News Corp.'s James Murdoch Bets on Paid Model

James Murdoch has no use for the Internet-is-free crowd. The CEO of News Corp. Europe and Asia said finding a business model for news in the digital era isn't all that complicated.

"If you're going to monetize something, you should probably not give it away for free," he said during a Q&A at the Monaco Media Forum. "I think digital newspapers' economics will look a lot more like cable channels."

It's a long road to get there. The Wall Street Journal has been able to charge for access because most of its subscribers are using corporate credit cards. But the jury is out on subscriptions elsewhere in the empire. The Times and Sunday Times were put behind a pay wall in July. News Corp. last week crowed it has sold 105,000 digital products, a roll-up that doesn't break out monthly subscriptions. Some estimates put that figure at just 10,000 per month at the expense of most of its Web traffic.

Murdoch said publishers need to be willing to sacrifice wide reach in the process. The upside is those that pay tend to spend much more time with the publication, he added.

"We're happy to invest more and price it fairly and accept the fact that not everyone will pay," he said.

The belief in free is an article of faith for the tech world. Chris Anderson, the editor of Wired, even wrote an entire book on the economics of business models based around technology enabling free services. Those views aren't in tune with reality when it comes to media, Murdoch said. They rarely, for example, take into account the chain of professionals that need to get paid along the way for the production of quality content.

"There's no new technology that makes athletes less greedy," he said.

The invitation-only Monaco Media Forum, which continues through Nov. 12, gathers approximately 300 global leaders in traditional and new media for discussions about the future of online, broadcast and print.

Hulu Brings in the Dough: $240M of Revenue in 2010

Hulu is going to make more than $240 million in revenue in 2010, the company’s CEO Jason Kilar revealed at GigaOM’s NewTeeVee Live conference today. Kilar added that Hulu generated $108 million in revenue in 2009. Hulu had 30 million users in October 2010, who watched some 260 million content streams as well as 800 million ad streams during that month. Kilar said that Hulu now has 235 content partners. The company had 352 advertising clients in Q3.

“The leading source of revenue is through advertising,” said Kilar, adding that more than 40 percent of money generated with content in this industry is generated through advertising. This has led Hulu to optimize its ad experience, and Kilar showed a few new features that the company will roll out in the future.

Hulu will introduce personalized advertising, addressing users by name. Kilar said that this type of personalized advertising is getting a 10 percent response rate. The company is also comparing users’ viewing history to develop more exact profiles. For example, it can with a 99 percent certainty tell whether a viewer is male or female just by looking at his video viewing history.

Another feature the company will roll out is the ability to swap out commercials, so that users who don’t want to watch a car commercial can switch to a commercial for dog food instead, for instance. Kilar said that the advertisier of the ad that gets swapped out doesn’t get charged a cent. Kilar said that ads on Hulu are 55 percent more effective than ads displayed on traditional channels.

Kilar didn’t want to comment on plans for an IPO when quizzed by Om Malik during the fireside chat following his keynote speech. Asked why Hulu Plus is showing its users commercials, he reiterated that advertising will always be a core component on Hulu. Om questioned whether more accountability in advertising will lead to a much smaller cake for everyone. Kilar responded that accountability is essential to move ad dollars online. “That’s the way the world should be,” he said.

So what’s Kilar’s take on cord cutting? “To call it today, it’s premature,” he said, adding that this doesn’t mean cord cutting won’t happen in the future. However, he doesn’t believe that Hulu is an enabler of cord cutting, simply because sports and other forms of content are missing. That’s not an accident, Kilar explained: “Hulu, Hulu Plus and Netflix have all been consciously designed… not to be a substitute for pay TV services in the living room.”

Microsoft Plans to Become a Media Company

Within the next four to 10 years, says Microsoft chief Steve Ballmer, as much as 25% of the software giant's revenues are likely to come from advertising. Microsoft can already deliver advertising to new platforms such as in-game promotions and mobile-phone campaigns.

Business Week has more.

TiVo strikes back against zippers

NYT reported that holy grail on Madison Avenue these days is to create advertising that is “TiVo-proof” — compelling enough to owners of digital video recorders that they will watch the commercials rather than zip past them when replaying recorded programs.

In an effort to come up with a TiVo-proof ad for itself, TiVo is relying on humor, double entendre and unfamiliar body parts. In one ad, above, a baseball fan’s antennas spring to attention when his girlfriend beckons.
But how do you make a TiVo-proof commercial for TiVo? Executives at TiVo hope the answer is to hire an agency known for broad humor, talking animals and chirpy jingles, then approve a campaign centered on a silly (though eye-catching) visual device, meant to symbolize how much TiVo differs from generic DVRs.

The proliferation of DVRs means that viewers are increasingly watching TV programs on a delayed basis rather than live. That in turn is leading Nielsen to rework its longtime methods for measuring viewership to count people who play back a program within one, three or seven days after it ran.

And because so many DVR owners fast-forward through spots rather than watch them, Nielsen plans to start providing by the end of May ratings for commercials in addition to its traditional program ratings. (TiVo has started supplying its own data to advertising agencies, showing second-by-second viewing patterns among its subscribers.)

TiVo, as the brand of DVR that has become synonymous with the category, is benefiting from the growing popularity of digital recording in the same way that brands like Band-Aid, Coke, Kleenex, Post-it, Q-tips and Xerox took advantage of similar synonym status in their markets.

But TiVo’s gains in subscribers have slowed significantly as more operators of cable TV systems sell their own — usually unbranded — DVR services.

As of Jan. 31, TiVo reported 4.4 million subscribers, 1.73 million who owned TiVo brand recorders and 2.7 million who had TiVo service through their DirecTV satellite service. The total was only 1.8 percent higher than the 4.36 million subscribers that TiVo had on the same day in 2006.