How Wrong Is Rupert Murdoch To Think Old Media + Pay Wall = The Answer? Very.

Rupert Murdoch in a speech he gave in China entitled The All-You-Can-Consume-For-Free Internet Era Is Over recently said a lot of “not-very-nice” things about the Internet and Internet related companies that I fervently disagree with. Here the most relevant excerpts (my BOLD highlights):

There are many readers who believe that they are paying for content when they sign up with an internet service provider, presuming that they have bought a ticket to a content buffet. That misconception thrived on the silence of inarticulate institutions which were unable to challenge the fallacies and humbug of the e-establishment.

The value of content has been volatile in the past decade but we are entering another decisive phase in which device makers are again courting the creators of content. I have sensed that shift in recent days during my travels in Japan and South Korea where I met some of the world’s leading electronics manufacturers. These companies don’t want their customers to be served a diet of digital dross, and yet that will be the inevitable consequence if the worth of content and creativity are not appreciated.

The Philistine phase of the digital age is almost over. The aggregators and the plagiarists will soon have to pay a price for the co-opting of our content. But if we do not take advantage of the current movement toward paid-for content, it will be the content creators, the people in this hall, who will pay the ultimate price and the content kleptomaniacs will triumph.

I believe that Murdoch couldn’t be more wrong in his assessment that he (and the rest of the Old Media guard like CNN, etc.) really can take large portions of the Web back to a for-pay basis.

There are so many things he doesn’t get about the current reality that I’ll likely miss a ton. But a few of the highlights should suffice to make my point:

1) He doesn’t get that 90% plus of the content his minions are producing is so fungible that the half-life is less than 24 hours. That’s why it’s called “old news”. The aggregators et al. are giving that content a few extra days’ or even weeks’ worth of an additional lease on life.

Add to that that he doesn’t understand the SEO (search engine optimization) benefits his content receives via “the copiers” (as long as they link back appropriately), which in turn gives more visibility and findability to his content. No links, no “Google juice”. Sorry.

(Rupert’s Wall Street Journal is tacitly acknowledging this too by the way, as it is secretly still placing all of its “for pay” articles into Google FOR FREE!)

“…will soon have to pay a price for the co-opting of our content.” You can hear how proud good old Rupert is of “his” content, too bad that most of the rest of the world doesn’t really care anymore. There is so much content, there is NO scarcity of it. Zero. None.

If anything, there is far too much content, and lack of intelligent ways to filter it, or to connect the most relevant dots. Oh, and by the way, recent traffic stats show that Twitter, the epicenter of open, no-walls, rapid-fire, “self-liquidating” communication is beginning to move past!

2) The internet has created vast ARMIES of people with sufficient expertise that they can write with depth about any topic or news event imaginable. And they are perfectly willing to do so FOR FREE, simply for the chance at recognition, for directing a slice of the attention pie back towards their own personas/personal brands, businesses, products, or services.

If we again take the example of the Journal, there is now a sufficient number of financial news blogs serving up their own news, analysis, and key (linked) excerpts from the in-depth reports of various industry analysts and researchers, etc. (yet more people willing to put their stuff out there for free), that there really is very little need for anything the WSJ may report or opine on. It’s already all taken care of by someone else.

(Examples include: etc. etc. Notice how you won’t hear these blogs crying about how they would like a Pay-Wall…)

The only reason why the Journal has any value left is the strong brand that has been built up over many decades. The brand that has engraved “WSJ = Serious Business News” on the minds of millions of people.

But that doesn’t mean that there is much “there” there. Just go over to and look at each front page article headline for a moment. Spot the ones that are currently denoted as “paid subscribers only” via the little grey key symbol, and ask yourself if you feel compelled to purchase a subscription for any of these. (Recent consumer surveys show that the answer is pretty universally “No” for nearly all basic, yet for-pay content.)

3) The real issue remains that Murdoch and the rest of the Old Media moguls have yet to figure out how to properly monetize the attention they are already getting for their various content ventures in order to cover their staggering overheads and still turn a profit.

I have written previously about how they could turn the attention into profit more intelligently:

“Is Advertising Failing On The Internet?”

which you should by all means read if you haven’t yet. (In a nutshell, the answer is more intelligent ad targeting and/or sales funnels.)

But apparently they steadfastly want to cling to the past. Newsflash: the “good old days” of near complete Old Media control are NEVER coming back. Everyone with either an internet connection or an internet enabled cell phone is now a potential content producer. In some cases even an on-the-scene reporter…

The protection of the Pay-Wall is a complete pipe dream, and not a particularly good one, because, as we can see from Murdoch’s statements above, he is still way too proud of his content, and the only ones on board with his ill-conceived schemes to take back more control are OTHER (similarly misguided) companies. But the power now lies with the consumer.

In an Attention Economy you first have to convince people why anyone should give a dear about what you have to say. And a Pay-Wall will only assure that your content is likely never seen by millions who might have otherwise paid attention to you.

