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.

Fox Joins Broadcasters in Blocking Google TV

NBC, CBS and ABC have already said no to Google TV, and now Fox is making it unanimous.
Fox is the last of the broadcast networks to block episodes of its shows from appearing
on Google's video platform. Google's "footprint was too small."

Newsweek & Daily Beast said to resume merger talks after 3-week cooling off period

Big-name principals behind Newsweek and the Daily Beast have resumed merger talks, insiders said late today.

Talks between the online news firm, owned by media mogul Barry Diller and led by Chairman and Editor-in-Chief Tina Brown, and Newsweek’s new owner, Sidney Harman, broke down Oct. 18 amid reports Harman didn’t want to cede power as an opinion leader.

Sources at the time said Brown had insisted upon full editorial control of the combined newsroom.

Now sources say that after a three-week cooling off period, talks are back on.
Neither Brown nor Harman could be reached for comment at presstime.
Harman, a 92-year-old stereo tycoon, bought the struggling magazine from the Washington Post Co. in August for $1 and the assumption of up to $40 million in liabilities.

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.”

CBS, ABC Aim to Stop Online TV Site FilmOn

Reuters reports that CBS, ABC, NBC and Fox are asking a federal court to stop the   Internet video service FilmOn from offering TV channels over the web and on   Apple's iPad for free. "I'm not a  thief," says founder Alki David. "We're a bona   fide business. We're not pirates." ABC's 'Dancing' Attracts Tea Party Viewers.

Quadrangle's Media Pow-Wow Gets Underway

Media moguls and financiers are gathering at New York's Plaza Hotel for Foursquare, the annual invitation-only media conference held by private-equity firm Quadrangle. At Wednesday's "pitch panel," startups will be grilled by old-time media execs