AllThingsD » pay wall

A Ray of Light for the New York Times

Peter Kafka — Mon, 14 May 2012 18:38:09 +0000

It’s easy to write dour predictions about the state of the newspaper industry. So here’s a relatively sunny one: One day, not that far away, the New York Times’ growing subscriber base will make up for its shrinking ad business.

That will happen in the middle of 2014, says Barclays analyst Kannan Venkateshwar, when circulation growth at the paper will start offsetting the decline in the Times’ ad sales. Here’s what that looks like in chart form:

True, one reason that circ growth will lap ad losses is that the losses will be slowing after much steeper declines. Still, the best-case scenario for most old-line media businesses is that digital sales increase faster than physical sales drop, and that’s essentially what Venkateshwar says is happening here. A year after the Times introduced its pay wall, it now has 450,000 digital subscribers — a number that impresses lots of industry skeptics.

Earlier this spring, when the Times said it was making it harder to read the paper online without paying for it, by dropping its free article limit from 20 per month to 10 per month, I wondered if the Times had made the move out of necessity — because it needed to boost its digital sales — or optimism — because it was confident it could boost its sales with a taller pay wall.

But after some thought, and bouncing the idea off a few industry folks, I’ve come to the conclusion that it’s both. The Times would sure like to accelerate Venkateshwar’s timeline, and that’s probably not going to happen by fixing its ad problem. Meanwhile, the paper seems relatively confident that raising the pay wall equals marketing the pay wall. And the nice thing about the system the paper has built is that if it doesn’t work, it can fiddle with the controls some more.

News Corp. Puts Myspace on Double Secret Probation

Peter Kafka — Wed, 03 Nov 2010 21:53:31 +0000

That big Myspace relaunch we read about last week? That’s all fine and good.

But the troubled Web property is a…really troubled Web property, its News Corp. parent stressed today. And it needs to get its act together before it gets kicked off campus.

That’s the message that COO Chase Carey took pains to get across during his company’s earnings call this afternoon.

Revenue at Myspace was down $70 million compared to the same quarter a year ago, the company said, and “traffic numbers are still not going in the right direction, Carey said. Which means that its “current losses are not acceptable or sustainable.”

Okay. But Myspace has been in decline for some time, and Jon Miller and Mike Jones have been trying to fix it for more than a year. And last year at this time, we heard a similar assessment, only then Carey kept calling the site a “work in progress.” So how much more time do they have?

Carey: “We judge in quarters, not in years.”

My understanding is that when Miller took the job as News Corp.’s chief digital officer in the spring of 2009, he believed he had a real shot at fixing the social network, which had already cooled from red-hot to not at all.

But sources in and out of News Corp. tell me that Miller and his team are now merely hoping to patch the service long enough to find a buyer. Perhaps no one has told Carey, who seems to be conducting an anti-sales pitch.

——————-

EARLIER:

First look at Rupert Murdoch’s latest report card: News Corp. ended the September quarter with revenue of $7.4 billion and earnings of $0.27 a share (after factoring out a one-time tax gain). That’s almost exactly what the Street was looking for–expectations were $7.4 billion and $0.24 per share.

A quick run-through by unit:

Cable: Up, because ad dollars are up and so are those affiliate fees that cable providers don’t want to pay but do.
Movies: Down, because last year the company had an “Ice Age” movie in its results, and this year it’s fairly hit-less. It is making money selling reruns of “How I Met Your Mother,” though.
Broadcast TV: Up, because local TV stations are doing better than last year, when they were still crippled by the recession.
Satellite: Down, because costs were up.
Publishing: Up, because newspapers are doing better than last year, when they were terrible. Ad revenue is up 13 percent worldwide. (This is where I note that News Corp. owns Dow Jones, which owns this site.)
Random other stuff: Down, in large part because of Myspace and the rest of News Corp.’s digital unit, which is still trying to turn around.

I’ll come back to liveblog the conference call at 4:30 eastern, in the hopes that Murdoch says something interesting about politics, pay walls, the economy, Myspace, Apple and/or Google. He usually does!

LIVEBLOG:

BIG bummer: No Rupert on call today–because he’s traveling. (Some place with no phones? What’s up with that?)

CFO Dave DeVoe running through segment performance.

Cable: Some boasting about Fox News, FX, Big 10 Network, etc.

Movies: Nothing new here.

TV: TV stations up, but broadcast network losses up big “from higher cancellation costs.”

Satellite: [Apologies, had to duck out for a second.]

Newspapers: Again, ads up in all big newspapers.

Other/Digital: $70 million lower search and ad revenue at Myspace y/y.

Guidance: Leaving unchanged (though DeVoe notes that Myspace is still under plan).

COO Chase Carey:

Lots of focus on our retrans deals, and they are “critical” to our future. “We will be taking this business to a whole new level of profitability.”

Lots of growth ahead in International pay TV market.

Walk through of “key initiatives” throughout the company.

[Still sulking over Rupert-less call.]

Fox Film hasn’t had breakout hits, but no stinkers “in an industry known for them.”

We’ve got Jim Cameron locked up for Avatar 2 and 3, you know. And Modern Family is going to make us a pile of money in syndication.

Wish the World Series wasn’t such a bummer, and a short one. But NFL on Fox doing great.

WSJ still growing. Building digital business that “will take time to emerge.” “We feel very good” about subscription business in U.K.

“We’ve been clear that Myspace has been a problem.”

But relaunching “and we feel really good about” it. “Current losses are not acceptable or sustainable” and current management knows it, even though it’s not their fault.

But we know that we have to work very hard in coming months to get this thing sustainable.

[This is some of the most negative commentary I've heard yet from News Corp. on Myspace. Hard to sell an asset when you're describing it this way.]

Q&A:

Myspace: How much time do you give the relaunch to figure out if it’s successful. And what if it’s not?

Carey: We judge in quarters, not in years. Goal is to get to a place where top-line revenue is going in the right direction and “a clear path to profitability.”

We feel good about the relaunch. But “our traffic numbers are still not going in the right direction” and we have to stabilize that.

Fox TV content on digital platforms: It’s available on Hulu and Fox.com. How is that strategy going, and will you continue to be open?

Carey: Broadly: “This digital arena is still evolving.” We’re very focused on managing rights. Key issues: Windows, ad load, pricing. [Not answering at all, really.] “We think the digital arena is a very important one” particularly mobile, iPad, but “look, scarcity of our product is a real value.” But we’re learning as we go. “I do think it’s important that the digital platforms continue to develop dual revenue stream options.” That’s critical, and options are just beginning to evolve.

More on Myspace: There are a lot of operations in “other” besides Myspace: Mobile, Fox Audience Network, etc. What else could improve there?

Carey: Only two other businesses in there: Mobile, and outdoor networks, (and IGN). Not a lot of room for growth in those businesses.

So it’s really about Myspace?

Yes.

Avatar: What’s upside here?

Carey: Sequel to the most successful film ever? It should be pretty good! “Enormous events, without comparison or rival.”

[Please bring Rupert back!]

Please talk about terms of new Cameron deal?

Nope.

On retrans: Cablevision said they got better terms by holding out for a couple weeks. How do you react to that? If true, will we see more of these holdouts?

[Also a question about BSkyB I'm not that interested in.]

Carey: Mostly I saw Cablevision complaining that the government didn’t bail them out. But we feel pretty good about where we are. We didn’t think the government needed to get into it, and it would have been nice if the government would have been clear up front “it may not have gone off the air at all,” but whatever–”this was a matter to be dealt with between private parties.” [Ignore all those press releases we sent out!]

Can you talk about advertising trends and expectations?

DeVoe [I think]: They haven’t changed.

Cable margins: How long can you keep growing them?

Carey: We have room to drive a number of our channels, via more distribution, jacking up fees, advertising, etc.

What about getting more money from regional sports networks?

Carey: Won’t get into specifics.

[We want Rupe! We want Rupe!]

International channels seem to be doing well. Where is that growth coming from?

Carey: Part of it is the weak U.S. dollar. But overall, growth is “big and broad.”

Oh man. Even Chase Carey is yawning as he answers the question.

[Skipping accounting question.]

Back to network TV: Please talk about sports programming costs, etc. NFL, baseball, NASCAR. You spend a lot. Does retrans help support those costs? Or will you move some of that to cable?

Carey: I don’t think it makes sense to differentiate broadcast and cable much anymore. That’s the point of retrans–to make broadcast look like cable, with dual revenue stream.

On sports: It’s expensive, and draws big crowds. “It’s a unique strength in a world of DVRS” but “they come with big price tags.” We’d like to continue running it, but we have to do it at the right price.

Retrans does help, though–networks that are only ad-supported won’t be able to pay for these rights over time. Still, gotta be disciplined, etc.

Back to digital: What’s going on with Google TV? Are you thinking about different devices and different screens as a way to window, instead of calendar? I.e.: Make it available on PC but not on the big screen, etc.

Carey: I think within the house, the difference between screens won’t matter. I do think mobile is a discrete platform. [And some general chatter about tablets.]

But generally, “our content is incredibly valuable” and “we’re not going to throw it out there for everybody” unless we get compensated for it.

[Boring question about syndicated TV. Carey flipping through papers]

Hey, what about M&A deals, like Yahoo?

“Things like Yahoo are because the press needs things to write about.” [Zing! Also, hey, Jon Miller!] “We don’t need to make any acquisitions. But if there’s something out there, we should consider it, but we’ll do it in a very disciplined way” like we have in the past. Generally, we’d rather build than buy. “But if we see something we can acquire at a very attractive price that fits, we’ll take a look at it.” We’re not shopping.

[Skipping another cable channel question.]

Time for press Q&A:

How do you make broadcast look more like cable?

Carey: Retrans fees, like we’ve been talking about for the past couple years.

What about doing “premium video” (windowing movie release on TV?).

Carey: Looking at it.

What about further delaying movies to Netflix, Redbox beyond 28-day window (Warner talked about this today)?

Carey: We’re okay right now, but we’re looking at it. But as VOD grows, windows will change and evolve. But right now “we feel what windowing we’ve done has been good for us.”

Color on Apple TV 99-cent rental, please:

Carey: It’s pretty new. Only relevant for the past month or so. Too early to judge.

What’s your vision for European and British markets after you buy Sky? Will you buy Endemol?

Carey: Don’t really want to talk about it, too early.

Please talk about Times of London pay wall performance to date. Also, what are you thinking about your iPad newspaper in the U.S.?

Carey: Re U.K.: “We feel very good about it. Realistically, it’s very early….This is not something that’s a one or two quarter game.”

Same thing with the “whole digital arena” evolving, etc.

Hah. Refuses to talk about iPad newspaper. Which is not a newspaper!

Call finished, mercifully.

Spotify's Real News: No News! But Big Bags of Cash Might Help

Peter Kafka — Wed, 27 Oct 2010 21:58:04 +0000

Nope. Apple’s not buying Spotify.

