Rupert Murdoch: A wealthy Don Quixote tilting at virtual windmills (or redeemer of the MSM)?

Young Mr Murdoch has been at the we need to make money of these here interwebby things line for a while now. As Brian noted back in early August, Rupert’s out on his own at the moment. So junior’s been blaming the BBC (oh, and ‘the Da’ wants to sue them (says he)… But Jack Shafer reckons when Rupert’s talking, that’s all it is. Talk:

If it were in News Corp.’s economic interests to dig an Internet moat around its newspaper properties, Murdoch would have already done it rather than talk about it. Instead, he’s shouting about it to signal to his competitors 1) where he’d like to take News Corp. and 2) his desperate desire for them to follow. And they must follow, because if they don’t, the genocidal tyrant’s general-interest newspapers—the Australian, the Times, the New York Post, the Sun, News of the World, and others—will be doomed to irrelevance.

The best pay-wall candidate in the Murdoch portfolio is the Wall Street Journal, which already charges for access while allowing nonpaying visitors to view some of its content. (Wired Editor-in-Chief Chris Anderson calls this model “freemium.”) If Murdoch were to raise the Journal’s pay wall all the way to the heavens to block Google and Google News completely, it could lose 25 percent of its traffic, Bill Tancer of Experian Hitwise writes this week, and the move “could isolate the Journal from potential new online subscribers.”

And here’s a top tip for Murdoch watchers:

When Rupert Murdoch speaks, he’s either lying or filibustering. The only sensible time to listen for him is when he’s running silent.

Mr Murdoch has had a few false starts in trying to make the net pay… But what the big media groups have is deep pockets and critical mass… Murdoch knows this attempt is doomed if the others don’t go along with his latest cunning plan… But the others too, with their huge cost bases and sunk investments, need to find some way of squeezing money juice out of the ‘net.

Caucusing the UK’s MSM giants might work if everyone jumped at the same time and if they had a viable model to jump towards. As it is that does not exist (at least for the net giants). When I suggested on Twitter last night that micropayments might be the way forward, Simon McGarr sent me a link back to this 2003 article from Clay Shirky.

…micropayment believers imagine that such tiny amounts of money can be extracted from the user that they will not notice, while the overall volume will cause these payments to add up to something significant for the recipient. But of course the users do notice, because they are being asked to buy something. Mental transaction costs create a minimum level of inconvenience that cannot be removed simply by lowering the dollar cost of goods.

Worse, beneath a certain threshold, mental transaction costs actually rise, a phenomenon is especially significant for information goods. It’s easy to think a newspaper is worth a dollar, but is each article worth half a penny? Is each word worth a thousandth of a penny? A newspaper, exposed to the logic of micropayments, becomes impossible to value.

For now, Murdoch may look an ageing Quixote tilting at virtual windmills (but he’s throwing more money at the problem than anyone else on Fleet Street). If one of the big papers cracks it, the others will follow down the same monetising alley, tout suite. Unless, of course, the ubiquitous blog/webcast/wiki has already taken over the free publishing world…

In which case, he always has that nice commercial satellite monopoly in the UK to fall back on…

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