Wednesday, October 07, 2009

The Murdoch strategy:

In a wide-ranging essay on Rupert Murdoch and his attempt to charge for content on the web, this excerpt:
Murdoch is not a modern marketer. He runs his business not on the basis of giving the consumer what he wants but through more old-fashioned methods of structural market domination. His world, and training ground, is the world of the newspaper war—a zero-sum game, where you wrestle market share from the other guy. Curiously, his newspaper battles have most often involved cutting prices rather than, as he now proposes to do on the Internet, raising them. (...)

But more than being about cost, his strategy is about pain. What he is always doing is demonstrating a level of strength and will and resolve against which the other guys, the weaker guys, cower. He can take more pain than anybody else.
That's not going to work against the Internet. There is no "other guy" to outlast, such as is found in a single metro area with a competing newspaper. (Also, with the Internet, Murdoch can't control distribution, his other strategy in media battles.)

Murdoch can't really believe that if he holds fast to charging for content, that he will undercut the (virtual) cross-town paper and ride to victory. Or maybe he does.


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