Now, on to real news: There is no official news about the streaming music service’s attempt to land on U.S. shores. Spotify has yet to land a single U.S. label deal, even though it continues to insist that it will get things settled in time for a 2010 launch.

But the company has made progress with the labels in recent weeks, according to multiple sources. That’s in part because it is now willing to hand over real money, either in the form of advances or as guarantees spread throughout the life of a multiple-year contract.

How much money? Depends on who you talk to: One source thinks Spotify is now offering “tens of millions” to the labels to get a U.S. deal done; another person familiar with negotiations thinks Spotify will eventually end up spending $100 million to get the big four labels–or at least three of them–in line for a launch.

But money alone won’t get Spotify into the U.S. Or put another way: The amount of money will depend in part on the real sticking point in the negotiations–the amount of free music that Spotify users can listen to before they need to become paying subscribers.

In Europe, where Spotify has been a very big success, listeners can stream an unlimited amount of music, on demand, without ever paying a cent. But in the U.S., rival streaming services like Rhapsody, MOG and Napster generally only offer a very brief trial period of a few days before requiring that a pay wall go up.

For the past two years, Spotify has insisted that free, unlimited streaming is the only way the service will work, because that’s Spotify’s most effective marketing technique. Subscribers who do pay up get benefits like ad-free music, and the ability to port their songs to mobile devices like iPhones.

But the labels, most notably Warner Music Group, have insisted that unlimited free streams only serve to strip away their product’s remaining value–if you can listen for free on Spotify, why would you ever buy another CD or iTunes single?

“[Spotify executives] are perennially underestimating label resistance to the free stuff,” says an industry source familiar with the discussions. “And it seems the checks are either not big enough or the labels really won’t give on free.”

Until that gap gets solved–either via compromise or cash–Spotify can’t come to the U.S.

The company had recently been discussing a mid-November launch date, but unless things move quickly, that can’t happen. And even people who are optimistic about the company’s chances concede it may not get it done in time for a pre-Christmas launch, which would force things back to 2011. Spotify declined to comment.

Among the four labels, Sony appears closest to a deal, sources say–a pact is “essentially signable,” according to one source, though another insists there is nothing “executable.” Sony declined to comment. In order to launch, though, Spotify will also need Universal Music Group, the world’s biggest music company, and either Warner or EMI Music Group.

A Newspaper Pay Wall Goes Up–And So Do Visitor Numbers

Peter Kafka — Tue, 19 Oct 2010 17:40:38 +0000

The New York Times is getting ready to roll out a “metered model” pay wall in January, and plenty of people fret that the paper will see its audience disappear when the (porous) gates go up. Here’s a counterargument: The Telegram & Gazette.

In August, the Worcester, Mass., paper put up a Times-style pay wall: Visitors can read 10 “local” articles a month for free, but after that they need to pay up. It’s not a coincidence that the Telegram is using the same idea that the Times will try in a few months–the paper is one of several local titles owned by the Times itself.

So. How’s that Telegram doing since the wall went up?

Just great, Times CEO Janet Robinson said during the paper’s earnings call today: The Telegram’s metrics are “on plan,” and traffic hasn’t suffered.

In fact, Robinson said, the Times was pleasantly surprised to see that the Telegram’s unique visitors number had increased since the wall went up.

What’s that? I asked the Times for numbers to flesh that one out, but it declined. ComScore, though, does back Robinson up: The Web traffic counter says 281,000 U.S. unique visitors came by the Telegram in August, and that number crept up to 294,000 in September.

That’s a tiny bump, though comScore often has a difficult time measuring smaller sites. For comparison’s sake, note that the Telegram tells advertisers it reaches 700,000 uniques a month.

Still, a bump is a bump. And it’s certainly not the plummet that many people would expect. When the London Times put up a pay wall this summer, for instance, it saw traffic drop a reported 90 percent. (News Corp. owns both the London Times and this site.)

So how do we explain the Telegram’s increase? In the absence of input from the Times or the Telegram (I’ve asked both for comment), we have to speculate. Feel free to add your own in, but I can start with a few theories:

Maybe the Telegram had some particularly blog-friendly, Facebook-friendly or Google-friendly stories in September. If that’s the case, the metered model would work well for the site, since it encourages casual visitors to show up via referral, without having to pay up. For a relatively modest site like the Telegram, you wouldn’t need many high-traffic stories to push up its base number.
Or maybe it’s just as simple as a seasonal spike: Traffic numbers often droop in the summer, when people have better things to do than sit in front of their browsers, and then spike back up in the fall.

In any case, this should give the Times a bit of confidence about its strategy for the flagship paper, which it promises to tell us more about soon.

UPDATE: Some readers are having a hard time accepting Robinson’s assertions and comScore’s numbers.

I have no reason to think that Robinson, the Times or the Telegram made the data up. If you’re a conspiracist who thinks otherwise, you should note that the NYT wasn’t boasting about the data during the call, though Robinson did take time to read off a whole laundry list of digital accomplishments. It only came up in response to a question about the Telegram’s performance.

But different third-party analytics companies often reach different conclusions. So if you do want to look at a different data set, here’s one from Compete, via Jonathan Mendez. As you can see, it tells a very different story–a 20 percent drop from August to September (click to enlarge):

ABC iPad App's Newest Feature: Twice as Many Ads

Peter Kafka — Wed, 16 Jun 2010 11:26:05 +0000

That free ABC iPad app everyone loves? Good news! It’s still free. But it will cost you a bit more of your time: ABC has doubled the number of nonskippable ads it runs with each episode.

Next up: The Disney (DIS) unit will be doing the same thing with the shows it runs on its ABC.com site, VideoNuze reports.

If this sounds like a rerun, there’s a good reason. Disney has been talking about bumping up its online ad load for two years. The fact that the company is just getting around to it now tells you quite a bit about the state of Web video advertising and the caution media buyers have about deviating from any norm, no matter how recently established.

In this case, the conventional wisdom is that Web viewers won’t tolerate more than a light dusting of video ads. Right now, most ABC.com shows feature about 2.5 minutes of ads, compared with the 20 minutes the network stuffs into a typical one-hour broadcast show.

To get a sense of how much money ABC has left on the table, consider: The network says iPad owners have downloaded the app from Apple’s (AAPL) iTunes store 800,000 times since the April 3 launch and have watched 4.2 million episodes.

If you’re tech-savvy enough to be watching shows online, though, you’re probably also familiar with a DVR, which means you instinctively reach for the fast-forward button every time you see a spot. And you can’t do that online.

But if ABC pulls this off, you’ll likely see its peers follow suit. Note, by the way, that Google’s (GOOG) YouTube has been steadily bumping the ad load on its clips.

That’s a bummer if you like to pretend you live in an ad-free Web nirvana. But if you live in the real world, this isn’t terrible news: More online ads make free Web programming that much more valuable to the networks, which makes them that much more likely to keep putting it out there–and keep it in front of pay walls.

NPR CEO Vivian Schiller Live at D8: There's a Reason We're Not Called National Public Radio Anymore

Peter Kafka — Wed, 02 Jun 2010 17:32:55 +0000

Radio was supposed to be gone by now–wiped out by iPods, on-demand streaming and an endless buffet of personalization options. But the digital wave doesn’t always break the way people predict, and it turns out that National Public Radio’s audience has grown through the Web era: It now attracts a record 28 million listeners a week.

There’s still plenty for CEO Vivian Schiller to worry about, though. Like how to hoover up the donations that power her nonprofit in a recession. Or how to cover international news when it’s increasingly risky to do so.

But this isn’t Schiller’s first time at a media company facing big challenges. Her last gig was at the New York Times, where she ran the publisher’s flagship Web site.

Liveblog

Prior to Schiller’s appearance, we’re treated to a gag reel: Your favorite NPR personalities trying out inappropriate digital memes: A Karl Cassell iPhone app, Scott Simon in a motion-capture suit, etc. Good stuff.

Kara: Before we get to your current job, tell us about your old gigs.

Schiller: Walks through bio: NYT.com, cable, Russian interpreter, etc.

Kara: Okay, back to radio. Where are you?

Schiller: First of all, note we don’t call ourselves National Public Radio anymore. We’re NPR. That said, we’re still growing our radio audience. We have 34 million listeners a week. But our job is to inform citizens, via universal access. That used to mean radio, but we don’t think we should be limited to that anymore.

Schiller: This wasn’t done in response to declining audience, by the way. We just wanted to reach more people, on more platforms. We want to make it as widely available as possible. So all our RSS feeds are full-text. And we’ve got a very robust API, etc., which allows us to do cool things like the iPad app, which we made very quickly. And an Android app, which a developer built on his own. We just made the code for his app totally public.

We get over a billion requests on our API. Very few media organizations can say that. So we’ll see more cool stuff. Like combining NPR stories with information from local stations and creating “news products” that track trends, like the oil spill or the flu epidemic. “We don’t know what could be created, but we know things will be.”

10:43 am: Kara–How hard is it to change a radio organization into a multimedia organization?

10:44 am: Schiller–Within NPR, they were already starting to do it when I came on board. You don’t want to force people into it. You let early adopters show the way. There were concerns that we were taking resources away from traditional radio to go into digital, which was not the case. We put all 300 journalists into a digital training course, though.

10:46 am: Schiller–Outside of NPR, at the affiliates, it was a different story. Some smaller affiliates weren’t really set up for digital, so we had to provide tools for them so they could be part of the process. Some of this was tools for photos, etc. But fundamentally, helping them deliver audio streams. Radio towers are going away within 10 years, and Internet radio will take its place. This is a huge change and we should embrace it. Mobile will play a big part.

10:47 am: Our biggest shows are “Morning Edition” and “All Things Considered.” Those are tent poles. We produce and distribute those. Others we only distribute, like “Fresh Air.”

10:49 am: Kara: So do these shows become Internet shows or radio shows?

10:49 am: Schiller: I think of them as shows. We’re agnostic about the way they listen to it. All of our revenue streams work equally well with each delivery method. And to the listener’s ear, it’s identical. So why should we care? Forty percent of weekday listening is in the car, which makes sense. When cars are Internet-enabled, that should be the same thing.

10:51 am: Kara–Will you ever charge for this stuff?

10:51 am: Schiller–Nope. That’s our mission, to provide this stuff for free. We ask our listeners to contribute, and about 10 percent of them do, pretty consistently. That said, on a B2B level, this could change. Our stations don’t pay for our Web programming right now, but that could change. They get it free with the radio license fees they already pay.

10:52 am: Kara–Do you think commercial radio will be able to charge for their shows on the Web?

10:53 am: Schiller–Question of the moment. There’s a disconnect. Do publishers need the money? Yes. Do people want to pay? Not in large numbers.

