So Rupert just bought himself the Wall Street Journal? Millions do that every day. Of course, they don’t usually pay five billion dollars for their copies.
In a departure from Mr Murdoch’s recent strategy of adding digital expertise through acquisitions such as MySpace (pricetag a mere $580 million), the media mogul is instead paying nine times as much to buy one of the biggest companies in the slow-growing US newspaper sector.
As noted in the Financial Times, the five billion dollar purchase of the Dow Jones Company is a counter-intuitive investment in an industry on which many investors have given up. Recent auctions of other American dailies have drawn few bidders and trading statistics have been grim. In May 2007, compared with a year earlier, advertising revenue for US newspaper companies fell by more than 9 per cent - the worst month ever in a non-recession period. Classified advertising – from jobs to property – is shifting to the internet at a faster pace than ever, while profit margins are being squeezed because so many costs – such as paper and printing presses – are fixed.
Yet the purchase of Dow Jones is less of a bet on newspapers than a move by Mr Murdoch to acquire content which he can then use across the many different media sectors in which he plays: print, television and, increasingly, the internet.
As the FT article points out, the financial news and information that Dow Jones produces is regarded as more valuable than the general news on which many newspapers survive, both in its importance to trading and business decisions and in the appeal to advertisers of its readers, who are generally well-educated and wealthy.
Overall, demand for financial information is expected to grow, fuelled by the growth of financial assets themselves. In one estimate, the McKinsey Global Institute says financial assets worldwide will be worth $214,000bn by 2010, up from $140,000bn in 2005.
To manage these assets, the need for accurate, fast and in-depth financial information will grow around the world, especially in Asia - and, although individuals are used to getting information for free on the web, businesses do pay for information. Many continue to do so, especially when gaining access to information faster, or being able to analyse market trends better, gives users an edge over rivals and makes them money.
Newspapers in general, perhaps surprisingly, have been quick to embrace the internet as a distribution mechanism.
The problem, of course, has always been earning enough money from online offerings. The Wall Street Journal has been able to charge users a fee for online access, but it’s one of the few newspapers that’s been able to successfully sell paid subscriptions. Most other papers have been obliged to rely on advertising, but it’s a slow road. Goldman Sachs analysts recently predicted at least a five-year transition period before the newspaper industry recoups enough digital revenues to offset print’s decline.
On the internet, information just loves to be free. The challenge for any newspaper organization, whether a giant like Mr Murdoch’s News Limited or the local parish pump periodical, is to earn enough money giving away contentto pay for the journalistic processes required to assemble it in the first place.
Of course, the humble business of newsgathering has already evolved somewhat over the years. If we discount the creators of cave paintings, hieroglyphics and dead sea scrolls as inappropriate ancestors of journalism, thenthe earliest proto-journalists in the ancient world were travellers, who observed events in one place and then spread the word at their next port of call. Such methods were at best erratic, at worst embellished and unreliable (a problem that remains with us today).
Under the Imperial Rome of Julius Caesar and his heirs, news of the day (Acta Diurna, Daily Events) from the capital was painstakingly scribed for distribution to the farflung colonies. The reporters, servants of the Empire, were required to provide reportage which complied with their masters’ worldview; the penalty for disobedience was only too literally the editorial spike.
As BC gave way to AD and civilisation relentlessly marched its way towards the perils of our modern world, such handcrafted bulletins were supplemented by other mechanisms such as the wandering minstrel’s ballads (capturing contemporary events in singalong fashion) and the dulcet tones of the town crier. Almost inevitably, the earliest known printed newspaper appeared inBeijing in 748.
The first significant journalism breakthrough came with the arrival ofJohannes Gütenberg and his 1447 invention of movable type. From there to the tabloids was just a matter of time.
After Gütenberg, innovation started to break out all over Europe, and attribution gets a little messy – too many “Number 1 with an asterisk”claimants. Zeitung, a German news report, made its debut in 1502. Trewe Encountre became the earliest known English-language news sheet in 1513.Mercurius Gallobelgicus was the world’s first periodical, emerging from Colognein 1592 and published in Latin twice a year for distribution at book fairs.Germany’s Avisa Relation oder Zeitung, in 1609, became the first regularly published newspaper in Europe.
