As Rupert Murdoch announces that all of News Corporation’s online properties will charge for content by 2010, it strikes us that this is a pretty reasonable business response to web advertising rates being so low (and thus unable to sustain the labor inputs needed to run News Corporation’s online properties).
It will be interesting to see if it’s effective for a mega-media provider and whether it will spur fast-followers of that size. It’s illegal for companies to collude on prices, but this announcement by a provider of this scope is a very public signal that may establish a price floor. We expect to see other mega-players with the same wide channel capability make a similar move in response to this very public market signal.
Whether it succeeds is a whole other matter. Will subscription revenue exceed the meager streams thrown off by online advertising?
In any case, pretty exciting news in the world of media and marketing.