10:53 am: A memory trip back to NYT.com and its Times Select pay wall experiment.

Schiller–We got up to 200,000 subs, $10 million a year. But that was a pittance compared with ad revenue we were generating. And we had to weigh that against the audience weren’t reaching. We figured the $10 million wasn’t worth it. So we dropped the wall, and within a couple of months, our unique monthly users went from 12 million to 20 million. Did that immediately translate into revenue? No, not right away. But eventually.

10:55 am: Schiller–What they’re doing now, by the way, is not the same thing. It’s not going to cut off Tom Friedman from a kid in a Bangalore Internet cafe. So I think that could work.

10:56 am: Schiller asked to talk about Web news in general. A bow in the direction of “creative destruction”–in this case, laid-off journalists creating interesting stuff on the Web. The problem is that all of these sites, like the one in San Diego, etc., don’t have enough reach. So we should be able to partner with them, and create a “supernetwork”–”not a mega-portal” but partnerships between the smaller regional stations and the mother ship, etc. We already doing that with Pro Publica, etc.

10:58 am: Kara–What devices are most important to you?

10:59 am: Schiller–Of course, I need to praise the “magical device.” It’s “all things to all people.” I do wonder if it’s going to obsolete the iPod touch….We’ve had 300,000 downloads of the NPR iPad app. The trick is to create an app that takes particular advantage of the device.

Q&A:

Is there a way to support NPR without supporting the local station?

Schiller: No, not really. The lifeblood of NPR is the local station. You’ll note we always route the membership drives through the local station. However, we do have a philanthropic support through the NPR Foundation, but that’s not for small individual donations.

But the listener can go directly to NPR in the Web model, and doesn’t need to go to the local affiliate. So what’s the local affiliate’s role in the new paradigm?

Schiller: The fact that so few journalists are covering state and local news is scary. We’re committed to providing that local coverage via the affiliates. “We’ve got to have that local coverage, and NPR can’t do it….To the extent that [local coverage] doesn’t suit your needs, then we have to work together to make it meet your needs.”

Would NPR consider working with for-profit organizations to help solve the local news problem?

Schiller: We’re not constitutionally opposed to working with commercial entities. But I also think that some of the small, local nonprofits we’ve been talking about can make this work, too. Especially if we can leverage our strengths, which is one way to generate more philanthropy.

Are we always going to be counting on philanthropy to fund news coverage going forward?

Schiller: Yes.

How are you working to develop new shows that will become your next “All Things Considered,” “Morning Editions,” etc?

Schiller: We used to have a sort of TV-like development process where we spent a lot of time and money working on new shows. Instead, we’re incubating smaller scale things, like “Planet Money,” which isn’t a full show, and isn’t supposed to be a full show. But it’s a podcast and a touring show, etc. We can help people iterate without committing a lot of money.

You mentioned that both commercial publishers and not-for-profits get about 10 percent of their users to subscribe or donate. Is that 10 percent a universal truth?

Schiller: I hope not. I hope we can increase those numbers. “I don’t know what the answer is, but we’re going to try everything and see what sticks.”

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

The New York Times Plans a Blogger-Friendly Pay Wall. Link All You Like!

Peter Kafka — Tue, 25 May 2010 10:00:32 +0000

Will the pay wall the New York Times is building scare away the paper’s natural allies–bloggers who like to link to the site?

Daily Finance’s Jeff Bercovici floats the scenario by pointing to some eye-popping statistics. A new study says the Times is one of the four news sites bloggers link to most often. The Wall Street Journal, meanwhile, doesn’t warrant a mention.

Bercovici connects the dots: The Times is free. But The Wall Street Journal–which like this Web site, is owned by News Corp. (NWS)–has a pay wall. So if the Times puts up a wall, it could see its links dwindle, because bloggers don’t want to point to paid sites.

Right?

Probably not. Because that theory requires New York Times (NYT) management to work hard to scare away bloggers and other linkers (from Twitter, Facebook, etc.). But the Times says it’s going to make the commonsense move of encouraging links to the site.

Remember that the Times is building a “metered model” whereby visitors to the site can read a certain number of articles per month for free. That’s designed to keep attracting the casual, drive-by readers who make a up a large chunk of traffic at most sites. Even better: Bloggy links to the site won’t count against readers’ limits.

So says Times spokeswoman Stacy Green, in response to an email query I sent her yesterday:

Once the pay model is implemented next year, the majority of our readers will be unaffected when using the site and will continue to have the same experience they have always had. Readers will only be prompted to pay after reaching a certain reading limit. The pay model will be designed so readers that are referred from third party sites such as blogs will be able to access that content without hitting their limit, enabling NYTimes.com to continue being a part of the open web. We have not yet set the reading limit and we will communicate that once we have made the decision.

UPDATE: Green adds a bit of nuance in a comment below: Visits to the site via a link will count toward your limit. But if you’re over your limit, an outside link will still allow you to read that story. So the notion of a “limit” is hazy.

The Times seems intent on making this distinction, but for most readers it won’t matter: All they’ll know is that if a blogger, or a pal on Facebook or Twitter, gives them a link to a Times story, they’ll be able to read it.

So that one’s settled, yes? If so, we can move on to the more interesting question: How many Times readers will be willing to pay for access when the wall goes up? But we’re not going get an answer to that one for many months. Patience!

Whiskey Media's (And Former CNET CEO) Shelby Bonnie Talks Content and More!

Kara Swisher — Thu, 20 May 2010 07:39:53 +0000

Yesterday, BoomTown caught up with Shelby Bonnie, the former CEO of CNET who is now running Whiskey Media, the social publishing start-up.

Sausalito, Calif.-based Whiskey is debuting its latest site today, called Screened, focused on video entertainment, which will combine both professional and user-generated content, much as its other four sites–Anime, Vice, Giant Bomb, Comic Vine and Tested–do.

Heaped on top of the niche content, aimed at passionate fans, is social networking, as well as gaming and wikis.

It’s yet another twist on the creation and distribution of content and another example of how quickly the publishing industry is changing and innovating sometimes too.

From pay walls at News Corp. (NWS) to the run on low-cost content outfits to the decline of traditional media outlets and the growth of others, it’s definitely a dynamic time.

Here’s the video of my interview with Bonnie, who has been through a lot of these shifts:

[ See post to watch video ]

And here is the press release from Whiskey on Screened:

Whiskey Media Debuts Screened for Passionate Fans of Film, TV and Online Video

Media company’s fifth web property delivers measureable brand engagement by combining original editorial content with social gaming mechanics

San Francisco CA, May 20, 2010–Social publisher Whiskey Media today announced the debut of its fifth property, Screened–a new online destination dedicated to video entertainment across all screened devices. Screened, created by former CNET executives, joins Whiskey’s four other category-leading properties–Anime Vice, Giant Bomb, Comic Vine and Tested–in combining original editorial content with social networking, game mechanics and wikis to create one of the most relevant and engaging film, TV and video destinations.

“We see our model as a new breed of media company, native to the Internet and not just an assimilation of content that many sites have done before. The Internet generation expects their media to be socialized and relevant to their lives,” says founder and CEO Shelby Bonnie. “Social publishing attracts highly loyal, knowledgeable and motivated audiences and provides brands the opportunity for even deeper integrated engagement than currently available elsewhere online.”

Screened is created by fans, for fans

Screened will simultaneously spark and settle debates, create and squash rumors, and stimulate engaging conversations. The site will also feature a comprehensive movie and TV database with detailed information about films, actors, directors and writers, as well as other content such as locations, characters, objects, clichés and more.

Screened is built for the savvy entertainment fan who will watch video content across multiple devices and different screens. For a generation who will consume video entertainment across phones, iPads and computers in addition to movie screens and TV screens, Screened will help people find the best in Hollywood blockbusters, independent and classic films, TV shows and online video entertainment that can be watched or streamed to screens both large and small.

“The beauty of Screened is that its content is governed by real people who are passionate about movies, TV and video, and want to share their enthusiasm and opinions with like-minded people,” said Alex Navarro, general editor, Screened. “We’re entertainment enthusiasts too, which is why we’re so excited to create a dynamic community that we believe will be worthy of a discriminating audience’s time.”

Screened entertains and rewards with Quests

Like Whiskey’s other properties, Screened will feature game mechanics, called Quests, incentivizing viewers to become active contributors and motivating communities to participate at the editorial-level of content creation. Quests incorporate features typical of online social games–badges, points and scavenger hunts–rewarding site users for creating new pages, starting a forum topic, cleaning up existing content or engaging with brand advertisers.

During a one-week preview of Screened for members of other Whiskey Media properties, the community completed more than 24,844 Quests that produced 20,000 movie entries, 200,000 actor and movie images and 1,500 genres. The average person who contributes content contributes 43 items to the community and spends more than 11 minutes on the Screened site.

Beyond Screened, the community across the other four Whiskey Media sites has started more than one million Quests that have produced more than 7,500 new product reviews and product description pages since launch. Quests have been shown to increase page views and time spent on the site by more than 53 percent, providing increased opportunities for brand marketers to interact with Whiskey’s loyal communities.

Quests work because they are a part of the community experience in each Whiskey Media brand. The ability to share and consume information about the topics people love creates a different type of online community where each member is rewarded more for their knowledge and contribution versus whom they know. Quests create a way to show their knowledge and passion to a like-minded community.

Because Quests are an integral part of the community experience and enjoyment, they also provide ways for brand marketers to reach an audience without disrupting the audience experience.

“Whiskey Media is in a unique position to deliver engagement for brands given its community-based approach and ability to integrate campaigns into its sites, enhancing the user experience, not disrupting it,” said Brian Monahan, SVP, global lead social media, Universal McCann.

Google's Secret Plan to Save Newspapers: Sell More Expensive Ads

Peter Kafka — Tue, 11 May 2010 11:00:37 +0000

Google isn’t killing newspapers, says The Atlantic’s James Fallows. In fact, it’s trying to save them.

I’m with Fallows on the first point. Not convinced at all about the second one, but Fallows is, and he spends many pages explaining Google’s reasoning and plans.

Short version: Google thinks newspapers are good for Google, because they generate information people want to search for. And when newspapers stop printing actual newspapers and start selling online ads for as much money as print ads, everything should work out fine.

In the longer version, Fallows walks readers through the basics of the newspaper crisis (disappearing classifieds, disappearing display ads, disappearing subscribers). And he touches on some tinkering Google (GOOG) is doing that might be useful for publishers and news organizations (Living Stories, Fast Flip, YouTube Direct, help build pay walls).

That stuff won’t matter, though, unless newspapers can cut a lot of costs and make a lot more money from online ads.

Part of the cost-cutting is kind of easy, because it will happen whether papers like it or not. Their print product will eventually wither away, and they’ll save a lot of money on paper, ink, delivery trucks, etc. And part of Google’s growth strategy hinges on more money flowing into online display ads. If Google is right, some of those dollars will flow to publishers, so that’s good.

