Murdoch's plan doesn't come together

Not long after Murdoch announced his intentions to charge for content, his evening freesheet, The London Paper, closes.

Despite maintaining a regular circulation of half a million, the afternoon free newspaper was making considerable losses of around £16million year after year and the decision to close was announced yesterday.

High operating costs and a competitive marketplace have made survival difficult for the London Paper and London Lite, and are quoted as the reason for the closure, although speculation is that this is first blood from Murdoch’s ambitious scheme to charge for all content across the News International portfolio.

Furthermore, it looks likely that Murdoch will be flexing his considerable media muscles to persuade other titles to follow suit, to fireproof his controversial move. The real stumbling block though, will be the BBC.

Whilst this does not signal the end of free media and content, it does illustrate the fact that content providers are going to have to work hard to invent more revenue channels, without ruining the reader’s experience.

Chris Anderson, author of ‘Free’ and editor in chief of Wired magazine, talks about this three-party system. In this he notes that ‘a third party pays to participate in a market created by a free exchange between the first two parties.’ In essence, the London Paper is not selling papers to readers, but readers to advertisers.

The issue is that they are not generating enough revenue through selling traditional advertising space. Rather than ditch the brand, they should be looking at other non-traditional ways to fund the enterprise.

Ed