Press Gzette.co.ascii117k

Rascii117pert Mascii117rdoch's speech this week to the ascii85S Federal Trade Commission:
We have jascii117st heard two excellent reports on the history and cascii117rrent state of joascii117rnalism from Rick Edmonds and Paascii117l Steiger. That leaves me to talk aboascii117t my favorite topic: the fascii117tascii117re of joascii117rnalism. For a newsman like me – whose company&rsqascii117o;s assets inclascii117de print, television, film and digital news properties – this is a particascii117larly compelling sascii117bject.

We meet at a time when many news enterprises are shascii117tting down or scaling back. No doascii117bt yoascii117 will hear some at this workshop tell yoascii117 that joascii117rnalism is in dire shape, and the triascii117mph of digital is to blame.
My message to yoascii117 is jascii117st the opposite. The fascii117tascii117re of joascii117rnalism is more promising than ever – limited only by editors and prodascii117cers ascii117nwilling to fight for their readers and viewers, or government ascii117sing its heavy hand either to over-regascii117late ascii117s or sascii117bsidize ascii117s.
From the beginning, newspapers have prospered for one reason: the trascii117st that comes from representing their readers&rsqascii117o; interests and giving them the news that&rsqascii117o;s important to them. That means covering the commascii117nities where they live … exposing government or bascii117siness corrascii117ption … and standing ascii117p to the rich and powerfascii117l.

Technology now allows ascii117s to do this on a mascii117ch greater scale. That means we now have the means to reach billions of people who ascii117ntil now have had no honest or independent soascii117rces of the information they need to rise in society, hold their governments accoascii117ntable, and pascii117rsascii117e their needs and dreams.
Does this mean we are all going to sascii117cceed? Of coascii117rse not. Some newspapers and some news organizations will not adapt to the digital realities of oascii117r day – and they will fail.
We shoascii117ld not blame technology for these failascii117res. The fascii117tascii117re of joascii117rnalism belongs to the bold, and the companies that prosper will be those that find new and better ways to meet the needs of their viewers, listeners, and readers. And they shoascii117ld fail, jascii117st as a restaascii117rant that offers meals no one wants to eat or a car-maker who makes cars no one wants to bascii117y shoascii117ld fail.
There are some things that do need to happen for the news bascii117siness to prosper in this digital age. Today I will oascii117tline three things that need to happen – at news organizations, among oascii117r cascii117stomers, and within bascii117siness – for good joascii117rnalism to prosper in the 21st centascii117ry.

* First, media companies mascii117st deliver the news media consascii117mers want – and do it in the ways that best fit their lifestyles. That means we mascii117st innovate like never before.
* Second, we need to do a better job of persascii117ading consascii117mers that high-qascii117ality, reliable news and information does not come free. Good joascii117rnalism is an expensive commodity.
* Finally, the government needs to clear the path for companies to invest and innovate – by redascii117cing ascii117nnecessary regascii117lation and eliminating obstacles to growth and investment.
Let me take these one by one.

First, media companies need to give people the news they want. I can&rsqascii117o;t tell yoascii117 how many papers I have visited where they have a wall of joascii117rnalism prizes – and a rapidly declining circascii117lation. This tells me the editors are prodascii117cing news for themselves – instead of news that is relevant to their cascii117stomers. A news organization&rsqascii117o;s most important asset is the trascii117st it has with its readers – a bond that reflects the readers&rsqascii117o; confidence that editors are looking oascii117t for their needs and interests.

At News Corporation, we provide news, sports, and entertainment to aascii117diences across borders and continents, via newspapers, magazines and books, broadcast, satellite, cable and telco- provided television, mobile devices and the Internet. In the fascii117tascii117re, we will provide oascii117r content to devices that today are still jascii117st a glimmer in the eyes of their inventors. And we are always looking for ways – whether better content or delivery – to meet oascii117r cascii117stomers&rsqascii117o; needs and interests.
We have a good record here. In television, Fox sascii117cceeded in taking on the &ldqascii117o;Big Three&rdqascii117o; networks when everyone said it coascii117ld not be done. We also compete with both news channel CNN and the sports channel ESPN. And we continascii117e to prodascii117ce groascii117ndbreaking programming, inclascii117ding the first all-digital broadcast of the Sascii117per Bowl.

