Kara Swisher

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Turnabout Is Fair Play: BoomTown Decodes Rupe's Journalism-Is-Not-a-Free-Cow Op-Ed!

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Last week, BoomTown translated an opinion piece written by Google CEO Eric Schmidt and published in The Wall Street Journal that focused on defending the search giant from criticism that it was, well, killing journalism.

One of the louder critics, in fact, has been Rupert Murdoch, chairman and CEO of News Corp. (NWS), who has been loaded for bear in regard to Google (GOOG), leveling a series of high-profile verbal attacks on the company.

Last week, Murdoch published his own piece in The Journal, which he owns (along with this Web site), on the topic of the wrenching changes in the news business and in which he never mentioned Google by name.

But the company was there anyway, so, in the interests of equal opportunity balloon-pricking, I must also render Murdoch’s post through my decoding machine, because it’s only sporting!

His op-ed, The Journal noted, “has been adapted from his Dec. 1 remarks before the Federal Trade Commission’s workshop on journalism and the Internet.”

What Murdoch wrote: Journalism and Freedom

Government assistance is a greater threat to the press than any new technology.

By RUPERT MURDOCH

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Translation: Crikey, as they say in Australia, I have been getting a little wobbly over Google’s growing power, but those bludgers in government will always make me go more troppo.

And, unlike Eric Schmidt, I didn’t need to be called Emperor Palpatine to scare people. Plain old “Rupe” works just fine to give most people the shakes.

What Murdoch wrote: We are at a time when many news enterprises are shutting down or scaling back. No doubt you will hear some tell you that journalism is in dire shape, and the triumph of digital is to blame.

My message is just the opposite. The future of journalism is more promising than ever–limited only by editors and producers unwilling to fight for their readers and viewers, or government using its heavy hand either to overregulate or subsidize us.

hannitycolmes

Translation: Please try to ignore the salient fact that it was actually Rupert Murdoch–me!–who has been loudly clanging the bell of late about how Google is laying waste to journalism, much as Sean Hannity did to that poor Alan Colmes nightly for a dozen years.

Also, please ignore that I am saying my message is just the opposite, because–really–I hate government more than I hate Google, so this makes perfect sense if you really think about it.

But don’t think about it, mate!

Murdoch wrote: From the beginning, newspapers have prospered for one reason: The trust that comes from representing their readers’ interests and giving them the news that’s important to them. That means covering the communities where they live, exposing government or business corruption, and standing up to the rich and powerful.

Technology now allows us to do this on a much greater scale. That means we have the means to reach billions of people who until now have had no honest or independent sources of the information they need to rise in society, hold their governments accountable, and pursue their needs and dreams.

Does this mean we are all going to succeed? Of course not. Some newspapers and news organizations will not adapt to the digital realities of our day–and they will fail. We should not blame technology for these failures. The future of journalism belongs to the bold, and the companies that prosper will be those that find new and better ways to meet the needs of their viewers, listeners, and readers.

little people

Translation: Teri: Cue the speech about what journalism means for the little people! But also make sure we get in how News Corp. gets all this digital hoo-ha too and how we are not going to let those pointy-heads of Silicon Valley think we are not ready to rumble!

What Murdoch wrote: First, media companies need to give people the news they want. I can’t tell you how many papers I have visited where they have a wall of journalism prizes–and a rapidly declining circulation. This tells me the editors are producing news for themselves–instead of news that is relevant to their customers. A news organization’s most important asset is the trust it has with its readers, a bond that reflects the readers’ confidence that editors are looking out for their needs and interests.

Trophy_Cabinet

Translation: There was a trophy cabinet and award wall just like that at The Wall Street Journal before I bought it. I ate it it for breakfast.

What Murdoch wrote: At News Corp., we have been working for two years on a project that would use a portion of our broadcast spectrum to bring our TV offerings–and maybe even our newspaper content–to mobile devices. Today’s news consumers do not want to be chained to a box in their homes or offices to get their favorite news and entertainment–and our plan includes the needs of the next wave of TV viewing by going mobile.

The same is true with newspapers. More and more, our readers are using different technologies to access our papers during different parts of the day. For example, they might read some of their Wall Street Journal on their BlackBerries while commuting into the office, read it on the computer when they arrive, and read it on a larger and clearer e-reader wherever they may be.

Translation: Teri: Tell Jon Miller to get on a plane stat and start chit-chatting with those Asian manufacturers asap. I am not going to let Amazon (AMZN) head Jeff Bezos guffaw me into oblivion with his Kindle or have “American Idol” get hijacked by Apple (AAPL) or have those Google (GOOG) twins shine me on, even as they are developing some magic mobile phone.

What Murdoch wrote: My second point follows from my first: Quality content is not free. In the future, good journalism will depend on the ability of a news organization to attract customers by providing news and information they are willing to pay for.

The old business model based mainly on advertising is dead. Let’s face it: A business model that relies primarily on online advertising cannot sustain newspapers over the long term. The reason is simple arithmetic. Though online advertising is increasing, that increase is only a fraction of what is being lost with print advertising.

That’s not going to change, even in a boom. The reason is that the old model was founded on quasimonopolies, such as classified advertising, which has been decimated by new and cheaper competitors such as Craigslist, Monster.com, and so on.

pw_gotmilk01

Translation: My second point follows from the first: We can’t charge for milk when we have been giving away the cow for free.

And, frankly, the old media have been lending out Bessie to every Web site that comes looking for a gallon, free of charge, in abject fear that no one likes milk anymore.

In the good old days, when we were the only beverage around–I like to call it a “quasiMOOnopoly”–we could set any price we wanted.

Now, unfortunately, everybody’s got milk.