But assuming that online ads will be as valuable, per eyeball, as offline ads have been is a very big leap of faith. And unless they’re close, there’s no way a news organization can have anything like the workforce it employs now–even if the entire operation is digital.

This line of thought leads us to a dark place that we’ll probably be visiting anyway, so let’s not leave on that note. Let’s try Fallows’s tempered optimism instead and hope he’s right and I’m wrong:

The problem Google is aware of involves the disruption still ahead. Ten years from now, a robust and better-funded news business will be thriving. What next year means is harder to say….If the prospect is continued transition rather than mass extinction of news organizations, that is better than many had assumed. It requires an openness to the constant experimentation that Google preaches and that is journalism’s real heritage.

News Corp.'s Fabled Subscription Plans a Month Away

Peter Kafka — Tue, 04 May 2010 21:56:25 +0000

Remember Rupert Murdoch’s plan to convince other media companies to join him behind a pay wall and offer their stuff only via subscription? It’s still around, in some form. We’ll hear more about it in “three to four weeks” Murdoch said today during News Corp.’s earnings call.

Just what Murdoch has in store isn’t entirely clear. Last year, he sent digital media head Jon Miller out to convince rival newspaper publishers to join News Corp.’s Wall Street Journal in the pay-to-play ring. But it appears that Murdoch may now be thinking of a subscription offering that extends beyond newspapers and into entertainment.

I’ve asked News Corp. if it has anything to add to Murdoch’s hazy comments this afternoon, but I’m not optimistic. I do think we’ll hear more about this before the press conference Murdoch plans for later this month, though.

Meanwhile, here’s some background on “Project Alesia,” the subscription/pay wall plan that may or may not be what Murdoch was talking about today.

Earlier

We’ve seen the numbers, so we know that News Corp. had a very nice quarter. Now let’s hear what Rupert Murdoch has to say about his company’s performance. I’m also interested to see how much ire Murdoch expresses for Google (GOOG) and how much ardor he has for Apple’s (AAPL) iPad, among other digital topics.

The following is a live paraphrase that includes my editorial notes; I’ll note direct quotes where appropriate.

Liveblog

Dave DeVoe going over numbers from the release.

Earnings include one-time items of three cents per share. [Should net that out of earlier reports when comparing to Wall Street expectations.]

Newspapers: Operating income up nearly five times. Higher advertising across nearly all markets. Forex helps, too.

“Other” (includes Myspace): Lower search and ad revenue, but costs are down.

Some balance-sheet talk: We’ve got a lot of cash on the books, and we know it. Some of it will get paid out to Jim Cameron and other participants in “Avatar.” But we’re working on ways to deploy the extra cash. We’ll get back to you on it by the next quarter.

Guidance: We’ve done better than anticipated in lots of our business for the last nine months, but our next quarter will be down. That’s because we expect the film business to be down $100 million, even including “Avatar” DVD releases (reason: We had very good quarter last year). Also, Fox Broadcast will be down. So we’re only bumping up guidance a bit.

Rupert Murdoch:

Exceptional results, “pretty much across the board.”

We’re psyched for five reasons:

1. Content. Really important, and we’re really good at it. Shout-outs for “Avatar,” Fox News Channel, newspapers, TV shows. “Fortune favors the bold,” etc. “We have the no. 1 national newspaper on all three continents.”

2. Technology: We’re good at that, too. The Apple iPad, “which I believe will lead a revolution in content consumption.” First month, 64,000 active users for The Wall Street Journal iPad app. “Unlike the Kindle, we keep 100 percent of the subscriber revenue from the iPad.” Innovative subscription model coming to deliver content to people whenever they want it (paging Jon Miller, James Murdoch).

[Apologies, lost the thread here. But Rupert is gung-ho about TV and other core businesses]

Q&A

Is there concern that you can’t keep growth in the next fiscal year? Can you?

Murdoch: Absolutely! Hedges on numbers. “We have a great slate of films coming up, but we don’t have an ‘Avatar’ in there.” If ad growth keeps up, “I think we can be very confident.”

COO Chase Carey: I agree! The ad market is actually picking up. Sports has been a little slower than other ad markets, and they’re now picking up. “Looks great.”

Question for Devoe: Please talk more about that big cash pile.

Murdoch: I can answer that! “We’re well aware that our balance sheet…is inefficient at the moment.” Increased dividends, stock buy backs, investing in our businesses, possibility of “opportunistic investments,” which we’ve been “nervous” about doing in past year but now we have some things we’re looking at. Cue M&A klaxons!

More color on the TV biz, please.

Carey: Strong recovery in most categories. Not just auto and telecom. Financial, insurance, all sorts of stuff. “It’s pretty broad.”

Murdoch: “We’re seeing pretty optimistic and expanded advertising budgets from the big advertisers.” Not sure when that money is coming, but would guess Q2, when they’re launching new cars. “There’s a lot of money out there on the boards.” And as free over-the-air audiences shrink–and ours is shrinking less–that money is finding its way to cable. So any show that can show any sort of advertising can attract money. “It feels good; that’s all I’m saying.”

Please talk about new retrans/carriage negotiations.

Carey: Fox News deals starting to come up. Will be staggered over a couple of years. “I think the Fox News network…is certainly–maybe with ESPN–second to none.” So pay up, cable guys! (And customers!)

Carey mounts a long defense of Sky Italia. I’ll refrain from transcribing.

Similarly, you’re probably not interested to read what he has to say about satellite TV in Europe.

Netflix is killing it. What does that mean for you guys? Good news because it says good thing about your library? Or maybe an opportunity for you to do more with your library?

Carey: Noncommittal answer. But: “There is a question whether the Netflix model is getting us fair value for our product.” So we’ll keep looking at windowing content and whether we’re getting paid enough for our stuff. “I think it’s a focus.”

Please talk about Fox Audience Network plans and MySpace/Google plans.

Carey: Google plan doesn’t affect FAN. Not going to comment on “rumors.” “I don’t think that’s productive.” But! The key is to build enough traffic to attract enough dollars. FAN has a done a good job.

Let me try to re-ask the same question regarding restructuring or spinoff of FAN.

Murdoch: Praises MySpace. In the past few years “we made some big mistakes,” but we have fine new management now. “Early indications, and they’re only indications, are that we’re getting new visitors, and they’re staying longer,” so ad dollars will follow.

[Sorry missed this question, but I believe it is about guidance.] Murdoch is not talking up the film slate, but indicates that he’s spending a bunch of money on movies, and the company will take hits on those initially before they see dollars come back.

Carey: The film business fluctuates from quarter to quarter. But our team is great, and we have great movies coming. “We couldn’t be more excited and positive about the film business.”

Murdoch: Our movie investors praise us.

Any film properties you’re interested in?

Murdoch: “We’d look if something real came onto the market,” but we don’t put MGM in that category, at least not at the price it’s asking. We prefer to invest in our own stuff, and that goes for TV shows as well. “Glee” is a big hit and we own it. Same goes for “Modern Family.”

More info on digital, please. What about MySpace profitability? What happens when Google deal ends w/MySpace?

Carey: “Clearly, MySpace is a work in progress.” [This is a familiar refrain.] But promising signs. Talking up “Glee” tryouts. Improved the platform, etc. By the end of 2010, we want a foundation installed that we can go forward with, and we want to have a cash positive business going into 2011. “The trends are better but they’re not what they need to be….A number of the key metrics are not going up, but they’re better than what they were.”

Are you getting retrans fees for Fox broadcast now?

Not yet.

Why isn’t TV station top-line growth showing up on overall segment results?

Has to do with way we present results. [Confusing and confused discussion about bookkeeping ensues.]

[Still going!]

Press Q&A! (Usually much more entertaining)

Question about Australian news story about…mining?

Murdoch: “Nothing to do with media.”

Same guy has a question about Australian football (?). Rupert professes shock about whatever the scandal was.

Eighty-one advertisers bailed on Glenn Beck. Now it seems as if the only ads are in-house and for gold. When will you stop subsidizing the show and require it to carry its own weight?

Rupert says the 81 number is wrong and that Glenn Beck show doing great.

More color on that subscription model, please.

Rupert: Press conference coming in three-to-four weeks.

But: We’re getting about $4 a week for The Wall Street Journal… [voice trails off].

So this would be about entertainment as well?

Oh, you bet. Everyone’s been talking about negotiating with Apple.

[Both Rupert and FT's Ken Li seem confused. Me too.]

How much did you invest in Wall Street Journal New York edition?

Rupert. “Happy to tell you. We invested nothing.” Maybe $1 million in it. But ti already covers its costs. The notion that we’re spending $30 million on it is “BS.”

[Sorry, missed next two questions.]

Soon to-be Murdoch employee Claire Atkinson has questions about TV ads and online video ads.

Murdoch: WSJ.com is up 11 percent. $100 million in digital revenue at Dow Jones. At Fox news.com, “absolutely thriving.” [If he answered TV question, I didn't hear it, but I think he passed on that one.]

That’s all, folks.

Thanks, Jim Cameron! "Avatar" Gives News Corp. a Big Bump.

Peter Kafka — Tue, 04 May 2010 20:16:14 +0000

Wall Street was expecting big things from “Avatar”–this is what happens when you’re the biggest movie in history–and it delivered.

The film’s performance helped push News Corp.’s quarterly earnings above Wall Street’s expectations, generating revenue of $8.8 billion and earnings of 32 cents per share. Analysts had been looking for $8.23 billion and 22 cents, respectively.

Some of that lift came from Rupert Murdoch’s movie unit, which recorded the highest operating income in its history. But News Corp. (NWS), which owns this Web site, had a pretty good quarter all the way around. Even its newspaper properties, which have been a drag on the company for some time, are on the rebound, with The Wall Street Journal posting a 25 percent jump in ad revenue.

Per usual, there’s next to nothing in News Corp.’s documents to suggest that it’s in the Internet business in any way. The company does mention that its Digital Media Group–essentially, MySpace and a few other properties–saw operating losses increase “principally due to lower search and advertising revenue.” But it doesn’t offer more information.

I’m sure we’ll get into some details and perhaps updates on other News Corp. digital efforts, like fighting Google (GOOG) and building pay walls, during the company’s earnings call. Check out the liveblog here.

Rolling Stone's New Song: Money

Peter Kafka — Mon, 19 Apr 2010 12:55:36 +0000

Better late than never!

Rolling Stone magazine, which has more or less slept through the Web era, is finally waking up. A deal with RealNetworks (RNWK), which made the magazine money but left it far behind the competition, has expired, and a revamped site launches today. So does a new strategy: Pay to play.

You can still get access to some of the site’s stuff for free, but much of the magazine will be moved beyond a pay wall. Subscriptions will range from $3.95 for a one-month look to $44.95 for a two-year commitment.

