Murdoch says papers should charge on Web

WASHINGTON Fri Apr 3, 2009 10:49am EDT

The headquarters of the New York Times is pictured on 8th Avenue in New York April 30, 2008. REUTERS/Gary Hershorn

The headquarters of the New York Times is pictured on 8th Avenue in New York April 30, 2008.

Credit: Reuters/Gary Hershorn

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WASHINGTON (Reuters) - Rupert Murdoch, whose media company News Corp owns one of the few U.S. newspapers that makes people pay to read its news on the Web, said more papers will have to start doing the same to survive.

Murdoch, who bought The Wall Street Journal and its parent company Dow Jones & Co in 2007, said online advertising, which most U.S. publishers hope will offset ad revenue declines at their print divisions, will not cover their costs.

"People reading news for free on the Web, that's got to change," said Murdoch speaking at The Cable Show, an annual cable television industry event, in Washington, D.C.

Murdoch pointed to the Journal's main rival in the United States, The New York Times, as an example. The Times has one of the most popular U.S. newspaper websites, but still cannot cover its costs with online ads, he said.

Murdoch's newspaper empire includes the New York Post, the Times of London and other papers in Britain and Australia, which are available online for free. The Journal had been charging for access for years before News Corp bought it.

His comments come as the Times holds a semi-public debate about whether it should revisit charging readers to get some or all of its news and commentary online. It canceled an earlier experiment, "TimesSelect", to charge for columnists and similar content because it made more money from ads.

The Journal charges readers for access to its website, which Murdoch said was "not a gold mine, but it's not bad". When he first took over the paper, News Corp and Dow Jones executives considered making the site free, but determined it would be better to keep charging for most, but not all, content.

As online ad revenue growth stumbles and in some cases falls, publishers are being forced to rethink whether charging for access is possible, or whether readers would simply stop going to their websites.

Time is running out. Some U.S. publishers like Tribune Co have filed for bankruptcy. Others, including Hearst Corp and EW Scripps Co, have been shutting down big city dailies. Still others are furloughing employees, cutting pay and buying out or laying off thousands of workers.

Even as they cut costs, publishers are looking for ways to get more people to read -- and pay for -- journalism.

Murdoch also told Cable Show attendees that News Corp is investing with partners in a new portable device to let people read electronic versions of their daily papers.

News Corp is investing in a reading device similar to Amazon.com's Kindle and Sony Corp's Reader but with a larger screen for reading newspapers, Murdoch said.

Newspapers like Pearson PLC's Financial Times and Gannett's USA Today are working with a Mountain View, California company called Plastic Logic on newspaper-specific reading device expected to launch early next year.

Murdoch did not clarify if it was the same technology and the company did not return calls seeking comment.

Murdoch also addressed concerns among newspaper publishers that search engines like Google Inc and Yahoo Inc help users to find stories by aggregating links to newspapers websites and blogs -- but then wrest ad dollars from them that they think should be theirs.

"The question is, should we be allowing Google to steal all our copyright... not steal, but take," said Murdoch. "Not just them but Yahoo."

Google Chief Executive Eric Schmidt is expected to discuss this topic when he speaks at the Newspaper Association of America's annual conference in San Diego next week.

Separately, Murdoch said he is still "slightly pessimistic" about the economy and said he does not see things returning to previous levels for another two to three years. The recession, along with hurting newspapers, has contributed to ad revenue declines at News Corp's U.S. local television business too.

Murdoch also talked about the financial industry's help in sparking the world economic crisis. While there have been some well publicized excesses by some executives, he said, the U.S. government should go easy on regulation.

"We need to get an SEC that's awake and maybe a few more regulations but not too many," he said.

(Reporting by Yinka Adegoke, editing by Leslie Gevirtz)

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