Murdoch Makes His First Digital Mistake

Rupert Murdoch is clearly the smartest "old media" CEO out there. He’s run News Corp like the entrepreneur he is, by taking big risks and generally having them pay off. His buy of myspace for $500mm may go down as one of the best online buys ever and myspace seems to be solidly established as the low brow social net of choice. It fits perfectly with Murdoch’s taste in media. If Facebook is the New York Times, then myspace is the NY Post.

I was very hopeful that Murdoch’s buy of the Wall Street Journal would lead to the elimination of the one thing that is holding back the WSJ in the online world – the subscription requirement. But at Davos this week, Murdoch apparently said that the WSJ would greatly expand its free content, but that the subcription will remain and will be expanded to include new features and that subscription prices will increase. That reminds me of the NY Times’ ill fated experiment with Times Select which they finally walked away from this year.

Here’s the deal. Digital media is not about scarcity and never will be. That’s the old media game. Online it’s about ubiquity, about being part of the conversation, about links, authority, page rank, and if you are a news organization like the WSJ – its about anchoring the discussion.

The other day I wanted to find Jim Cramer’s column about the threat of a deflationary spiral. I wanted to blog about it and link to it. Then I found out that Jim’s column was at Real Money, Jim’s subscription blog. I ditched that plan and went with another story to make my point. Jim’s story was useless to me. I signed off on Real Money when I was the Chairman of TheStreet.com. I regret the mistakes we made at TheStreet.com with a paid content strategy and I learned from it. Never again.

Rupert will learn that lesson too. Apparently the hard way.