In exchange, you get goodies like a print subscription and access to all the magazine’s back issues dating to 1967. Which is more or less what I wanted to see the company offer. So that’s nice.

I do wish that Rolling Stone rewarded its existing print subscribers as well by offering them discounted or free access to the site. But I’ll let Jann Wenner and company explain why they’re not going that route.

One thing that’s not popping up in the discussion of Rolling Stone’s digital do-over: Any mention of an iPad edition. Perhaps there’s one coming down the road, but I think the Apple (AAPL) omission is intentional. I imagine that Wenner, who is fundamentally a magazine guy, has no interest in sharing with Steve Jobs any digital dollars he does earn.

News Corp. Digital Exec Jeremy Philips Heads for the Exit

Peter Kafka — Wed, 31 Mar 2010 19:45:08 +0000

More change at News Corp.’s top ranks: Jeremy Philips, one of Rupert Murdoch’s top advisers, is heading out the door.

I’m told that Philips has a new job lined up and that he informed Murdoch of his plans in early January. But when I reached him this afternoon, he declined to comment. PaidContent first reported the move.

Philips is a behind-the-scenes guy (though very easy to find at New York media events) who weighed in on much of Murdoch’s digital mergers-and-acquisitions work, as well as big-picture strategy like pay walls, etc. I’d been told repeatedly that he had the ability to launch his own projects within News Corp., though if he did so, I was not aware of it. A recurring rumor mill item had him working on a fabled “LinkedIn-killer” for the company.

News Corp. folks want us to know that Philips was not forced out. But there’s definitely a changing of the guard at the company, occasioned by the ascension of Rupert’s son, James Murdoch.

News Corp. (NWS) owns Dow Jones, which owns this Web site.

Statement attributed to Murdoch:

Jeremy is a very talented executive and I value his strategic contributions to our digital initiatives over the past six years. I fully understand his desire to focus on new entrepreneurial ventures and I wish him all the best in this next step in what will continue to be an exceptional career.

Web Users Take Dim View of Paywalls, Ignore Ads, Study Confirms

Jennifer Valentino-DeVries — Mon, 15 Mar 2010 20:30:59 +0000

As news outlets struggle to find a revenue model online, a new study suggests how daunting it will be to persuade users to pay for content. Only 7 percent of Americans who get their news online say they have a favorite news source that they would continue to visit if that site put up a pay wall, according to an annual report on U.S. journalism from the Pew Research Center. The center, which describes the outlook for the online-news business as “grim,” also found that the vast majority of people–81 percent–don’t mind Web advertising. But they also don’t engage with it; almost as many said they never or hardly ever click on ads online.

Read the rest of this post on the original site

Is the Kindle Finally Ready for the Web?

Peter Kafka — Tue, 09 Mar 2010 13:35:24 +0000

If you own a Kindle, you also own a mobile Web browser. But chances are you never use it. That’s because it’s a lousy experience, and one Amazon does its best to keep away from users (hint: look in the gadget’s “experimental” menu).

But maybe Amazon is ready to rethink the Web.

Michael Calore notes a job opening at Lab126, Amazon’s consumer products unit that built the Kindle, for an engineer to help build “an innovative embedded web browser.”

It’s possible that Amazon (AMZN) is thinking about something other than the Kindle here. But a decent Web browser for the e-book reader is long overdue.

I understand why Amazon didn’t push the browser when it rolled out its first device in 2007–it had other priorities–but at this point, having a wireless device that only grudgingly accesses the Web makes no sense. And it certainly won’t fly once the Apple (AAPL) iPad ships next month.

That said, if Amazon does add a full-fledged browser to the Kindle, the ripple effects will be pretty significant.

I assume, for instance, that adding a real browser requires a conversation with AT&T (T), which is currently providing “free” wireless coverage for the device. The carrier’s coverage doesn’t tax its system very much right now, since Kindle users only really need to go online to download new books. But if they could actually use the Web, the equation changes.

And a real Web browser means publishers who are selling subscriptions to their titles via the Kindle will have to rethink that strategy, too.

I don’t get the point of paying $13.99 a month for a subscription to the New York Times (NYT) on a Kindle to begin with. But if you can get a decent version of the paper for free–and updated in real time–via the Web on the same machine, then there’s no point at all.

The Times is already working on a Web pay wall, of course. But adding a real browser to the Kindle may push other publishers to think even harder about walling off their stuff, too.

Ad Sales, Pay Walls, and Absolutely Nothing About iPads at the New York Times Earnings Call

Peter Kafka — Wed, 10 Feb 2010 16:01:05 +0000

The New York Times said things got better–or, if you like, no worse–during the last quarter of 2009. But investors are disappointed that the publisher isn’t more optimistic about 2010, and they’re pushing shares down this morning.

Let’s see if the paper’s executives can turn that around during their earnings call. We’ll also be looking for any updates the Times can provide on its pay wall plans, and, of course, its role in the launch of the Apple iPad.

UPDATE: As I noted below, though the New York Times (NYT) was a featured partner at the launch of Apple’s (AAPL) iPad, even sending a small team to Cupertino to create an app a few weeks before the event, there was zero discussion about iPads today.

CEO Janet Robinson made a generalized comment about the growth of the Times’s mobile distribution, but that was it. And not a single analyst showed any interest in this stuff–a good reminder that neither the Times nor Wall Street expects the iPad to be material to the company’s business for quite some time.

Liveblog

On the call: CEO Janet Robinson, CFO Jim Follo, Times Media Group boss Scott Heekin-Canedy, and Digital boss Martin Nisenholtz

In a preamble, CEO Robinson highlights cost-cutting, balance sheet repair, and asset sales (radio station, but not the Boston Globe; the company is still looking at selling its stake in the Boston Red Sox–the process is “complicated” and is “taking longer than anticipated”).

Robinson recaps the pay wall plan, metered approach, etc. Nothing new here so far.

The paper is waiting until 2011 to deploy the pay wall, she explains, because it wants to make “subscribing as smooth and easy as possible….It will take some time to build, deploy and test the best systems.”

Robinson offers a few revenue details, primarily a recap of the earnings release.

Ads by category: National ads down 12 percent, retail down 23 percent, classifieds down 27 percent.

News media online grew four percent, primarily from display advertising (the rest of online growth comes from About.com).

Print ad category decreases came from Hollywood, among others. Ad category increases: Print auto, health care, packaged goods.

Circulation revenue is up because of newsstand, price increases. The Times is benefiting from declines at other papers, because as local papers cut back, it is offering more info than ever. Robinson notes expansion by the paper into local news in the Chicago and San Francisco markets, adding that there are plans on going local in “several” other key markets

Time to brag about new mobile products and applications. The paper counted 75 million page views from mobile and apps in December, and the iPhone app has been downloaded three million times since launch.

Back to digital: Display ads are up, classifieds down; they improved “significantly” as Q4 progressed.

About.com is still the Times’s digital cash machine: Revenue is up 22 percent, and operating profit grew from $10 million to $18 million.

Overall, Internet businesses are up 10 percent and accounted for 15 percent of revenue for the quarter. Online advertising revenue accounted for 23 percent of ad revenue of the quarter.

“Limited” visibility for 2010, which is what’s upsetting The Street, supposedly. But the paper is still “realigning” its cost base.

CFO Jim Follo’s comments may not interest all readers except for this part: The Times is continuing to reduce headcount, he notes, which dropped by 18 percent in 2009. The company is also looking at the benefit structure for both employees and retirees. It froze that awesome supplemental retirement plan that pays certain retirees a very lucrative pension.

We’ve been benefiting from a drop in newsprint prices last couple years, Follo notes, though suppliers are trying to raise prices again, but there’s a supply glut, so we think they’ll have a tough time doing that.

No big capital spending projects are planned. [Presumably, the pay wall is not that expensive to build.]

[Aside: Interesting that NYT.com GM Denise Warren, who's normally on these calls, isn't on today's.]

Questions and Answers

Question: More color on advertising, please.

Scott Heekin-Canedy: We have some optimism, but advertisers are “guarded,” and ads are still bought–or retracted–at the last minute, as they were last year.

Tech, media, health care, and auto ad categories all look promising. The mix is “definitely different” from last year “when it seemed like every single category was down.” Now, many categories are showing “flat to significant growth.”

Question: Are you still optimistic that you can reach a deal on the Red Sox?

Robinson: “Yes we are.” Lots of due diligence, lots of different properties (stake in team, stadium, network, etc.).

Q: What are incremental costs of setting up a pay wall?

Robinson: “We feel this is an elegant solution,” but we want to wait the year and make sure we’re well prepared, etc. Again, integrating home delivery and digital is crucial.

Nisenholtz: Regarding cost, there will be a “modest operating cost” to deploy the tech. We’re hiring a “handful” of people to do that and deploying “modest” capital, but it’s not material.

[Apology: I missed a question on ad categories, though it seems to reprise the earlier question.]

Q: Can you give us a sense of additional cost-savings you can extract this year?

Follo: Nope.

Q: Will your headcount go down again in 2010?

Follo: Yes.

[Missed another question here.]

Next a question about the tax rate, which I can’t imagine anyone reading this cares about.

Q: Can you tell us more about January ad trends, i.e., how much is national vs. local?

Robinson: We won’t break that out (anymore).

Q: Was it materially better than Q4?

Robinson: She repeats her earlier comments from the release. “Very good performance” on the digital side of business. December was particularly good, but we’re not going to be more specific about January.

Heekin-Canedy: That said, we don’t think January is much of an indicator about the rest of the year, anyway. Different beast, not much connection between December [when people were dumping leftover dollars].

[There's a giant disconnect between analysts and the chattering classes here. If the latter ran the call, this would be about nothing but iPad, iPad, iPad. But we're 48 minutes in, and zilch so far. Which is a good reminder: No matter what launches with the tablet this year, this stuff isn't going to have a big impact on Big Media for quite some time.]

Q: Where is growth coming from at About.com?

Robinson: Both consumer packaged goods and display ads. We’ve upgraded the sales channel to go after display and that’s helped a lot.

Nisenholtz: Strong categories include CPC, travel, education and financial services. There’s also retail strength.

Q: Are CPGs new to About.com?

Nisenholtz: Yeah. Well, not exactly. It’s a big site, lots of reach. But we’ve updgraded the sales team and the increase there is part of the payoff. We reach a lot of moms. The Web site skews female.

Q: You may end up paying $60 million to $80 million back into the pension plan. When could that come? Q4?

Follo: Could be sooner than that. We’re in a good position regarding liquidity.

[The final question is about joint ventures that you don't care about.]

And that’s it for the call.

As Predicted, a Not-Terrible Quarter for the New York Times: Print Ads Shrink Less, and the Web Actually Grows

Peter Kafka — Wed, 10 Feb 2010 13:55:07 +0000

As predicted, a nice Q4 for the New York Times, at least by newspaper standards: Revenue shrank, but not as badly as in the past, and operating costs continued to come down.

