Rusbridger vs Murdoch: Clash of the Titans

Adwaith Prabhakar August 11, 2011

Image credit: Fried Dough@Flickr


The Great Schism

We are seeing a schism in journalism, the fourth estate is moving to a landscape where the future of news will be determined. For the time being, the fault lines are not clear enough to segregate the parties. The old school is led by the once-omnipotent Rupert Murdoch, and the rival gang is evolving in Guardian.co.uk. In a conventional war, The Guardian doesn’t hold any chance against Murdoch’s wall. Rupert Murdoch’s News Corp is omnipresent and plays a major role in formatting the public opinion across the globe. In US, Fox news and Wall Street Journal are the major engines of the right wing movement. In UK, the Murdoch tabloid The Sun is often credited for creating victors in elections (some may rephrase it as “identifying victors”). In contrast The Guardian is a paper which is losing money and is run by a non-profit organisation - Scott Trust. What made this battle interesting is the landscape and the fact that there is nothing conventional about it. The News War will be fought in and on the World Wide Web, which even after being 20 years old is by and large an unknown territory.

The Generals

It’s hard to imagine Alan Rusbridger as some kind of general, his Harry-Potter-looks hide the influence he has in the content market. He has been the editor of The Guardian since 1985. Under his leadership The Guardian launched Guardian.co.uk and the print version got redesigned into the European Berliner format. The Goliath empire of Murdoch owns major influence in print and media across the world. Apart from the “crouching tiger wife”, he has to his strength, News Corp (which is the world’s second largest media conglomerate behind Walt Disney co). News Corp serves its worldwide audiences through its print and media outlets like The Times of London, The Sun, The Australian, New York Post, Dow Jones & company, BskyB, Sky TV, Fox Broadcasting company and many others. Alan Rusbridger in comparison owns just a Berliner sheet and a cool website.

The 1% Problem

This is not an excuse, but maybe it's an explanation, The News of the World is one percent of the company.

Rupert Murdoch Rupert Murdoch/Image Credit: Flickr@ World Economic Forum

The above quote came in a hearing conducted by the Committee of British Parliament investigating the News of the World (NOTW) scandal. Rupert Murdoch has fought many battles in his life and even his political philosophy traces its origin to a war. The Australian tried to spin his way out of the issue, but the world media instead focused on another line he said, “Today is the most humble day of my life.” It was “The Guardian” under Rusbridger who brought the great media baron on his knees. NOTW paid private investigators who illegally hacked into the mobile phone messages of many public ­figures, including MPs , sports personalities, and actors. What followed was a thriller in which the protagonists include police officers, journalists and an actor (who bugged the bugger). NOTW in its attempt to cover up the phone hacking issue tried to make a secret deal worth $1 million. The Guardian’s Nick Davies unearthed the case and the greatest battle Fleet Street has ever seen ensued. The Guardian devoid of any friends in London, tried to bring NY Times into the foray. By this time The Guardian has evolved into a veteran David who has fought many Goliaths. It has published Afghan war logs, the Iraq war logs, and The Embassy cables which it obtained from Wikileaks. The Wikileaks affair helped The Guardian to make relationships with major newspapers across the globe, like NY Times, Der Spiegel, Le Monde and El Pais. This symbiotic relationship ensured that a news will be kept alive even without the help of companions in Fleet Street. NYT’s (New York Times) partnership with The Guardian in this NOTW investigation encouraged many others to follow the story. The Murdoch empire went berserk and Rebekah Brooks, the then NOTW editor, wanted to bring “Alan Rusbridger on his knees, begging for mercy.” In July of 2011 Murdoch saw the cracks that was threatening his media empire, a mere 1% percent of his business has tarnished his global image. He was forced to shutdown 168 year old News of the World. The NOTW scandal enabled many politicians to break the omerta code and we saw the rise of labour leader Ed Miliband against the Murdoch empire. The British Prime-Minister was cornered in Parliament and was forced to recommend a cancellation of Murdoch’s BskyB takeover, much to the happiness of his Business Secretary Vince Cable. For Murdoch, the cancellation of BskyB takeover is going to be more costly than NOTW. News Corp has been planning to package its content offerings in large bundles to customers. This monopoly over content would have helped him to make his paywall a success. It won’t surprise many that The Guardian is on the opposite corner in this paywall vs free model for journalism.

