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Murdoch: You're All Going To Pay For This

Rupert Murdoch is pissed. In the wake of massive financial losses, the billionaire media mogul is washing his hands of free content, and plans to charge fees for every online news property he owns by the end of this fiscal year. Will this ignite another round in the Anderson vs. Gladwell battle royale?

"The digital revolution has opened many new and inexpensive distribution channels but it has not made content free," said Murdoch. "We intend to charge for all our news websites."

To be clear, that includes not only the online versions of The Wall Street Journal, The London Sun and The Post (millions of Page Six junkies just gasped), but also all news-related Web sites, including those dedicated to Fox News Channel and Fox Business Network.

According to a just-released earnings report, News Corp.'s newspaper division saw operating profit nosedive 63% to $96 million -- while the whole company, including 20th Century Fox and HarperCollins, posted a fiscal fourth-quarter loss of $203 million, or 8 cents per share, for the three months ended June 30. In stark contrast, a year earlier the company reports profit of $1.1 billion, or 43 cents per share.

The company said the loss was a result of $680 million in charges at Fox Interactive Media, related primarily to social-networking site MySpace. Fourth-quarter revenue came in at $7.67 billion, down 10.5% from the prior year but in line with analysts' expectations for the firm. For the full year, News Corp. lost $3.4 billion, or $1.29 per share, vs. net income of $5.4 billion, or $1.81 per share.

Steve Brill, for one, must be elated. The media entrepreneur has been on a crusade to convince media publishers that "giving away" ad supported content is killing journalism as we know it. Along with former Wall Street Journal publisher Gordon Crovitz, and Leo Hindery, the former head of Tele-Communications, Inc., Bill recently embarked on a venture to help publishers charge readers for full access to Web sites, single articles or packages of related content.

The obvious question is how most publishers can expect to charge for content when consumers have really access to a sea of free fare. For Murdoch, the answer is simple. by "making our content better and differentiated from other people."

Also, Murdoch doesn't envision his properties offering the only hard-to-get content for very long. "I believe that if we're successful, we'll be followed fast by other media."

Could this spell the beginning of the end for all free content and services online? A dime per daily weather forecast? A nickel per Google search? A penny per tweet? Only time will tell

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Read the whole story at The Guardian »

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