The paper reported earnings of 44 cents per share (after factoring out one-time items) on revenue of $681 million; Wall Street was expecting earnings of 38 cents on revenue of $653.7 million.

Both official and unofficial word from inside the Times indicated that the paper had a not-terrible Q4. In December, the company had already told Wall Street that it expected to see print ads decline about 25 percent and Web advertising bounce back by 10 percent.

Today’s numbers were a little better than that: Print ads were down 20 percent, and digital ads were up 11 percent. Overall ad revenue was down 15 percent, while Internet revenue was up 10.3 percent.

In Q3, the paper saw ad revenue drop 26.9 percent, while Internet revenue dropped by 7.2 percent. Bear in mind that year-ago numbers were miserable, so improving on them is a tempered success.

Expect more of the same going forward, the paper said: “Looking ahead, visibility remains limited for advertising. In the first quarter of 2010, we expect the rate of decline for print advertising to continue to improve modestly from the fourth quarter of 2009, while digital advertising is expected to perform in line with the fourth-quarter level.”

Given that the New York Times (NYT) was already relatively optimistic about the quarter before it announced plans to erect a pay wall, it’s safe to assume that today’s results will have zero impact on that schedule.

But given that the paper hasn’t said a lot about those plans publicly, it will be worth listening to today’s earnings call to see if it offers more clarity. Plus, of course, the obligatory discussion about the Times’s plans for Apple’s (AAPL) iPad. I’ll be covering the call live at 11 am Eastern.

Maybe Newsday Made Its Pay Wall a Little Too Strong

Peter Kafka — Wed, 27 Jan 2010 01:16:27 +0000

That pay wall that Newsday put around its Web site last year? Crazily effective–at keeping people from buying an online subscription.

Last year, when executives from Cablevision (CVC) announced plans to turn their paper’s Web site into a pay-to-play proposition, I dreamed up a way it could work: Maybe Long Island residents who wanted to peruse the paper’s classifieds would pay up. Nope.

Since the wall went up three months ago, only 35 people–as in not quite three dozen–have paid the $5-a-week fee for Web access, the New York Observer reports.

The Observer’s John Koblin quotes a Cablevision PR person who says that the “modest” pickup isn’t a surprise, but that’s some very unconvincing spin. Putting up a pay wall isn’t cheap or easy: Why bother if it only generates an extra $9,000?

Here’s the full statement from Cablevision/Newsday:

Millions of Cablevision customers in the New York tri-state area and 75% of Long Island households, including all Newsday home delivery subscribers, now have exclusive access to newsday.com at no additional charge. Internal research shows that Newsday’s Web site is an extremely popular new benefit to hundreds of thousands of Long Island Cablevision households. Given the number of households in our market that have access to Newsday’s Web site as a result of other subscriptions, it is no surprise that a relatively modest number have chosen the pay option.

As PaidContent notes, Cablevision can also argue that the real idea behind the pay wall is that it’s supposed to make existing subscribers feel like they’re getting something of real value (advertisers too, supposedly). But it’s hard to argue that online access is a “value-add” if only 35 people value it.

It’s also hard to argue that Cablevision’s problems offer any clue about the prospects of the New York Times’s (NYT) coming pay wall. Because the Times is a different beast from any other paper in the country.

I would be interested, though, in learning how the Minneapolis-based Star Tribune did with “Access Vikings Premium,” a $20-a-year pay wall it put up around most stories about the home team last season.

I could see the thinking behind this one, which showed up around the same time Brett Favre joined the team. And this was the year to try it, since the Vikings had a great season until they blew the NFC Conference game, as is their wont.

But in my personal one-man focus group, the pay wall only served to keep me from visiting StarTribune.com at all. I see now that the paper seems to have dropped the wall around content it used to ask me to pay for, so perhaps I wasn’t the only one. I’ve asked the paper for more details.

UPDATE: Strib spokesman Ben Taylor gives me a no comment, which apparently has been the paper’s stance on this for many months. MinnPost’s David Brauer explains, while noting that three of the paper’s biggest traffic days have been spurred by Vikings news.

Does It Really Take a Year to Build a Pay Wall?

Peter Kafka — Wed, 20 Jan 2010 22:32:02 +0000

Is the pay wall plan for the New York Times too late? Will it generate too little? We won’t know for some time. Because the paper, which lost $35 million in the last quarter, says it won’t finish building the wall until 2011.

If that time frame puzzles you, you’re not alone. Plenty of pundits are wondering what kind of digital wall could possibly require a year’s worth of assembly. Can’t you just slap this stuff up pretty fast? It’s the Internet, after all.

New York Times (NYT) Chairman Arthur Sulzberger Jr. and CEO Janet Robinson, in their memo to employees, stress that the paper is moving with “appropriate care” in the next 12 months because “it will take time to get this right.”

Perhaps there are other reasons to move slowly. The duo’s memo, for instance, holds out the possibility that the paper might end up working with a partner. Steve Brill’s Journalism Online consortium, which is promising to create pay walls for a large number of papers, would be one option.

And last I heard, some News Corp. (NWS) officials were holding out hope that the Times could join its pay wall consortium. (News Corp. also owns this Web site.) If the Times does want to play well with others, moving slowly might make some sense while it waits for said others to catch up.

Meanwhile, some cynics (gasp!) have suggested that the Times announcement is merely a trial balloon. Though I have to confess I don’t see what that would accomplish.

But assuming the paper does go it alone and does intend to build this thing, would it really take a year? Yes, say two publishing sources with first-hand knowledge of both pay walls and big publishing companies.

The problem, in a nutshell, is that there are at least three different problems to solve: Authenticating current print subscribers so that they can get the online paper free; installing the “meter” that measures use for nonprint subscribers; and creating a commerce engine that can take orders, process subscriptions, figure out how to provide bundled offers–i.e., the cost of online access plus, say, a Kindle or Apple (AAPL) tablet subscription–etc.

None of this stuff ought to be rocket science, but that doesn’t mean it’s not hard, my pay wall experts say. Even if the Times builds its new pay wall on the bones of Times Select, the newspaper’s 2005-2007 attempt, it could easily take it a year to assemble this thing, they insist.

It’s possible that my sources are talking their book a bit–if building a pay wall were easy, there’d be less work for them. But I’m willing to take them at their word until someone convinces me otherwise.

The New York Times Officially Starts Construction on Its Pay Wall: "Metered Model" Coming 2011

Peter Kafka — Wed, 20 Jan 2010 14:39:05 +0000

After much consideration, the New York Times has finally decided to start charging readers for access to its Web site. But not for a while: The Times says it will introduce a “metered model”–which offers a certain number of free visits to NYT.com before requiring a payment–in 2011.

The publisher hasn’t said how much it will charge readers and isn’t offering many other details for now. But subscribers to the print edition will be able to access the site for free.

By adopting the “metered model,” the New York Times (NYT) is emulating the Financial Times, which lets readers peruse up to 10 stories a month before forcing them to buy a subscription to the online paper.

That model isn’t all that different from the subscription strategy employed by News Corp.’s (NWS) Wall Street Journal: While much of the Journal is theoretically behind a pay wall, it’s a fairly permeable one designed to give both casual readers and search engines access to the content. (News Corp.’s Dow Jones owns both the WSJ and this Web site).

Both are have-cake/eat-cake strategies: Generate as big an audience as possible to sell to advertisers while extracting a second revenue stream from hard-core readers. The Times, which is reportedly generating $100 million a year from Web display ads, wants to do the same thing.

The paper has tried a pay wall before. In 2005, it rolled out “Times Select” whereby it cordoned off access to op-ed columnists like Thomas Friedman and to archived stories and other features. That strategy generated around $10 million a year. But it was considered a failed experiment, and the Times dropped the wall in September 2007.

Now, of course, $10 million a year sounds like a nice boost for a paper that lost more than $35 million in its most recent quarter and saw print ad revenue plummet throughout the year.

A New York Magazine story published on Sunday predicted the timing of the announcement, even though New York Times executive editor Bill Keller told me the piece was “long on speculation.”

The New York Times Announces Plans for a Metered Model for NYTimes.com in 2011NEW YORK, Jan 20, 2010 (BUSINESS WIRE) — The New York Times announced today that it will be introducing a paid model for NYTimes.com at the beginning of 2011.
The new approach, referred to as the metered model, will offer users free access to a set number of articles per month and then charge users once they exceed that number. This will enable NYTimes.com to create a second revenue stream and preserve its robust advertising business. It will also provide the necessary flexibility to keep an appropriate ratio between free and paid content and stay connected to a search-driven Web.
Through 2010, NYTimes.com will be building a new online infrastructure designed to provide consumers with a frictionless experience across multiple platforms. Once the metered model is implemented, New York Times home delivery print subscribers will continue to have free access to NYTimes.com.
“Our new business model is designed to provide additional support for The New York Times’ extraordinary, professional journalism,” said Arthur Sulzberger, Jr., chairman of The New York Times Company and publisher of The New York Times. “Our audiences are very loyal and we believe that our readers will pay for our award-winning digital content and services.”
“This process of rethinking our business model has also been driven by our desire to achieve additional revenue diversity that will make us less susceptible to the inevitable economic cycles,” said Janet L. Robinson, president and CEO, The New York Times Company. “We were also guided by the fact that our news and information are being featured in an increasingly broad range of end-user devices and services, and our pricing plans and policies must reflect this vision.”
More details regarding the metered model will be available in the coming months.

[Image credit: etoile]

Who's Joining Steve Jobs for the Tablet Launch Next Week?

Peter Kafka — Tue, 19 Jan 2010 11:00:55 +0000

Now that Apple’s tablet debut date is officially, officially confirmed (old news for All Things Digital readers), we can move on to the next round of speculation. For instance: Which media partners will Steve Jobs be working with when this thing launches?

There are lots of media companies anticipating the tablet–the entire magazine industry, for instance–and Apple (AAPL) will eventually want all of them on board. The wondertablet is supposed to be a showcase for media, after all.

But very few media companies seem to have any kind of real information about the device. And only a small number will have new stuff to show off at next week’s unveiling.