The war of Free vs Premium and some strange allies in an unconventional battle

Alan Rusbridger Alan Rusbridger, Editor, The Guardian / Image Credit: Flickr@ Toastwife

It is no secret that newspapers around the globe are losing money and most of them are struggling to find a successful business model in Internet era. Responsible journalism comes at a price and most news companies are not able to fund their activities solely from online advertising. Attempts to find a successful news business model have so far met with failure. The spectrum is populated with different models from “paywall only” to “everything free”. Most of the magazines have spiralled down to a hybrid model in which they offer some free content and paid service for premium content. Online magazines find success with this model because they have the privilege of owning unique materials which cannot be found elsewhere. This model cannot be exported to newspaper industry as no one holds any right over breaking news. Opinion columnists also does not hold the power it once had, the supply of pundits has gone up driving down the demand for them (Few exceptions include the likes of Paul Krugman and Roger Cohen).

The advent of social media has changed the way people read news and often feeds with a “$” or "£” sign(which stands for paywall) are ignored, thereby ensuring the death of that meme. In a world where news is a stream of memes which are selected and re-tweeted(a.k.a reshared, +1-ed, buzzed...), paywalls are a hindrance to “meme evolution”. This has forced many organizations into ambivalence and indecision.The paywall party is led by Murdoch’s News Corp which has times.co.uk and wsj.com behind the wall. Another prominent member behind the wall is Financial Times of London. NY Times has opted for a hybrid model which has both free and premium content. The “everything free” group is led by The Guardian which has made a promise that they are going to be free as long as they are going to be around. This unconventional war resembles the wars we have in Iraq and Afghanistan. The war will remain peaceful, its the peace time which is going to be troublesome, once the war is over. In Afghanistan, US removed Taliban in a swift manner than expected, largely because most of the local tribes went with the momentum. The players in news market will emulate a similar strategy once someone identifies a successful online news model. Murdoch knowing this, wanted to outsmart everyone with a mother-of-all subscription offer bundled along BskyB. Till that day in July which made him humble, even Saint Vince Cable had no chance of stopping him. The fall cannot be more dramatic, the show is still running with more investigations to come. In the mean time, The Guardian has put all its bet on digital media and innovation. They became the first major newspaper to adopt a digital-first philosophy.

Who is going to win this war about journalism? The answer is only as interesting as the post-war peace time which will ensue.

Guardian, media, Media politics, Murdoch, News Corp, News of the World, Politics, Note, World Share this Creative Commons Attribution-ShareAlike 3.0 Unported

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War of the internet business models

Adwaith,

Wow, what a great column! Finally someone has recognized the scope of the battle being fought! Each news organization seems to be struggling on their own without realizing the larger picture and the epic nature of what's going on. Information does want to be free.

My only quibble is I am not sure that the generals will end up being the principles at two legacy news content providers. It may be that a dark horse appears, minus the baggage of the print past, to become the leader.

I wrote a couple of blog posts that have some synergy with your column; perhaps you will find them interesting.

Confessions of an Anti-Paywall Revolutionista. How being Hari Seldon can save us from Info Dark Ages http://blog.kachingle.com/2010/10/confessions-of-an-anti-paywall-revolut...

“Stealing is Stealing” versus “The Italian Job” – musings on JSTOR and internet piracy http://blog.kachingle.com/2011/07/stealing-is-stealing-versus-the-italia...

Cynthia Typaldos

Founder, Kachingle

www.kachingle.com

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