What Murdoch wrote: In the new business model, we will be charging consumers for the news we provide on our Internet sites. The critics say people won’t pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don’t get something for nothing.

Translation: People will pay, once we de-index our sites from Google and they can’t get their daily dose of the New York Post’s Page Six for free. Where else will they get the latest online tidbits on the Tiger Woods scandal, for example?

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Okay, from everywhere. But Page Six names at least 46 percent more mistresses than TMZ, and that’s worth something.

What Murdoch wrote: That goes for some of our friends online too. And yet there are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production. Some rewrite, at times without attribution, the news stories of expensive and distinguished journalists who invested days, weeks or even months in their stories–all under the tattered veil of “fair use.”

These people are not investing in journalism. They are feeding off the hard-earned efforts and investments of others. And their almost wholesale misappropriation of our stories is not “fair use.” To be impolite, it’s theft.

Right now, content creators bear all the costs, while aggregators enjoy many of the benefits. In the long term, this is untenable. We are open to different pay models. But the principle is clear: To paraphrase a famous economist, there’s no such thing as a free news story, and we are going to ensure that we get a fair but modest price for the value we provide.

Translation: By “friends,” I mean “sworn enemies,” also known as “Google.” (Until it meets with me to do a deal and then it is “friends” again.)

By “tattered veil of ‘fair use,’” I mean “the law I am going to get gutted by my 1,473 lobbyists in Washington, D.C.”

larry-page-sergey-brin

By “to be impolite, it’s theft,” I mean “to be impolite, it’s theft by Larry and Sergey.” (Until they meet with me to do a deal and fork over the moolah, and then it will be a “business arrangement.”)

By “there’s no such thing as a free news story,” I mean “I hope to trick those Google-obsessed Bing boys at Microsoft (MSFT) into paying me that boatload of money they aren’t sending Carol Bartz of Yahoo (YHOO).”

What Murdoch wrote: Finally, a few words about government. In the last two or three decades, we have seen the emergence of new platforms and opportunities that no one could have predicted–from social networking sites and iPhones and BlackBerries, to Internet sites for newspapers, radio and television. And we are only at the beginning.

The government has a role here. Unfortunately, too many of the mechanisms government uses to regulate the news and information business in this new century are based on 20th-century assumptions and business models. If we are really concerned about the survival of newspapers and other journalistic enterprises, the best thing government can do is to get rid of the arbitrary and contradictory regulations that actually prevent people from investing in these businesses.

One example of outdated thinking is the FCC’s cross-ownership rule that prevents people from owning, say, a television station and a newspaper in the same market. Many of these rules were written when competition was limited because of the huge up-front costs. If you are a newspaper today, your competition is not necessarily the TV station in the same city. It can be a Web site on the other side of the world, or even an icon on someone’s cell phone.

These developments mean increased competition, and that is good for consumers. But just as businesses are adapting to new realities, the government needs to adapt too. In this new and more globally competitive news world, restricting cross-ownership between television and newspapers makes as little sense as would banning newspapers from having Web sites.

apps

Translation: Oh, I do not like Silicon Valley, but I dislike government even more!

And now that Google is its bogeyman instead of me, I really hope to finally be able to gut all those annoying cross-ownership rules that prevented me from owning the entire media landscape of every major city in America.

This must be done immediately, because those icons on people’s cellphones–especially that dangerous iFart app–are poised for attack!

What Murdoch wrote: In my view, the growing drumbeat for government assistance for newspapers is as alarming as overregulation. One idea gaining in popularity is providing taxpayer funds for journalists. Or giving newspapers “nonprofit” status–in exchange, of course, for papers giving up their right to endorse political candidates. The most damning problem with government “help” is what we saw with the bailout of the U.S. auto industry: Help props up those who are producing things that customers do not want.

The prospect of the U.S. government becoming directly involved in commercial journalism ought to be chilling for anyone who cares about freedom of speech. The Founding Fathers knew that the key to independence was to allow enterprises to prosper and serve as a counterweight to government power. It is precisely because newspapers make profits and do not depend on the government for their livelihood that they have the resources and wherewithal to hold the government accountable.

you-talking-to-me-766182

Translation: You bailin’ out me? You bailin’ out me? You bailin’ out me? Then who the hell else are you bailin’ out? You bailin’ out me? Well I’m the only one here. Who the %*#! do you think you’re bailin’ out?”

What Murdoch wrote: When the representatives of 13 former British colonies established a new order for the ages, they built it on a sturdy foundation: a free and informed citizenry. They understood that an informed citizenry requires news that is independent from government. That is one reason they put the First Amendment first.

Translation: Teri: Please insert the clarion cry of the First Amendment here, as it always stirs the heartstrings.

FirstAmendment

What Murdoch wrote: Our modern world is faster moving and far more complex than theirs. But the basic truth remains: To make informed decisions, free men and women require honest and reliable news about events affecting their countries and their lives. Whether the newspaper of the future is delivered with electrons or dead trees is ultimately not that important. What is most important is that the news industry remains free, independent–and competitive.

Translation: Believe me, if we could push a button and get rid of the whole Internet, News Corp. and Time Warner (TWX) and Viacom (VIA) and CBS (CBS) and the whole lot of us old media players would.

Barring that, whether the newspaper of the future is delivered with electrons or dead trees is ultimately not that important.

What is most important is that the news industry shake down big piles of dough from those Silicon Valley moneybags–whether they be Google or that Mark Zuckerberg kid, whenever Facebook goes public, or those Twitter dudes (if they figure out a way to make any money outside of fund raising)–in order to remain free, independent–and competitive.

It is, after all, the American way.

Please see this disclosure related to me and Google.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work