate this week. I put apology in quotes, because it really isn’t that much of an apology, but rather an issue of “if you don’t like it and you didn’t really complain then we are sorry”.

{[}]lt;p>I wonder how the NYPost would respond if the NYTimes published a cartoon depicting Murdoch being shot? That would be a fun experiment to conduct, but I think the NYTimes holds themselves to a much higher standard than a Murdoch propaganda company.

There has been a lot of buzz of Rupert Murdoch slamming the media, saying they have dug themselves into a hole. Of course he is just stating the obvious, but reading through the article, there was one thing that really stuck out at me:

The 77-year-old Murdoch, recalling a long career in newspapers that began when his father's death forced him to take over the Adelaide News in 1952, said the profession has failed to creatively respond to changes wrought by technology.

(emphasis added)

Sure Murdoch owns MySpace, which is a monster in terms of internet real estate, but let’s look at his other big division – FOX News. Earlier this month, Drudge was touting how he beat out the NY Times in ratings. In those same ratings is something else very interesting:

(full report here – pdf version)

Yeah Drudge beat NYTimes, but the NYTimes beat Fox. As matter of fact Fox was the lowest views getter of all the cable news networks.

As someone who has spent years in internet development, I can tell you from a professional stand point that Fox’s website sucks. Their site is way to busy and hard to navigate. Perhaps if Murdoch looked into his own company a little bit, instead of bashing the industry as a whole, then he could lead by example. Until then he is just a whinny old man.