Like who? Here’s a starter list of likely and unlikely suspects:

The New York Times is a good bet. Executive Editor Bill Keller riled up the Web with a passing reference to an “impending Apple slate” in October, but wouldn’t say more. Last week, I asked Keller again about his paper’s Apple plans, and he stayed mum again. So did Martin Nisenholtz, the paper’s digital boss. “No comment” doesn’t equal “we’re cooking something up,” of course. And I’m not convinced that an Apple demo would be directly tied to an announcement about a new pay wall strategy, as New York Magazine speculated Sunday. But I do expect to see something from the New York Times (NYT) at next week’s launch.
Don’t expect much from the big music labels. Jobs courted Big Music when he opened up the iTunes store in 2003. But label sources I talked to this month said the company had only recently begun briefing them about the tablet, primarily as a “courtesy.” Recall that Apple already has the labels on board with the “iTunes LP” format, which would lend itself quite nicely to a tablet. One label official told me Apple has expressed an interest in selling higher-quality audio files via iTunes, and I’m sure the labels would be happy to do so if they can charge a premium for them. But that discussion doesn’t seem to be tethered to the tablet.
Do expect to hear about “enhanced e-books.” In the past, Jobs has been dismissive about dedicated e-readers like the Kindle from Amazon (AMZN) and reading in general–“people don’t read anymore.” He has apparently changed his mind about the latter opinion: The Wall Street Journal confirmed earlier stories yesterday with a report that News Corp.’s (NWS) HarperCollins is negotiating to bring some of its titles to the platform. Presumably other publishers–all of which are eager for viable Kindle competitors–want in, too.
Video? Duh. But who? The most obvious suspect here for an initial launch would be Disney (DIS) and its affiliates. In part because Jobs is both the company’s largest individual shareholder and a board member. But also because Disney CEO Bob Iger has made a point of trying out new digital distribution strategies. Here’s a nonstretch: Disney’s ESPN is already negotiating with Microsoft (MSFT) to bring some of its programming and games to the Xbox 360. What about something similar for the tablet? UPDATE: ESPN won’t be announcing anything in conjunction with Apple next week, says someone who knows.
Time Inc. won’t be there, according to people familiar with Time Warner’s publishing unit. The same likely applies to rival Conde Nast.

A crucial point here is that if the tablet works with the iTunes store–and it should–it is most likely that all of the Apple’s existing iTunes media partners will automatically be on the new device from the start whether Jobs showcases them next week or not. That is: If you can buy “Cars” and watch it on your Mac, iPhone or iPod, then you should be able to watch it on your tablet, too.

But we’re in pre-Apple announcement mode now, and simply porting old media to a new device just won’t sate our needs! So consider this report a work in progress, and a speculative one at that. I’ll be updating if and when anything new comes to light.

Project Alesia: News Corp.'s Roman Battle Cry–Does That Cast Googlers as the Gauls? (Plus Video!)

Kara Swisher — Wed, 23 Dec 2009 19:23:02 +0000

While Internet companies such as Google use baked goods as names for their key strategic initiatives–recent ones related to its Android mobile operating system were called Donut and Eclair, for example–aggressive media giant News Corp. is definitely not going for sweetness in its unusual selection of a code name for its high-profile digital content effort.

That would be Project Alesia, a moniker that comes from a vicious siege from ancient times widely considered to be one of the more decisive battles in history.

And that is apparently what top News Corp. (NWS) execs think is the best way to describe their plans for stopping the decimation of premium content in the digital age and transforming their business to take advantage of new means of distribution, according to numerous sources BoomTown spoke to this week about the unusual name.

“It takes a lot of determination to succeed in what is one of the biggest challenges newspaper and all media has ever faced,” explained one source. “So, the real path to success will require ingenuity and staying on course over time…which was critical to that military victory.”

Interestingly, said several sources, the Project Alesia name was picked by James Murdoch, chairman and CEO of Europe and Asia for News Corp.

Widely considered the heir apparent to his father, News Corp. Chairman and CEO Rupert Murdoch, James Murdoch is apparently a dedicated reader and student of Roman history.

But it has actually been the elder Murdoch who has been cast as the obvious general so far, conducting a recent series of public verbal attacks on Internet targets, especially Google (GOOG).

He has accused the search giant of “stealing” content, for example, while other News Corp. execs have echoed his gibes in various high-profile forums.

But James Murdoch has been a key player behind the scenes in the digital strategy, several sources said, an effort that also includes News Corp. Chief Digital Officer Jon Miller and Dow Jones CEO Les Hinton.

(Full disclosure: News Corp. unit Dow Jones owns this site.)

Of this top group, it is James Murdoch–who has slowly been emerging as a more high-profile player, especially internationally–who found inspiration in the past.

To understand why, you’ll first need a short and truncated history lesson, which I culled from a variety of sources online and off:

Taking place in September 52 BC in what is now France, the Siege of Alesia (also referred to as the Battle of Alesia) pitted Rome’s famed leader, Julius Caesar, against the Gallic tribes under the unified command of Vercingétorix of Averni.

More important–besides being cited as one of the best uses of siege warfare and “circumvallation” (see more about this below)–the battle of Alesia is considered a turning point in the bitter wars conducted by the Roman Republic to tame the Gauls, who had finally united as a single force in opposition to the Roman invasion.

The hard-fought win–in a battle where the Roman army was outnumbered five-to-one, outside a hilltop fort in Alesia–is often credited with reinvigorating Rome’s power over Gaul. After the loss, Gaul became a province of the Roman empire and was pretty much subdued for the next 500 years.

Alesia is often cited as one of Caesar’s greatest military victories and the fallout from it later led to his ascension to ultimate power in Rome (which was soon followed by his infamous assassination).

That’s not the ultimate end News Corp. is envisioning, of course, sticking with Alesia’s main themes of “perseverance” and innovation, said several people with knowledge of the digital content efforts.

And, no surprise, in the digital battles between traditional media and interlopers from the Web, guess who has been cast as noble Caesar and who plays the role of marauding heathens?

You know, the ones who even cast their women and children out of the fort into the middle of the siege when food started to run out? That would apparently be the Googlers of Silicon Valley, although if it were them, the food would be organic!

Not all comparisons are the same, said a source. For example, consider circumvallation, which is essentially the building of a series of encircling fortified walls around the enemy. Contravallation is also also part of the strategy, to protect from attacks by enemy reinforcements attacking from the outside.

One could easily imagine that this means creating pay walls around premium content or de-indexing it from search sites like Google, both of which News Corp. has publicly talked about doing.

Not so!

“Traditional media companies are interested in investing in innovation too, so the idea of just putting up walls around content is a red herring,” said the source. “The idea is to find new ways of distributing media that also makes money, because why should journalism in [digital] ones and zeros be any different?”

Of course, with new stats showing sites like Google News and Yahoo (YHOO) News as the place consumers are going to get more and more of their news, that is a big issue in a longer fight, which will grind on for a very long time and well before any side can ever declare victory.

And here is a clip from a 2001 movie, “Vercingétorix,” about the Siege of Alesia, not made by News Corp.’s 20th Century Fox Hollywood studio, starring that actor dude from “Highlander” (aka my fave movie of all time). It does not end well for Google, oops, the Gauls:

[The 1899 painting at the top is by Lionel-Noël Royer.]

11.28.09 Weekend Update–Black Friday, Blue Saturday Edition

Drake Martinet — Sat, 28 Nov 2009 20:30:50 +0000

Everyone in the retail world was waiting with bated breath yesterday to find out if the current economic pinch would make consumers fight harder in the discount trenches or simply sound the retreat. Either way, the AllThingsD team was at its post this week bringing you tech and trends to keep you ahead of the pack.

Kara was sorely disappointed when she realized she wouldn’t need her yoga mat for her piece on Asana, which, as it turns out, isn’t a pose that helps you channel your chi, but rather, a high-profile start-up from two former Facebookers aimed at addressing the workplace collaboration and communications space. Benchmark Capital and Andreessen Horowitz together invested $9 million in an attempt to tip the karmic balance in Asana’s favor. Kara showed no fear in a post this week addressing head-on the what-ifs raised by our spicy chairman, Rupert Murdoch. Rupe has threatened to remove content from search giant Google (GOOG) and Kara decided to fill everyone in, from the inside out. AllThingsD went a little bit Hollywood late in the week and Kara reminded us all to set our TiVos to catch our very own Katie Boehret on “The Martha Stewart Show” where she was scheduled to showcase a few cool gadgets for the holidays.

Digital Daily wasn’t quite as Zen this week, covering a few of the scintillating conflicts that always seem to plague the holiday season. It was a case of bickering brothers and Psystar style early in the week as Apple readied the deathblow against the Mac clone retailer. Apple (AAPL) claims that Psystar computers that ship with Mac OS cut too close to home and must be eliminated. Apple may be sandblasting a soda cracker just a little here as Psystar has already filed for bankruptcy. John followed up with some thoughts on foreign policy. It seems that Senators John Kerry and Orrin Hatch put on their best Hawaiian shirts, black socks and leather-man sandals this week to play the obnoxious Americans intent on bossing around the European Commission. While there was no word on whether they made a fuss about not getting ketchup with their French fries, they did encourage the EC to hurry up and approve the pending Oracle (ORCL)-Sun (JAVA) deal. Sticking with the European vacation theme, John finished out the week with news that Apple and wireless carrier O2 would begin selling iPhones at Tesco supermarkets in the U.K. We assume that, like all things sold in British grocery stores, Tesco iPhones will also come with tikka masala and malt-vinegar options.

MediaMemo was back up to full speed this week, and while we don’t blame Peter for doing his civic duty last week, we’re glad he’s back on the job. He has been closely following the decline of advertising dollars that have been blamed for everything from the death of newspapers to Lou Dobbs “going rogue.” Peter reported that Yahoo upped the ante this week with a meta-advertising campaign targeted at, yep, ad executives. That’s one way to drum up business, or so believes the team at the new Yahoo (YHOO). In another startling revelation about media consumption, the Olswang media law firm reported that iPhone consumers tend to be willing to pay for some content. Peter echoed the same, reporting some purchases of his own. In yet another story about a potential grab for media dollars, Peter reported that Hulu, the online television giant, grew in both content and viewership. Peter reminded us that viewers everywhere are holding their breath for when the juggernaut throws up that pay wall.

Katie held down the Mossberg fort this week and did so even while simultaneously appearing on TV. Quite a feat, but lady geeks have special two-places-at-once powers. Back underground at Mossberg HQ, she reviewed Clicker, a Web site aiming to be the place to find any TV program you might want to watch. The service will point you to wherever a particular episode may live in electronically viewable format and does so without cluttering results with the Web’s video jetsam. She praised the service on the whole, but warned that it’s not a magic bullet. If you are directed to a site that features a pesky proprietary media player, you will still have to make the download. She said that the user account on the site will even let you use it like an online TiVo (TIVO), alerting you when shows have posted and building you a playlist.

Please take care while nursing your Post Retail Stress Disorder this weekend, and take solace that while you may never fully use that knee again, you did get your four-dollar toaster. Tune in next week: Weekend Update will bring you the all-meat, no filler account of the week’s events at AllThingsD.

What's Really Behind the Rupe-a-Dope With Google and Microsoft? Here Are Five Possibilities!

Kara Swisher — Wed, 25 Nov 2009 00:34:29 +0000

Please see this disclosure related to me and Google.

There certainly is a lot of noisy swirl of late around the escalating fight between Google and some traditional media companies over content online.

