Thursday, November 26, 2009

Rupert tries to Bill Microsoft

I am intrigued by Rupert Murdoch's negotiations with Microsoft. Now Rupe's track record in business is somewhat stronger than mine, but what I see here is a guy hell-bent on converting content to cash negotiating with an organisation equally desperate to sting Google with Bing.

That Microsoft would consider paying for 'exclusive' news content to trump the world's most successful search engine is curious, when it is more than likely that consumers will continue to use Google to track news from publishers still willing to churn out free content.  The strategy from Bing's perspective is not compelling.

You've got to ask how two aggregators of content, News Corp and Microsoft, can add value to each others' business. I suppose Rupe thinks that if Bill G's outfit is willing to pay for content, then it matters not how Microsoft intends to recoup its outlay through Bing.  But if News wants to distribute content through user-pays channels, surely it is better to forge alliances with distributors - telcos .

Rupe could negotiate with telcos for a share of the mobile download charges. Mobile communications are the way of the future. Cloud, voice recognition and other technologies will ultimately make the traditional desktop PC redundant.

This would really be charging for content by stealth, but it capitalises on what never ceases to amaze me - consumer willingness to pay for almost anything they get on a mobile device. Compare this with consumer resistance to paying for content via a PC, and the psychology just doesn't add up. Perhaps it's convenience. Perhaps it's because the phone user often doesn't end up paying - the cash cows being either parents or employer.

The bonus of the mobile distribution  idea is that it piggy backs on telco systems, which can already track the downloads and collect and allocate the revenue to content providers.

But Rupe and his troops should know this. They already have the model for it - pay television.

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