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Friday 18 Aug 2017 | 13:30 | SYDNEY

Where Murdoch goes, will others follow?

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11 August 2009 09:29

Tyler Cowen at Marginal Revolution makes a point that's been nagging away at me since hearing the news that Rupert Murdoch intends to charge people for News Limited's online content: the potential for collusion.

Famously, the New York Times tried a limited pay-for-online-content model a few years ago and abandoned it. Business-focused outlets like the Wall Street Journal and the Australian Financial Review continue to do it, but most pundits reckon it only works in those niche news areas. For general news, people will just gravitate to the free content, as the New York Times found out.

But what if News Limited is big enough that, just by example rather than explicit collusion, it convinces others to adopt a similar model? If all the major outlets charge similar prices for content, none need worry about losing customers to free competitors — it's a closed loop.

Discussing this with a colleague yesterday, he saw a couple of holes in the theory. One is the public broadcasters, which will never charge for content so would be the big winners from a broad industry move to a paid subscriber model. Two, media barrons aren't in it solely for the money. They like having influence, and although they could make more money from 10,000 paying online readers than 1 million who pay nothing, which one gives them more political heft?

I can think of a third objection: the soft or implicit collusion described here can work if the entry barriers to the industry are high. But anyone with a laptop and a modem can practise online journalism.

Photo by Flickr user dfarber, used under a Creative commons license.

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