News Corp.'s Murdoch Predicts Ad Changes for Digital Newspapers

James Murdoch, News Corp.’s chairman for Europe and Asia, expects newspapers to act more like cable channels as they increasingly move online and develop a wholesale marketplace for advertising.

“Digital news will look like cable channels with affiliated revenue,” Murdoch said at a media conference in Monaco today. Titles will compete for ad revenue across this market and media buyers will “make a big commitment” to purchase advertising, rather than making bookings for just a month at a time, he said.

News Corp.’s U.K. titles the Times and Sunday Times erected paywalls in July, which reduced the number of readers and advertisers on the sites. Murdoch this month said these newspapers have more than 105,000 paying online customers, and today characterized paying readers as “more engaged.”

“People assume that 100 percent reach is necessary all the time -- it’s not the case,” he said. A blend of ad dollars and subscription revenue are Murdoch’s target and he also aims to win readers to the titles’ paid-for iPad applications.

Newspapers are increasingly charging for online access to make up for lost revenue from print ads. Newspapers with paid- for access say niche audiences that advertisers can target are more valuable than visitors who don’t subscribe and who find articles from search engines such as Google.

“If you’re going to monetize something you shouldn’t give it away for free,” Murdoch said. “If you’re investing in something and figuring how to make money, it doesn’t work if you give away.”

Opposing View

Eric Hippeau, chief executive officer of online news site The Huffington Post, put an opposing view at the media conference yesterday when he said that charging to view content would result in lost advertising.

“IBM, HP, Coke are all big advertisers and if we charge users we will limit the audience,” Hippeau said on a panel. “With the exception of the Wall Street Journal, everyone that’s tried to charge and erect a paywall has had a terrible experience. News wants to be free; you can’t put that genie back in the bottle.”

Chris Ahearn, the president of media at Thomson Reuters Corp. called Hippeau’s assessment “misguided” and said The Huffington Post was more a curator of news, not a creator that spends millions on news development.

Bloomberg LP, the parent of Bloomberg News, competes with Thomson Reuters in selling financial and legal information and trading systems.

To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net.

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net.

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