Murdoch's ultimatum to Amazon: Give us Kindle subscriber names or else
From Daily Finance: Murdoch's ultimatum to Amazon: Give us Kindle subscriber names or else
I had seen reference to this story a day or so ago, and didn't have the time to read it. But I ran across it again in the Twitter stream and clicked through to answer my curiosity... What makes Rupert Murdoch think that Amazon owes him the names of any Kindle users?
On News Corp.'s fiscal-year-end earnings call with analysts, the notoriously shoot-from-the-hip mogul suggested that The Wall Street Journal will cease to be available on the Kindle e-reader unless Amazon starts offering a more generous revenue split and more publisher-friendly policies.
Murdoch acknowledged that the Journal recently negotiated a slightly larger share of the revenues Amazon gets from selling Kindle subscriptions to the paper, "but it's not a big number, and we're not encouraging it at all because we don't get the names of the subscribers," he said. "Kindle treats them as their subscribers, not as ours, and I think that will eventually cause a break with us."
Ah... so Murdoch wants the name of Kindle subscribers to the WSJ. That narrows down the headline a bit, and makes a bit more sense when viewed that way. I'm guessing when you purchase a subscription to a magazine using Amazon's website, the actual order is fulfilled by the company who owns the magazine, and hence they have your name. If that's the case, I could see where a publisher like News Corp. would figure they own the subscription, not the group who makes the paper the content is viewed upon.
I could be convinced the Kindle's subscription model is different, and that Amazon owns the subscriber instead of News Corp. It's a bit of a new model, and I'm not sure which old school or new school mindset would prevail.
But setting that aside, here's the quote I found fascinating...
"As I've said before, the traditional business model has to change rapidly to ensure that our journalistic businesses can return to their old margins of profitability," Murdoch said. "Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting."
"Tradition needs to change to get back to owning the news and making money."
So what does he want to do? Start providing a chargeback system on sites that provide content. Make sure all content is locked behind glass. You go ahead and deploy that model on electronic web-based fee-for-reading, Mr. Murdoch. I'm sure you'll have the "right answers" to return to the good old days of large margin of profitability. Never mind that few (any?) sites have successfully pulled that off, and that you don't have a monopoly on the news. People will just go elsewhere to get the news. And given your particular editorial slant on things, I might also venture to say that's a good thing!
And this "return(ing) to their old margins of profitability"... You have GOT to be kidding me. I'm sure buggywhip makers wanted to return to their old margins of profitability when the automobile started to catch one. I'm sure computer makers would like to return to old margins of profitability that they used to have in the 80's and 90's. Car makers? You have only to read the newspaper to see their desire to return to old margins.
Yes, Mr. Murdoch, your business model DOES need to change in order to not collapse completely. As it stands right now, you're in danger of becoming completely irrelevant in the online world. But changing the model by charging for things others give away for free is NOT the answer. It's been tried. It has failed. The world where you made your fortune is dead and gone. You're going to need a LOT of help to figure out how to make it all work in a world you're not familiar with or comfortable in.