Billionaires don't get much cooler than Mark Cuban or News Corp.'s (NYSE:NWS) Rupert Murdoch. They're both larger than life, and they both know how to enjoy themselves.
However, I have to cut my praise short, because they're both on the wrong side of a battle against Google (NASDAQ:GOOG).
News Corp. has made it clear that it no longer wants to let Google cash in on the digital versions of its international newspapers as a news aggregator. It has already gone public with its plans to begin charging for a few digital versions.
Building tollbooths isn't enough, though. News Corp. may be ready to remove its sites from Google altogether.
"I think we will," Murdoch says in a Sky News interview this week, when asked whether News Corp. will simply stop Google from indexing its content. "That's when we start charging."
Getting Google to stop listing News Corp. content is easy. Simply updating files on its sites that grant or deny permission to web-crawling search engine bots will let the company keep Google out. Murdoch thinks News Corp. will be better off that way. He would rather serve a smaller loyal audience than attract any incremental drive-by traffic Google might deliver.
Cuban thinks charging for digital content is also the future. He also applauds Murdoch's move to kiss off Google indexing. But he makes a head-scratching suggestion that Twitter could be News Corp.'s savior.
Living through another Cuban
Cuban's latest blog entry is a whopper. He writes that he loves to "tweak" the "bigots" who say that all Internet information must be free.
Well, I don't lump myself in that group. I don't see anything wrong with premium subscription models, and News Corp. certainly excels there, with its online versions of Barron's and The Wall Street Journal. However, those are investment-based publications, for which market watchers are willing to pay a little money to discover ways to earn more. Where's the financial payoff in subscribing to the digital version of a local newspaper, beyond the same sort of leisurely knowledge absorption that will always be available for free from a wide variety of sources?
Cuban thinks Google is becoming less necessary as a lead provider, since Twitter is breaking real-time news. Does Cuban really think a shortened link to one of Murdoch's publications from Twitter is superior to free traffic from Google News?
Murdoch probably hates Twitter even more than he hates Google, because it spills the beans -- in 140 characters or fewer -- and probably delivers traffic that's even less likely to convert into paying subscribers.
Stop the depressed
Premium subscription models aren't dead:
- Less than 7% of the unique monthly visitors at commercial real estate site LoopNet (NASDAQ:LOOP) are paying members, yet those fees make up more than half of the site's total revenue.
- Membership revenue accounts for 88% of the revenue mix at Chinese investing-research specialist China Finance Online (NASDAQ:JRJC). Less than 1% of the company's registered users are premium subscribers.
- Domestically, financial sites Morningstar (NASDAQ:MORN) and TheStreet.com (NASDAQ:TSCM) also lean heavily on their subscribing minorities.
Again, these are areas where subscribing pays off for users. But who wants to pay to read a movie review -- no matter how well it's written -- when Facebook, Netflix (NASDAQ:NFLX), or even News Corp.'s own Rotten Tomatoes critic-aggregator site can deliver a critique that's either more democratic, or more in tune with your tastes?
Murdoch may think his newspaper brands and editorial staffs deserve an authoritative premium, but even he acknowledges that their relevance is fading.
"It's hard to find people under 30 who buy a newspaper," he says in the interview, which I was able to stream, ironically enough, because the partly News Corp.-owned Sky News Australia posted it on its official YouTube channel.
So folks who don't pay for a newspaper will pay for a digital one? And the key to making more money is to reach fewer people, ignoring the incremental traffic delivered by the world's most popular search engine along the way?
It's hard not to bury the lede when it's surrounded by conflicting debris.