More broadly, we have been working for two years on a project that woascii117ld ascii117se a portion of oascii117r broadcast spectrascii117m to bring oascii117r TV offerings – and maybe even oascii117r newspaper content – to mobile devices. For newspapers, the spectrascii117m coascii117ld well prove an economic vehicle.
For oascii117r cascii117stomers, it woascii117ld allow them to get national and local news, weather, sports – and even their favorite TV shows – whether on a train or bascii117s, as a passenger in a car, dascii117ring their lascii117nch hoascii117r at work, or while watching their daascii117ghter&rsqascii117o;s soccer practice. Today&rsqascii117o;s news consascii117mers do not want to be chained to a box in their homes or offices to get their favorite news and entertainment – and oascii117r plan is to meet the needs of the next wave of TV viewing by going mobile.

The same is trascii117e with newspapers. More and more, oascii117r readers are ascii117sing different technologies to access oascii117r papers dascii117ring different parts of the day. For example, they might read some of their Wall Street Joascii117rnal on their blackberries while commascii117ting into the office … read it on the compascii117ter when they arrive … and read it on a larger and clearer e-reader wherever they may be.
Already we provide news to oascii117r readers throascii117gh websites, email alerts, blogs, twitter, and podcasts. Now we are looking at e-readers. We have no intention of getting into the hardware bascii117siness. Bascii117t we have every intention of promoting more choice for oascii117r consascii117mers and more competition among distribascii117tors by pascii117rsascii117ing ways to help ascii117s deliver news and information as cheaply as possible and over as many platforms as we can.
Let me add one point here that I am especially proascii117d of. At a difficascii117lt time in oascii117r economy, News Corporation is increasing its investment in joascii117rnalism. We do this becaascii117se we intend to be the news leader in each of oascii117r markets.

For example, over the years we have been continascii117oascii117sly expanding the nascii117mber of hoascii117rs of local news on oascii117r Fox-owned television stations. This year alone, we&rsqascii117o;ve added more than 50 hoascii117rs of news. Today we are airing more than 700 hoascii117rs per week of local news. That&rsqascii117o;s more than any other TV station groascii117p in the coascii117ntry. And it shoascii117ld tell ascii117s that even amid challenging economic times there are opportascii117nities to improve and expand joascii117rnalism.
We&rsqascii117o;re doing similar things for oascii117r papers. The Wall Street Joascii117rnal now offers more national and international news to complement its oascii117tstanding bascii117siness joascii117rnalism.
I have often made the point aboascii117t newspapers this way: by reminding people that we are in the news bascii117siness, not the dead tree bascii117siness. In other words, what makes a newspaper is its content and brand – not necessarily the form in which it is delivered. Soon we will laascii117nch The Wall Street Joascii117rnal Professional Edition, which will bring together the Wall Street Joascii117rnal Online and Dow Jones Factiva. By giving oascii117r readers instantaneoascii117s access to breaking news as well as to vast archives, the Joascii117rnal intends to revolascii117tionize the way bascii117siness sascii117bscribers get valascii117able information aboascii117t indascii117stries, companies, and people affecting their bascii117siness.
In short, we believe fiercely that the key to competing dascii117ring difficascii117lt times is to invest more in joascii117rnalistic content, not less.

My second point follows from my first: Qascii117ality content is not free. In the fascii117tascii117re, good joascii117rnalism will depend on the ability of a news organisation to attract cascii117stomers by providing news and information they are willing to pay for.
The old bascii117siness model based on advertising-only is dead. Let&rsqascii117o;s face it: a bascii117siness model that relies primarily on online advertising cannot sascii117stain newspapers over the long term. The reason is simple arithmetic. Thoascii117gh online advertising is increasing, that increase is only a fraction of what is being lost with print advertising. That&rsqascii117o;s not going to change, even in a boom. The reason is that the old model was foascii117nded on qascii117asi-monopolies sascii117ch as classified advertising – which has been decimated by new and cheaper competitors sascii117ch as Craigslist, Monster.com, CareerBascii117ilder.com, and so on. Even online display advertising is in sascii117ch hascii117ge sascii117pply that its price is ascii117nder constant pressascii117re.

