Bad news, Rupert

While Rupert Murdoch is strutting around the world stage reading the riot act to anyone who threatens the profits of his giant properties, he has no idea how irrelevant and out of touch he appears.
More confirmation today, with online measurement company Nielsen, reporting that online news sites aspiring to charge end-users for news will probably not succeed. Now Murdoch is already working on ways to lock up his online content.

But according to Nielsen the lack of loyalty among Australian consumers to any one news provider, will mean any site that does this could become very niche and eventually irrelevant.

Nielsen says nearly three-quarters (71%) of visitors to Fairfax Digital Media’s news websites in September 2009 also visit News Digital Media. About 69% of visitors to ninemsn’s National Nine News website also visited news websites of Fairfax Digital Media.

“Traditionally, newspapers gave rise to strong brand loyalty among their readership, and a person who spent their money buying the Sydney Morning Herald was unlikely to also buy The Daily Telegraph and vice versa,” says Mark Higginson, Director of Analytics, Nielsen. “However, this model has definitely not been replicated in the online space.”

He says consumers of news are not brand loyal. What they are interested in is the timeliness of breaking news, multiple opinions and reporting on news events.

The result? A very high overlap of audience between the news publishers in Australia.

So the first mover who introduces paid content will simply be taken off the favourite list as consumers look to other sites for their news.

The second plank of Murdoch’s new strategy has been to charge aggregators for re-purposed content.

But again Nielsen says the horse has bolted. This approach ignores citizen journalists who uses blogs and other consumer-generated media and which has de-centralised the flow of information away from the traditional media empires.

Nielsen data reveals that in Australia, more than four in five internet users (86%) engaged in user-generated content consumption and, of those people, 60% (6.8 million) read blogs, which was up from just 48% in the previous 12 months.

You can almost hear Rupert snorting. That’s not journalism, he would say. People will always be loyal to reputable sites… like News for instance.

But the report found the key drivers of growth in consumer generated media were trust-related – of the 6.8 million Australians reading blogs, 68% cited independent sources of news as more interesting to read than traditional news websites and 53% said blogs provided a more independent source of news.

In fact, it was traditional news sites that are under scrutiny. More than half of Australian blog readers (53%) felt that news websites were more likely to be funded and influenced by advertising.

“Acquisition of news information from non-traditional sources is clearly an area of rapid growth,” says Higginson.

So with consumers increasingly turning to citizen journalists for interesting and independent points of view in addition to using more traditional news sources, the paid online content strategy simply doesn’t make sense.

But Rupert can’t afford to see that.