Just when you thought he might be joking about charging to read News Corp info on his news sites, Rupert Murdoch again shows that he thinks it’s he who holds all the cards. The Kindle revenue-sharing component of News Corp’s deal with Amazon is not enough for him:
“but it’s not a big number, and we’re not encouraging it at all because we don’t get the names of the subscribers,” he said. “Kindle treats them as their subscribers, not as ours, and I think that will eventually cause a break with us.”
So Kindle is nothing but a conduit, and it makes as much sense to call Kindle readers Amazon subscribers as it would to say that a paper mill that produces newsprint has subscribers, I guess. Mr. Murdoch: If they were your subscribers they would be subscribing to the WSJ site or getting a physical paper. They all registered their preference for delivery of news generally, including yours. If Amazon calls Murdoch’s bluff he’ll see that it’s News Corp’s offerings that will be marginalized, not Kindle.
Here though, is the real shocker:
“As I’ve said before, the traditional business model has to change rapidly to ensure that our journalistic businesses can return to their old margins of profitability,” Murdoch said. “Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting.”
No one thinks ‘giving away content’ in itself would create revenue, but in a world where you have to give it away to compete, a child can rattle off ways to give it away and still make money. I can’t help but wondering if this is just posturing to aid future negotiations. As to the traditional business model changing: it has changed already. The question is whether News Corp’s approach will change?