The loudest voice in this fight has clearly been News Corp. (NWS) kingpin Rupert Murdoch, who seemingly has not met a television interviewer of late he did not regale with tales of Google’s nefariousness.

Part of what he is saying is surely justified–it’s definitely a crisis for the news business.

And in Murdoch’s mind, the blame should largely fall on Google (GOOG), which he believes is profiting from expensive content others have created and that the search giant is not paying for to such a warped and massive degree that it makes a mockery of fair use.

In Silicon Valley style, Google defends itself by saying it sends valuable Web traffic to News Corp. and other sites, so perhaps a hand-written thank-you note is really the proper response.

That missive is definitely not in the mail from Murdoch, who instead has sent a series of poison-pen letters to Google.

Most notable is that he has threatened to “de-index” at least some of his content assets–which are not insubstantial–from the now-inevitable crawlers sent out by the search giant.

These are, of course, vintage tactics from the Global Media Mogul Playbook: Causing a public hubbub and spooking perceived enemies by threatening drastic action and implying dire consequences, while simultaneously dealmaking behind the scenes.

Trying mightily to make the stakes more dramatic, News Corp. has pulled Microsoft (MSFT) into the fray as a possible white knight–if you live long enough, you do see it all–for publishers.

Under this scenario, the software giant would fork over some sum of money to get News Corp. and perhaps other key content companies, such as Associated Press, exclusively and prominently featured on its Bing search site.

The reward, presumably, would be increased searching on Bing for the stuff consumers could now not find on Google.

BoomTown reported earlier this week that, in fact, Microsoft was unlikely to hand over any kind of king’s ransom to publishers.

As I wrote:

While a spate of reports has Microsoft execs girding the globe offering gobs of cash to content companies to block Google and favor its Bing search service, sources close to the situation caution that it is extremely unlikely that the software giant would pay giant sums for that pricey privilege, which many inside the company think will not help it gain much search share.

“While there is a lot of mutual interest, it’s doubtful Microsoft is going to pay to ‘rent’ a corpus of content that it does not own,” said one source close to the situation. “The economics are not there for anyone.”

In other words, this wrestling match is not about whether Google or Microsoft will serve up links to content online, but about how much–or not at all–they are willing to pay for doing so.

So, what’s really happening here? Here are five possibilities to consider, each of which is true in part:

1. Murdoch really means it.

In this scenario, Murdoch and others, like AP’s Tom Curley, truly believe that Google–like that creepy salt-seeking alien from “Star Trek”–is sucking the life out of the media industry by making bank from its news content, but not giving back nearly enough in return.

Of course, a lot of these companies have willingly done distribution deals with Google over the years.

But now they don’t like it because the increasing money being made by Google, even as their revenue has suffered, has developed into a growing problem.

Which is simply this: There is a lot more money to be made in searching for content than in making content.

This realization has to shake content czars like Murdoch to the core, but it is indeed the situation they find themselves in.

Murdoch makes a fair point in that journalism costs money to make and it used to have a solid economic system under it until Google and others on the Web disaggregated it wholly.

Thus, online aggregators become “tapeworms,” as The Wall Street Journal Managing Editor Robert Thomson quipped.

Thomson also, on a recent panel at the Web 2.0 conference, said to Google’s front page head, Marissa Mayer, that she “unintentionally encourages promiscuity.”

Ouch. That remark, which was was quite striking if you were there to hear Thomson say it, said volumes more.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

2. Murdoch really means to create a lot of confusion, in order to shake down Google.

Well, it would not be the first time Murdoch and many others of his ilk have used public sharp elbows and saber-rattling to get what they want.

Except in this case, the algorithm experts over at Google know precisely–down to the tenth decimal–how much linking to News Corp. makes for them.

And it is not much, especially when looking at the vast sea of data Google serves up.

Its money-making is widely dissipated, from searches for vacation information to mapping to car-buying to health. While news-finding definitely is part of the mix, it is not at the center of the Borg.

Ironically–and oddly left out of this debate–it is Yahoo (YHOO) that has a lot of power in this arena, with massive content sites that shoot traffic all over the Web (including to this site).

But, what Google cannot and never can quantify–although I have seen co-founder Larry Page try once or twice–is the impact of public perception on the company, which has slowly morphed from being a benign, brightly-colored digital, librarian-like helper to a scary, answer-to-no-one, evil-doing monster.

The company’s growing influence over what people see and do not see on the Web is palpably frightening to publishers, advertisers and anyone who wants to be digitally discovered.

Bad luck for Google: Creating and then attacking bogeymen is a Murdoch talent, bar none.

3. Murdoch really means to create a lot of confusion, in order to shake down Microsoft.

Also obvious is the full-scale obsession Microsoft has with Google. While the software giant’s execs try to hide it, their panic over the success of Google has been tough on the once dominant tech company, which has struggled in the Internet arena.

Worse still, Google rakes in the dough, while Microsoft, um, does not.

Finally, this year, Microsoft has created–with no small amount of much needed innovation–Bing, a laudable effort that is starting to show some traction.

While Bing still has a very small market share compared with Google–by a factor of seven to one–it definitely has some momentum.

And, after much turmoil, Microsoft finally did a deft and relatively inexpensive deal to join with Yahoo in a search and advertising partnership to give them both more heft, which will surely help matters.

More important, one of the ways Bing has differentiated itself is via product innovations and intense focus on search niches, such as health.

In this topic area, for example, Bing has struck a not-expensive content licensing arrangement with the Mayo Clinic in order to better feature content.

This is smart business and offers consumers something better and different.

But overpaying big media publishers for the same thing, even if they de-indexed Google at the same time, is not smart, unless it is for really niche things like special financial information.

And even then, there are so many other sources of information out there, it would not take Google long to mount a similar offering, even in the face of some kind of OPEC of News consortium.

Even more–how much do consumers love OPECs of any kind? Not much!

Sources at Microsoft agree:

“If it was everyone, that might become interesting. But even that has issues, since Microsoft is not interested in having exclusive news for a temporary period of time by overpaying for it. It’s essentially a marketing expense, and there are a lot better ways to spend that money to win market share than giving it to publishers.”

Finally, Microsoft has been to the Murdoch party before too, having been part of talks to fold News Corp.-owned social networking site MySpace into Yahoo, had Microsoft prevailed in its attempt to acquire it.

Microsoft missed that pricey bullet and might be more inclined to grow Bing the old-fashioned way–via innovation, marketing and product improvements–rather than just using up too much of its energy trying to mess with Google.

4. A deal will be made.

My not-too-surprising prediction is that in the end, News Corp. and others will probably strike some kind of lesser deal with Microsoft–although it will tout the heck out of it–while taking some of its content behind a pay wall and thereby de-indexing it from Google.

More damaging would be if AP, which actually provides the most used news content online, removes its links completely from Google, because–unlike the premium content from other publishers–this is the bread and butter of consumer usage of content.

As to promotional material or links to television shows and movies from publishers like News Corp.? Well, it would seem the most self-destructive form of pique to remove those links from any of the top search engines.

That said, even if it really pissed me off for publishers to do so, I would probably switch to another search engine to find information on “Glee” if forced to. That’s how much I love those singing kids and Jane Lynch!

Finally, Murdoch has also threatened to challenge the fair use doctrine–which allows others to use copyrighted content within limits, as Google and many others do (such as this site).

While some think that is a bridge too far, it might be Murdoch’s best argument of all. Why should Google make a fortune on the content of others, even if only listing it? Doesn’t the sheer volume of what the search giant vacuums up make its reliance on fair use as a defense pretty ridiculous?

You can be sure Murdoch has his many lawyers and lobbyists all over this one, as does Google.

5. The truth is out there.

In perhaps his most strident television interview, with his Sky News Australia service (which you can see below–oh, the irony–on Google’s YouTube), Murdoch said about those who use Google to find News Corp. content:

“They don’t suddenly become loyal readers of our content. We’d rather have fewer people coming to our Web site but paying.”

That really is the honest truth in all this hubbub: Murdoch and other publishers have to find a way to get a some pool of dedicated online readers to pay enough to be able to then provide them with content that will keep them coming back for more.

That’s a business that Google truly cannot help or hinder, really.

And more to the point, it is also a business that Rupert Murdoch does seem to know a thing or two about.

How Much Will You Have to Pay for Hulu? Nothing. How Much Will You Pay for "Hulu Plus"? Good Question.

Peter Kafka — Fri, 23 Oct 2009 17:31:24 +0000

Is Hulu putting up a pay wall around its Web TV site? Nope.

Does Hulu want to charge people to watch Web TV? Yes.

Confused? Don’t be.

It’s pretty straightforward: Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC, doesn’t plan on charging people to watch the stuff it’s currently airing on the site–a mix of first-run shows from broadcast TV, a limited number of cable TV shows and a smattering of movies. But Hulu is trying to figure out how to create some kind of premium offering where you’ll pay for stuff that isn’t on the site right now.

That’s what Hulu’s backers have been saying for months, so it’s a little puzzling that News Corp. COO Chase Carey’s comments got folks worked up yesterday. Meanwhile, multiple sources familiar with Hulu’s plans tell me that…Hulu doesn’t actually have a plan yet, but it is trying to piece one together.

There are some pretty obvious ways to go here. Hulu could sell movies or TV shows on a pay-per-view basis, or it could sell subscriptions to shows it doesn’t offer now or to a deeper offering of shows it already has. You could call it “Hulu Plus” (no charge for that one, guys).

If you’re a fan of Fox’s “Family Guy,” for instance, Hulu is only of limited help: The site only has the most recent five episodes. So how much would you pay to watch the rest of them?

If you don’t have an answer for that, don’t worry–Team Hulu doesn’t know, either. Nor can they tell you if airing free shows on Hulu has cut into other revenue streams like broadcast TV advertising or DVD sales, even though “we’ve done a thousand regression analyses on this,” says an industry executive involved in the site.

Do bear in mind that this was a problem Hulu’s backers didn’t really envision when they were dreaming up the site; at the time, they were most concerned with building a video site that would allow them to barter with Google (GOOG) and Apple (AAPL).

Now they own one of the biggest video sites on the Web, one they say is performing ahead of plan. And Hulu is selling enough advertising that it’s coming close to reaching break-even, according to executives I spoke to this week.

But at the very least, adding a pay component to Hulu helps mollify those who fear the site is cannibalizing their existing businesses. Or who simply want another revenue stream. And a pay element dovetails with Hulu’s interest in joining up with the “authentication” movement pushed by cable guys like Comcast (CMCSA) and Time Warner (TWX).

Meanwhile, here’s the use case for Hulu that its backers originally envisioned–“catch up viewing.” I was on a plane when last night’s episode of the “The Office” aired, but I can watch the whole thing–with ads I can’t skip–on my laptop today. And so can you: