Newscorp optimistic about iPad/Paywalls…halves salaries

I haven’t written about paywalls for a while. After ‘the big debate’ and accusations of stealing content to web-aggregators like Google companies have started to experiment with the concept,  with mixed success. One of the biggest supporters of paid-for content has always been Rupert Murdoch, chairman of Newscorp. He was the one that used the strongest language in condemning Google and others for ‘stealing’ content.

At the time he was already running a succesfull paid model with the Wall Street Journal (WSJ). Many argued though that the WSJ, and the Financial Times (FT)could run successful paid-for models because the content they were publishing was unique and ‘monetizable’ by companies, i.e. companies could make more informed decisions based on the information in these papers. These same commentators said that this would be difficult, if not impossible to replicate for content that was freely available elsewhere.

Now that the company has gone ahead it has commented in ‘the australian’ newspaper (owned by Newscorp) on the initial feedback:

“Initial expectations that (Apple) would sell a few million (iPads) will fall way short of the mark,” Mr Murdoch said. “It looks like they will sell around 15 million iPads this calendar year and more than 40 million by 2012. “And the iPad is just one of many tablet or slate computers in the pipeline. News Corp fully intends to be across all those platforms too. “As you know, we are rolling out a paid content strategy across our newspaper websites. Already The Wall Street Journal is the largest of its kind in the world with 1.1 million paying subscribers online.

In the meantime though the company has felt the pain of declining print revenues and a problematic revenue model online and has started to cut cost, halving the salaries of some of its top management:

News Corp.’s stock has dropped 16 percent in the past five years, steeper than the 9.5 percent decline for the Standard & Poor’s 500 Index. In today’s filing, the board’s compensation committee said the performance-based stock awards are designed to align top executives’ interests with shareholders. Carey, who’s also deputy chairman and rejoined the company a year ago, had his annual base salary cut in half to $4.05 million to shift more of total compensation to a potential cash bonus. He’ll be eligible for a target bonus of $10 million in fiscal 2011 with a maximum opportunity for $20 million.

Will the paid-or model be a success? I’ll keep following the news of both the supporters as well as sources that believe it will be impossible to monetize.

Marco | Editor

Editor at large and founder of a bunch of stockphoto businesses

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