4 October 2010
“Rupert Murdoch has bigger balls than you Lawrence.”
That was a comment from Nick Jaspen from How-Do the great online resource that keeps Manchester upto date with the latest business news and current affairs.
I had described Murdoch as a dinosaur at a round table event held at UKFast. It wasn’t meant in a derogatory way at all. Find me a man who didn’t love dinosaurs as a kid. They were incredible species. The biggest, the best, the fastest, the most aggressive, they were just awesome in every way. Then one day, poof, they are gone. All we are left with are memories from people who have picked up the pieces of times gone by.
There is no doubting Rupert Murdochs achievements, but I still feel my analogy is a good one back in March or April this year. And actually now I have had time to sit on the sidelines and analyse the results, Murdoch has huge courage. I think in this case he is making a dramatic mistake and I stand by my prediction, that “Paywalls” and forcing people to pay for news simply wont work.
Sitting listening to Ross Warburton at an event recently, talking about the history of his family business, I understood completely. “you need someone to hate,” he said. I translated this as you need someone to compete with.
We all have our own axe to grind. A competitor who is so good they challenge your standards at every turn. This is a healthy form of competition in my eyes, and “hate” isn’t a word I’d use to describe my competitors. As a former boxer, I have had a few eye opening experiences in the ring, quite literally. The first thing you learn is to respect your opponent.
I have never hated an opponent, I was taught by my coach Master Chang when I switched to Thai Boxing that “hate clouds judgement,” and reading between the lines of Ross Warburton’s message I am sure he is referring to the same respect you’d see between 2 heavyweight bread-winners.
So who do you compete with? And is competing with your competitor the right course of action? I believe you need to be constantly looking for inspiration. If you are lucky enough to have a great opponent as a competitor, then yes you should not ignore this opportunity to learn and better yourself and your business. At the same time you really want to compete at the highest level, the question is not “how do I compete with them” its more along the lines of “what do I need to create an environment where the entire market looks to you for the answers?”
I think this is where Murdoch previously has been a master. Like Ross Warburton, he stepped into a family business. His father Sir Keith Murdoch was a highly successful regional newspaper magnate based out of Melbourne. Murdoch was groomed by his father from an early age, and went off to study philosophy, politics and economics at Oxford University in England.
When Rupert was 22, his father died, prompting his return from Oxford to take charge of the family business; becoming managing director of News Limited in 1953.
Heading all over the globe Murdoch had competitors of great stature in every area. Yet it is safe to say he shaped and conquered the world of TV and News, globally.
But suddenly, the world is changing very quickly and the Internet is dominating the fastest growing revolution I have ever witnessed in my lifetime.
So who does Murdoch compete with now? Online, there are bigger fish. There is Google and a hundred other sites popping up unpredictably every week. In fact, Murdoch will be the first to admit he sat on the side lines for years confident that things would never take off to the extent they have, and the highly paid consultants predicted the growth of the internet would never affect the readership of newspapers. A great many awesome newspapers were taken by surprise by this phenomenon, so he was not alone with this prediction.
So who does Murdoch take on? Google?
This is where I think the mistake is made. Instead of plotting a course for something that is tried and tested, where victory results in a worthwhile prize, I believe Murdoch’s chosen the wrong opponent. He is competing with culture.
What do I mean by this? Well, with the Timesonline.co.uk business model, they chose to put their news behind a username and a password, in order to charge money for the news.
This was a pricipal too, the revenue was NOT an essential part of the equation. Especially as the online revenue for a massive site will soon outweigh TV commercial prices. That’s my prediction.
Back to my prediction of earlier this year. I explained at the round table discussion, that people will simply go and find the news elsewhere. The BBC, there is no point me listing them, there are hundreds of alternatives. These days, we are fed news not just at home, but to our phones and it is litterally in our faces at every step of any journey. News will not stop. Humans are naturally inquisitive so they will always want news, but there are also resourceful and if something is free and easily accessible, people will vote with their feet. Or in this case their mouse.
Below is the graph that shows the decline in traffic to the timesonline.co.uk website. And although they are putting on a brave face, advertisers who can now track every customer from every marketing campaign on every site will soon learn that lower numbers (although not publically available to the general public) will translate in lower conversions and consequently less business generated per pound spent.
Three guesses when they switched on the pay-wall. So yes, Nick, Murdoch has massive courage I grant you that, but I also hope he has massive ears too, because it is not too late to save this great business. By frightening away your existing loyal customers, you are training them to find their news elsewhere. If things don’t revert back soon, I fear that this great institution will be the victim of an experiment that went horribly wrong.
As a businessman, I’d rather my adverts were seen by 200,000 people, as opposed to 20,000 passionate (crazy) fans.
Whatever the size of your business, big or very small, listen to your customers at every opportunity. If you are prepared to ignore 90% of your customers it is safe to say you will experience trouble ahead.
The jury is out on this one. One thing is certain, Murdoch has deep pockets and an awesome track record so he has plenty rope to play with. But choosing where to focus your attention both as a business person or a person with in a business, will determine the level of your success.