Only AFTER you have garnered the attention can you then proceed to make additional offers for more. More of the same kind or LOGICALLY related content, with more depth, more value, more exclusivity, that you might then convince someone to pay for. It’s called the back-end.

Don’t try to do it by putting your FRONT-END, lower value news stories and so-so quality op-eds behind a barrier where they will not do the lead generation job that your front-end is supposed to do!

For all of his biblical and otherwise ornery bluster, good old Rupert just cannot tell his front-end from his back-end.

[In this he could get together with fellow mogul Sumner Redstone of Viacom:

YouTube vs. Viacom: Should YouTube be torn apart by piranhas?

Oddly enough, back when this post was written, Murdoch still seemed to take a somewhat more enlightened view – see quote.]

If you erect an ill-conceived Pay-Wall, there will always be dozens, if not hundreds or even thousands of enterprising companies willing to bet that their method of monetizing a free front-end can win. And they will end up with what previously used to be your piece of the attention pie.

Always remember what John Gilmore of GPL/Open-source fame once observed: “The Internet perceives censorship as damage and routes around it.” A Pay-Wall is not all that far removed from censorship, especially when it comes to the news side of the equation. But even in a more economic sense, the Internet will likely rout around it.

Why You Absolutely Must Get Twitter’s Unique Selling Proposition (USP)

I have mentioned social media sensation Twitter, originally billed as a so-called "micro-blogging" service, in a number of posts over the last year, and by now there is almost no way that you haven’t heard one of its seemingly nightly mentions in the mainstream media.

If you’re not on Twitter yet, you should be, if only to see what’s going on, and to grab any usernames (for your own name, your company, and your products/brands) that may still be available before someone else does.

(If you are completely new to Twitter, first watch this brief video, and click though this presentation slide deck.)

Even if you decide that you don’t have the time to invest in maintaining an active profile on Twitter, you should at an absolute minimum understand that the new "real-time Web" that is emerging due to Twitter’s popularity is changing the game in many ways:

Not only is it causing redesign changes and opening-up at Twitter’s rival social media services such as FriendFeed and Facebook. Search of Twitter’s massive real-time stream of "Tweets" (the micro-messages that users send to their follower lists), is now being called "the pulse of this society" by wine merchant turned Social Media guru Gary Vaynerchuck. And I would agree:

Should you know what 10 14 Million people (yes, it grew by nearly 50% in the last month), many of them sought-after influencers and early-adopters are saying about you, your company, your brands, your products, your market, and your business’ target keywords on Twitter?

Of course you should. Twitter’s recent geometric growth proves that it is finding itself right at the inflection point from early to mainstream adoption in these last few months. And therefore searching at has become an absolute goldmine of marketing relevant information, one that must almost be considered indispensable at this point:

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Is Advertising Failing On The Internet? today featured a guest post by Eric Clemons, Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania entitled “Why Advertising Is Failing On The Internet”.

In the lengthy post he argues his “basic premise […] that the internet is not replacing advertising but shattering it”, which due to its sweeping nature definitely warrants further examination. The post as of right now has generated well over 200 comments, on a Sunday, so it obviously hit a nerve.

Among other things, Professor Clemons makes the following points about advertising both online or via traditional broadcast media:

Consumers do not trust advertising. Dan Ariely has demonstrated that messages attributed to a commercial source have much lower credibility and much lower impact on the perception of product quality than the same message attributed to a rating service. Forrester Research has completed studies that show that advertising and company sponsored blogs are the least-trusted source of information on products and services, while recommendations from friends and online reviews from customers are the highest.

Consumers do not want to view advertising. Think of watching network TV news and remember that the commercials on all the major networks are as closely synchronized as possible.  Why?  If network executives believed we all wanted to see the ads they would be staggered, so that users could channel surf to view the ads; ads are synchronized so that users cannot channel surf to avoid the ads.

And mostly consumers do not need advertising. My own research suggests that consumers behave as if they get much of their information about product offerings from the internet, through independent professional rating sites like or community content rating services like or TripAdvisor.

While I would agree with all three points made, and would count them among important caveats for anyone choosing to advertise for anything in this day and age, I disagree with Professor Clemons’ basic premise. Here’s why:

I would argue that none of the major “Old Media” players online (or for that matter none of the “New Media” either) are anywhere close to having efficiently monetized their page views. Everyone is still clumsily fumbling around when it comes to intelligent targeting of ads, both as to offer theme, as well as to offer pricing.

(Or rather mostly lack thereof, as when trying to employ Madison Avenue “image advertising” without any clear offer being made. Which, if it ever worked on TV, etc., certainly isn’t working online. In fact, online it may increasingly create a negative image of a company/brand/product as “someone” who just doesn’t get it).

This is astonishing, when all it really takes is some common sense about selling people stuff that makes sense in the CONTEXT of what they were already doing.

First, let’s get clear on the fact that an article or opinion piece in e.g. the New York Times provides a lot more pointers as to readers’ state of mind/interest than most Google queries ever could (as do Web videos posted on such sites), so the failure to target properly is in part simply a form of laziness.

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