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Murdoch's plan to make readers pay needs work

JUST over twenty years ago, Rupert Murdoch changed the face of the British newspaper industry. He smashed the all-powerful print unions, enabling him to cut costs and produce multi-section newspapers that were profitable. There was lots of hand wringing at other newspaper groups, but everyone on Fleet Street followed. <br /><br />Now that the newspaper industry is in ill health again &ndash; with rapidly falling audiences and revenues &ndash; he&rsquo;s hoping to perform another transformational act, by charging for access to all of News International&rsquo;s online content. <br /><br />The Times will be the first to erect a pay wall, with plans to start charging users for access in the spring. The Sun, News of the World and Sunday Times will join in before the end of next year. <br /><br />According to the Times&rsquo; editor, James Harding, the paper will charge users around 90p for a 24-hour pass to Times Online, the same amount it costs to buy a printed edition. There will also be the option to sign up for a yearly subscription, which will offer a cheaper deal for readers that visit the site on a daily basis. <br /><br />This business model isn&rsquo;t much different from that behind the printed edition of the Times, and it&rsquo;s one which isn&rsquo;t serving the paper particularly well at the moment. It shows that Murdoch would much rather try to build a loyal, paying audience of some 500,000 than have 20m visitors a month. As well as generating revenues from the pay wall, he&rsquo;s hoping that advertisers will value a small but committed audience.<br /><br />There are massive problems with the plans as they stand, however. Firstly, 90p for a 24-hour pass is far too much. Customers are not stupid: they know that the cost of distributing content online is far less than printing a physical paper. And while the price of newsprint, fuel for the vans, wages for the staff that transport and sell the paper and so on is rising &ndash; the cost of bandwidth and storage is constantly falling. The price of a 24-hour pass needs to reflect this. <br /><br />By building a pay wall around all of the content on Times Online, Murdoch is also being too dogmatic. It is wrong to write off the entire free online news project as a silly mistake; free websites have proven remarkably good at building huge, massively-engaged audiences.<br /><br />At any rate, it seems pointless to charge for content that, for the most part, will be available for free elsewhere. Even if the rest of the newspaper industry does follow, and early noises suggest they won&rsquo;t, there will always be certain outlets that don&rsquo;t charge for access, such as the BBC&rsquo;s incredibly well-resourced news site. <br /><br />Murdoch is right that the newspaper business is seriously sick, as he was in the 1980s. But as it stands, his radical cure won&rsquo;t work this time round. <br />