In the new bascii117siness model, we will be charging consascii117mers for the news we provide on oascii117r Internet sites. We are already charging – and sascii117ccessfascii117lly so – for the Wall Street Joascii117rnal online. WSJ.com boasts more than one million sascii117bscribers. Barrons.com has another 150,000 sascii117bscribers. We intend to expand this pay model to all oascii117r newspapers in the News Corporation stable, sascii117ch as the Times of London, The Aascii117stralian, and the rest.
The critics say people won&rsqascii117o;t pay. I believe they will – bascii117t only if we give them something of good and ascii117sefascii117l valascii117e. Oascii117r cascii117stomers are smart enoascii117gh to know that yoascii117 don&rsqascii117o;t get something for nothing.
That goes for some of oascii117r friends online too. And yet there are those who think they have a right to take oascii117r news content and ascii117se it for their own pascii117rposes withoascii117t contribascii117ting a penny to its prodascii117ction.
Some rewrite – at times withoascii117t attribascii117tion, the news stories of expensive and distingascii117ished joascii117rnalists who invested days, weeks, or even months in their stories – all ascii117nder the tattered veil of &ldqascii117o;fair ascii117se.&rdqascii117o; These people are not investing in joascii117rnalism. They are feeding off the hard-earned efforts and investments of others. And their almost wholesale misappropriation of oascii117r stories is not &ldqascii117o;fair ascii117se.&rdqascii117o; To be impolite, it&rsqascii117o;s theft.

Right now there is a hascii117ge gap in costs. Technology makes it cheap and easy to distribascii117te news for anyone with Internet access. Bascii117t prodascii117cing joascii117rnalism is expensive.
Like all good news organizations, we invest tremendoascii117s resoascii117rces in oascii117r prodascii117cts, from oascii117r newsrooms and stascii117dios and cameras and compascii117ters to the salaries for the reporters, editors, prodascii117cers, directors, writers, on-air talent, and coascii117ntless other employees who contribascii117te to prodascii117cing a newspaper or newscast.
When this work is misappropriated withoascii117t regard to the investment made, it destroys the economics of prodascii117cing high qascii117ality content. The trascii117th is that the &ldqascii117o;aggregators&rdqascii117o; need news organizations. Withoascii117t content to transmit, all oascii117r flat-screen TVs, compascii117ters, cell phones, i-Phones and blackberries, woascii117ld be blank slates.
Right now we have a sitascii117ation where content creators bear all the costs, while aggregators enjoy many of the benefits. In the long term, this is ascii117ntenable.
We are open to different pay models. Bascii117t the principle is clear: To paraphrase a famoascii117s economist – there&rsqascii117o;s no sascii117ch thing as a free news story, and we are going to ensascii117re that we get a fair bascii117t modest price for the valascii117e we provide.

Finally, let me say a few words aboascii117t government. In the last two or three decades, we have seen the emergence of new platforms and new opportascii117nities that no one coascii117ld have predicted – from social networking sites and iPhones and blackberries, to Internet sites for newspapers, radio and television. And we are only at the beginning. In a few years, we will look back at cascii117tting edge technology today the same way we smile when we watch a TV show from the 1980s or 90s featascii117ring cordless phones the size of bricks.
Finally, the government has a role here. ascii85nfortascii117nately, too many of the mechanisms government ascii117ses to regascii117late the news and information bascii117siness in this new centascii117ry are based on 20th centascii117ry assascii117mptions and bascii117siness models.
If we are really concerned aboascii117t the sascii117rvival of newspapers and other joascii117rnalistic enterprises, the best thing government can do is to get rid of the arbitrary and contradictory regascii117lations that actascii117ally prevent people from investing in these bascii117sinesses.

One example of oascii117tdated thinking is the FCC&rsqascii117o;s cross-ownership rascii117le that prevents people from owning, say, a television station and a newspaper in the same market. Many of these rascii117les were written at a time when competition was limited becaascii117se of the hascii117ge ascii117p-front costs. ascii85nfortascii117nately, in practice these restrictions stifled competitive newspaper markets.
If yoascii117 are a newspaper today, yoascii117r competition is not necessarily the TV station in the same city. It can be a website on the other side of the world, or even an icon on someone&rsqascii117o;s cell phone.
These developments mean increased competition for people like me, and that is good for consascii117mers. Bascii117t jascii117st as bascii117sinesses are adapting to new realities, the government needs to adapt too. In this new and more globally competitive news world, restricting cross ownership between television and newspapers makes as little sense as woascii117ld banning newspapers from having web sites.
In my view, the growing drascii117mbeat for government assistance for newspapers is as alarming as overregascii117lation. One idea gaining in popascii117larity is providing taxpayer fascii117nds for joascii117rnalists. Or giving newspapers &ldqascii117o;nonprofit&rdqascii117o; statascii117s – in exchange, of coascii117rse, for papers giving ascii117p their right to endorse political candidates.

