Good Strategy + Time = Bad Strategy?

In recent months Rupert Murdoch has been trying to find a way to make money from the online versions of his newspapers.  The reason, of course, is that News Corp are no longer making any real money from the print versions.

You and I are both part of Murdoch’s problem.  The more we read our news online, and the more we seek the opinions of bloggers instead of leader writers, the less money Murdoch makes out of us.  Murdoch has fingers in many pies, and he no longer needs newspapers to make his money.  But newspaper ownership is in his blood – he inherited the Adelaide News from his father – so it’s hardly surprising that he wants that side of his business to survive and thrive even in difficult times.

In the developed world, the newspaper industry has been in decline for many decades.  Technology actually saved the industry once – in the 1980s the typesetting and printing process was computerised, helping to bring many titles back into profit.  But now, of course, the rise of the internet is a real threat to the future of the printed newspaper.  People no longer have to pay for news and opinions, and the print barons are casting around for a remedy.

In Britain this desperation has become more and more obvious.  Back in August, James Murdoch (Rupert’s son and probable successor) used the high-profile MacTaggart Lecture to launch a sustained attack on the BBC, and in particular the extensive, free-of-charge, provision of news content on www.bbc.co.uk.  To him, the BBC is an “unaccountable institution” which “threatens significant damage to the provision of independent news, investment in professional journalism, and the innovation and growth of the creative industries.” 

Wee Jimmy certainly has a point.  The BBC is a public sector organisation competing in the private sector.  It has a guaranteed income funded by British tax payers, and the ways in which it spends this income can distort the free market.  Without the BBC, perhaps other providers would by now be able to charge for online news provision – which is what News Corp want to do.

But on the other hand, the Murdochs are surely barking up the wrong tree if they think the BBC is the root of all their problems.  If the BBC wasn’t providing free news content, someone else would.  Now that the internet exists, it can’t be uninvented, and it’s likely that there will always be someone willing to publish the news online for free, if only for advertising revenue.

Perhaps it’s time the press barons recognised reality and stopped trying to make money from their papers.  There are industries where company owners don’t expect to make money but still get involved.  There are other rewards available in these industries – perhaps a higher public profile or the hope of increasing their power and influence, perhaps simply fun.   Football team ownership is an obvious example.  Perhaps in future Murdoch should view The Times and his other titles in the same way as Roman Abramovich treats Chelsea FC – as a vanity project with benefits.

We study the issue of Strategy over time in Module 9 (Management of Change) of the Mini-MBA.