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.

Yuri Milner: New-Style Oligarch?

He sees himself as a 'servant' of the digital marketplace


Digital Sky Technologies CEO Yuri Milner is a big investor in the hottest Internet companies of the day, but the Russian businessman isn't keen on the idea he's an "oligarch."

Instead, Milner prefers to think of himself in the services business, bringing his knowledge of East and West to his investments in Facebook, Zynga and Groupon.

"I'm a servant," he said in a wide-ranging interview with AdweekMedia editorial director Michael Wolff at the Monaco Media Forum today. "I'm trying to align our interests with them."

DST became the talk of Silicon Valley when it invested $200 million in Facebook in May.

Since then, it has led a $180 million round for Zynga and $135 million financing for Groupon.

It is reportedly interested in a big new round of funding for Twitter.

DST's Russian business, Mail.ru, went public on the London Stock Exchange this week.

The positive reception for the collection of e-mailing, social networking and gaming properties can be seen as a barometer to the reception Facebook would get if it decides to go public.

"There is a significant momentum behind the social Internet, a wide range of public investors were very enthusiastic about that," he said.

Milner, a theoretical physicist by training, believes large-scale connectivity is giving rise to the "era of mathematicians," in which algorithms can tap into huge pools of social data to inform people of everything from new friends to new products. Every 12-18 months, people double the amount of information they share, further improving the ability of a social platform like Facebook to deploy artificial intelligence, he said.

"There's a huge demand for that sort of intelligence just because of this unprecedented sharing," Milner said.

Milner was mum on a possible Facebook IPO, saying the company's executives will decide when and if that's a right move. He anticipates Facebook will further diversify its business model to complement its advertising business with more direct payments from users, which is more popular with Chinese social networks.

"I'm trying to learn from various corners of the world," Milner said. He noted a Chinese entrepreneur recently jokingly told him, "We can talk as communist to communist."

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.