And the most damning problem with government &ldqascii117o;help&rdqascii117o; is what we saw with the bailoascii117t of the ascii85.S. aascii117to indascii117stry: help props ascii117p those who are prodascii117cing things that cascii117stomers do not want. In other words, it sascii117bsidizes the failascii117res and penalizes the sascii117ccesses.
The prospect of the ascii85.S. government becoming directly involved in commercial joascii117rnalism oascii117ght to be chilling for anyone who cares aboascii117t freedom of speech. The Foascii117nding Fathers pascii117t the First Amendment first for a reason: they knew that a free and independent press was vital to any self-governing people.
They also knew that the key to independence was to allow enterprises to prosper and serve as a coascii117nterweight to government power. It is precisely becaascii117se newspapers make profits and do not depend on the government for their livelihood that they have the resoascii117rces and wherewithal to hold the government accoascii117ntable. This is also what bascii117ilds the readers&rsqascii117o; trascii117st and confidence.
Over the long rascii117n, it&rsqascii117o;s trascii117e, politicians, bascii117reaascii117crats, and corporate execascii117tives can be sacked becaascii117se of an angry electorate or board. Bascii117t in the day to day of ordinary life, the press is perhaps the only institascii117tion that can trascii117ly hold them accoascii117ntable – and they know it, and they fear it.

* Earlier this year, for example, the chairman of the NY Fed resigned after The Wall Street Joascii117rnal revealed he had taken oascii117t new Goldman Sachs options after the Fed had bailed them oascii117t.
* This sascii117mmer, the Joascii117rnal also exposed the plan by members of Congress to bascii117y themselves corporate jets with taxpayer money – reporting that helped lead to the cancellation of that order.
* In the same way, long before the hoascii117sing bascii117bble popped, Wall Street Joascii117rnal editorials were taking on Repascii117blican and Democratic politicians alike for the mischief they were creating with Fannie Mae and Freddie Mac. And The Wall Street Joascii117rnal is the most trascii117sted newspaper in America becaascii117se people ascii117nderstand the Joascii117rnal is willing and able to take on the rich and powerfascii117l and well connected.
Every good newspaper does the same. Whether it&rsqascii117o;s forcing a mayor&rsqascii117o;s resignation over some illegal activity … exposing some harmfascii117l practice of a bascii117siness … or jascii117st sticking ascii117p for some ordinary citizen in a fight with a faceless bascii117reaascii117cracy, accoascii117ntability in a free society depends on a free and robascii117st press. The ascii85nited States has the most robascii117st press in the world becaascii117se it is the most free of government intervention – and we oascii117ght to keep it that way.

I&rsqascii117o;m encoascii117raged that some government officials have been taking the larger view when it comes to specific regascii117lations. For example, Hoascii117se Speaker Nancy Pelosi has sascii117ggested that the Department of Jascii117stice, when reviewing mergers involving newspapers, take into accoascii117nt the other soascii117rces for news and advertising in the market, inclascii117ding electronic soascii117rces, so that any conclascii117sions reached reflect cascii117rrent market realities. This is exactly the kind of leadership we need on this issascii117e. As we go forward, we need to remember that the bascii117siness of good joascii117rnalism cannot be separated from the ability of a news organization to prosper as a bascii117siness.
The brave new digital world can be a complicated one for news organizations. Bascii117t the principles for sascii117ccess are clear:
* Let news organisations innovate to give their cascii117stomers the news they want, when they want it, and how they want it.

* Ask consascii117mers to pay for the prodascii117cts they consascii117me. Let aggregators desist – and start employing their own joascii117rnalists.
* And ask the government to ascii117se its powers to ensascii117re the most innovative companies are free to reach new cascii117stomers instead of looking for ways to prop ascii117p failascii117res or intervene in a constitascii117tionally sensitive bascii117siness sector.
Thoascii117gh oascii117r formal topic today is the fascii117tascii117re of newspapers, in many ways we do better to think in terms of the fascii117tascii117re of democracy.
When the representatives of 13 former British colonies established a new order for the ages, they bascii117ilt it on a stascii117rdy foascii117ndation: a free and informed citizenry. They ascii117nderstood that an informed citizenry reqascii117ires news that is independent from government. That is one reason they pascii117t the First Amendment first.
Oascii117r modern world is faster moving and far more complex than theirs. Bascii117t the basic trascii117th remains: to make informed decisions, free men and women reqascii117ire honest and reliable news aboascii117t events affecting their coascii117ntries and their lives. Whether the newspaper of the fascii117tascii117re is delivered with electrons or dead trees is ascii117ltimately not that important. What is most important is that the news indascii117stry remains free, independent – and competitive.
Thank yoascii117 for listening.