This collection of worthy European publications must have satisfied the demand of the times for “all the news that’s fit to print”, because it wasn’t until 1665 that the first regularly published English-language newspaper, The Oxford Gazette, started pumping out news twice a week. The Gazette owed its existence to the Black Plague, which saw Charles II and his court relocate fromLondon to Oxford as a precaution. The King and his courtiers wanted newspapers to read, but were afraid that any newspapers coming fromLondon might be infected. Because he could, Charles II promptly ordered theOxford University printer to bring out a local paper.
The earliest forms of news gathering and dissemination were typically performed at the urging of the establishment (Julius Caesar, Charles II et al.) and the notion of independent, objective reporting was not an option. Investigative journalism is an even more modern construct.
For that we owe a debt of gratitude, not to Woodward and Bernstein, not even to Lois Lane and Clark Kent but to nineteenth century pioneers such asHenry Demarest Lloyd who in the 1880s published a series of articles exposing corruption in business and politics. Nellie Bly, another courageous journalist in those perilous times, was a young woman who put herself at great personal risk going undercover to investigate social issues such as child labour, low wages and unsafe working conditions.
Neither Nellie nor Henry could have effectively practised their trade, of course, without the willingness and support of their editors and publishers. There was no blogging software in nineteenth century New York, no talkback radio, no Xerox®. Without an outlet, there was no story. Now-legendary publishers such as William Randolph Hearst and Joseph Pulitzer had to stand their ground in the face of considerable opposition from the entrenched interests of the day,permitting their reporters to publish and be damned. Only then could freedom of the press become a reality, not just a quaint constitutional aside.
Over the last century or so the honourable craft known as journalism has flourished, as newspapers and magazines have been joined by their electronic cousins, bringing news to the world on a minute by minute basis and demanding an increasing supply of journalistic talent to feed the insatiable media machine. The old six-monthly cycle of the Mercurius Gallobelgicus just might be a little too occasional for today’s 24-7 world.
As we lurch into the third millennium, the future of journalism is very much under debate – not because the profession is any less valued than before but rather because the traditional media on whose behalf journalists practise their trade are themselves under threat in this internet-changes-everything world.
Today’s audiences, with fingertip access to the news of the world from a million sources throughout the day, increasingly find evening television news bulletins irrelevant and out of date. Radio struggles to compete with the cult of the white earbuds. Newspapers, forced to migrate their content online, have yet to discover how to monetise their electronic outlets so as to earn the same revenues as their print editions. The writing is on the wall instead of in the paper.
At the same time, behold the rise and rise of citizen journalists. Unpaid, uncredentialled but on the spot, camera phones at the ready. When the bombs went off in London in July 2005, the BBC received 50 pictures from the public within the hour. Around 22,000 texts and e-mail messages poured in with personal testimonies on the first day. By the weekend the BBC had received 1,000 images and dozens of video clips sent by e-mail and direct from mobile phones.
When anyone can be a citizen journalist – thanks to blogs, podcasts, vcasts, YouTube and camera-phones – what future lies in store for journalism in general, and newspapers in particular?
Well, as we noted above, evolution is the order of the day. No doubt the grand and illustrious order of monks feared for their future when the damnable printing press made its debut, threatening to render intricate manuscripts redundant. And yet monks are still with us, their efforts turned to other enterprises.
As Fairfax Australasia’s CEO David Kirk noted in August last year, in his address to thePacific Area Newspaper Publishers’ Association (PANPA) conference, “Managing in a changing environment is about as endemic to media as you can get. The media industry is emblematic of change.
“In my business it’s very straightforward. There are two iron laws of media:Media always evolves. And audiences always fragment. Media, and the management of change are therefore synonymous. In the beginning, there was wireless. And now we have wireless back in a big way – except it carries broadband.
“If you have studied our industry, its history is a litany of change – of evolution and threat. Cinema was going to kill radio. Television was going to kill cinema. The VCR was going to kill television, Pay TV was going to kill television. DVDs were going to kill cinema and satellite radio is going to kill commercial radio. Now the internet is going to kill newspapers, ipods are killing radio … and the internet is also killing television.
“Media experts confidently predicted in the late 90s that newspapers would be banished to the memories of senior citizens and museums by the middle of this decade. Well it is now  and I would be very surprised if a number of you have not read a newspaper recently.
Even though we have suffered some loss of audience in print, more people are reading our content - in print and online – than ever before in our history.”
Which pretty much sums up why Rupert bought the Wall Street Journal. For the price he paid, we hope his copy included a colour magazine insert