Telenor's - Ericsson

Murdoch was able to think around the dominant
free TV paradigm and came up with an incredibly
robust pay-TV model.
a mass of strategically critical competencies
relating to individual billing and charging.
The media is still in mourning for the demise
of the advertising-funded model, and hasn’t
quite realized what it really needs to be doing.
All that most media companies have right
now is their control of this ethereal realm of
creating content. That said, the media hold a
tremendous card in their ability to manage this
black art. It’s an expertise not so easily learned
or acquired, since so much content relies on
loose coalitions of freelancers that require
know-how and connections to manage.
What about the iPad as a bridge? Rupert
Murdoch seems to think it could save the
traditional print businesses.
Murdoch is trying through sheer force of
will to influence the emerging business model
for newspapers, which are caught in a vice
between falling per copy sales, the migration
of classified advertising to the web, and an
oversupply of news on the web.
I believe Murdoch’s response to the iPad
is driven by two things: a huge emotional attachment
to the newspaper industry; and the
fact that his broadcast networks have mastered
pay-tv business models to a degree no
other organization has managed. Look at just
about any pay-tv platform in Europe, and
they are all clones of Murdoch’s Sky – in most
cases rather imperfect clones.
MURDOCH SIMPLY DOESN’T accept that News
International’s content should be available
free on the internet. I guess his hope is that
if the iPad becomes as popular as the iPhone
this will provide a mass-market platform for
selling newspaper content, as the iPad offers
two new revenue sources: subscription and
paying for the app.
However Enders Analysis in the uk has
estimated that even if newspapers migrate
every print reader to paying online, they will
still make large losses. Annual income per
paywall subscriber on thetimes.co.uk and
wsj.com is just a quarter of the income the
company gets from subscribers to the papers’
print editions. Switching off the presses,
after a hypothetical future print-to-digital
tipping point, might save newspapers 25
percent of their total costs, but this is not
enough to make up the gap from the smaller
online income. Even adding iPad income
to web paywall revenue would only total half
the income newspapers are currently making
from print.
Murdoch was able to think around the
dominant free tv paradigm and come up
with an incredibly robust pay-tv model.
This has many interesting dimensions, such
as prioritizing technology over content,
understanding the power of killer content
to drive uptake, and giving away hardware
REVENUE LOSS – EVEN FASTER THAN EXPECTED
Projected 2009
Actual 2009
Internet access
TV subscriptions and license fees
Internet advertising
Filmed entertainment
Video games
Consumer and educational books
Recorded music
Radio
TV advertising
Business-to-business
Consumer magazine publishing
Newspaper publishing
Out-of-home
-15 -10 -5 0 5 10
% Growth
Most traditional media outlets lost revenue even faster than expected in 2009, according to PricewaterhouseCoopers,
with radio, newspapers, consumer magazines and out-of-home advertising suff ering
the most. Meanwhile, most digital media categories grew faster than predicted, highlighted by an
unexpected 4 percent rise in internet advertising. Source: PriceWaterhouseCoopers
EBR #3 2010 15