Rupert Murdoch
    (Source from News Corporation  - New-York)

    Thank you very much, Rick for that kind introduction.

    When a newspaper proprietor faces this many editors
    in one room, usually it means only one thing: a demand
    for a pay increase.

    But as I stand before this esteemed group of editors
    today, I’m reminded of something Mark Twain once
    wrote to a friend:

    “How often we recall, with regret, that napoleon once
    shot at a magazine editor and missed him and killed
    a publisher……. But we remember with charity, that his intentions were good.”

    Ladies and gentlemen, I come before you today with the best of intentions. My subject is one near and
    dear to all of us: the role of newspapers in this digital age.

    Scarcely a day goes by without some claim that new technologies are fast writing newsprint’s obituary.
    Yet, as anindustry, many of us have been remarkably, unaccountably complacent. Certainly,
    I didn’t do as much as I should have after all the excitement of the late 1990’s. I suspect many of
    you in this room did the same, quietly hoping that this thing called the digital revolution would just limp
    along.

    Well it hasn’t … it won’t …. And it’s a fast developing reality we should grasp as a huge opportunity to
    improve our journalism and expand our reach.

    I come to this discussion not as an expert with all the answers, but as someone searching for answers
    to an emerging medium that is not my native language. Like many of you in this room, I’m a digital
    immigrant. I wasn’t weaned on the web, nor coddled on a computer. Instead, I grew up in a highly
    centralized world where news and information were tightly controlled by a few editors, who deemed
    to tell us what we could and should know. My two young daughters, on the other hand, will be digital
    natives. They’ll never know a world without ubiquitous broadband internet access.

    The peculiar challenge then, is for us digital immigrants – many of whom are in positions to determine
    how news is assembled and disseminated -- to apply a digital mindset to a new set of challenges.

    We need to realize that the next generation of people accessing news and information, whether
    from newspapers or any other source, have a different set of expectations about the kind of news they
    will get, including when and how they will get it, where they will get it from, and who they will get
    it from.

    Anyone who doubts this should read a recent report by the Carnegie Corporation about young people’s
    changing habits of news consumption and what they mean for the future of the news industry.

    According to this report, and I quote, “There’s a dramatic revolution taking place in the news business
    today, and it isn’t about TV anchor changes, scandals at storied newspapers or embedded reporters.
    ” The future course of news, says the study’s author, Merrill Brown, is being altered by
    technology-savvy young people no longer wedded to traditional news outlets or even accessing news
    in traditional ways.

    Instead, as the study illustrates, consumers between the ages of 18-34 are increasingly using the
    web as their medium of choice for news consumption. While local TV news remains the most accessed
    source of news, the internet, and more specifically, internet portals, are quickly becoming the favored
    destination for news among young consumers.

    44 percent of the study’s respondents said they use a portal at least once a day for news, as compared
    to just 19 percent who use a printed newspaper on a daily basis. More ominously, looking out three
    years, the study found that 39 percent expected to use the internet more to learn about the news,
    versus only 8 percent who expected to use traditional newspapers more.

    And their attitudes towards newspapers are especially alarming. Only 9 percent describe us as
    trustworthy, a scant 8 percent find us useful, and only 4 percent of respondents think we’re
    entertaining. Among major news sources, our beloved newspaper is the least likely to be the
    preferred choice for local, national or international news going forward.

    What is happening is, in short, a revolution in the way young people are accessing news. They
    don’t want to rely on the morning paper for their up-to-date information. They don’t want to rely
    on a god-like figure from above to tell them what’s important. And to carry the religion analogy
    a bit further, they certainly don’t want news presented as gospel.

    Instead, they want their news on demand, when it works for them.

    They want control over their media, instead of being controlled by it.

    They want to question, to probe, to offer a different angle. Think about how blogs and message
    boards revealed that Kryptonite bicycle locks were vulnerable to a Bic pen. Or the Swiftboat incident.
    Or the swift departure of Dan Rather from CBS. One commentator, Jeff Jarvis, puts it this way: give
    the people control of media, they will use it. Don’t give people control of media, and you will lose
    them.

    In the face of this revolution, however, we’ve been slow to react. We’ve sat by and watched while
    our newspapers have gradually lost circulation. We all know of great and expensive exceptions
    to this – but the technology is now moving much faster than in the past.

    Where four out of every five americans in 1964 read a paper every day, today, only half do.
    Among just younger readers, the numbers are even worse, as I’ve just shown.

    One writer, Philip Meyer, has even suggested in his book The Vanishing Newspaper that looking
    at today’s declining newspaper readership – and continuing that line, the last reader recycles the
    last printed paper in 2040 – April, 2040, to be exact.

    There are a number of reasons for our inertia in the face of this advance. First, newspapers as a
    medium for centuries enjoyed a virtual information monopoly – roughly from the birth of the printing
    press to the rise of radio. We never had a reason to second-guess what we were doing. Second,
    even after the advent of television, a slow but steady decline in readership was masked by population
    growth that kept circulations reasonably intact. Third, even after absolute circulations started to
    decline in the 1990s, profitability did not.

    But those days are gone. The trends are against us. Fast search engines and targeted advertising
    as well as editorial, all increase the electronic attractions by a factor of 3 or 4. And at least four
    billion dollars a year is going into R&D to further improve this process.

    So unless we awaken to these changes, which are quite different to those of 5 or 6 years ago, we
    will, as an industry, be relegated to the status of also-rans. But, properly done, they are an opportunity
    to actually improve our journalism and expand our reach.

    For those who are confronting this new reality, we tend to focus on the technological challenge,
    which is understandable, since it is one we believe – or hope – that we can do something about.

    Thinking back to the challenge that television posed to the newspaper business, we can see some
    similarities. A new technology comes along, and like many new things, it is somewhat exciting at first,
    simply by virtue of being new. Like the advent of radio before it, television was always going to be at
    best an alternative way to get the news, and at worst a direct competitor. There was no way to make
    it a part, or even a partner, of the paper.

    That is manifestly not true of the internet. And all of our papers are living proof. I venture to say that
    not one newspaper represented in this room lacks a website. Yet how many of us can honestly say
    that we are taking maximum advantage of those websites to serve our readers, to strengthen our
    businesses, or to meet head-on what readers increasingly say is important to them in receiving
    their news?

    Despite this, I’m still confident of our future, both in print and via electronic delivery platforms.
    The data may show that young people aren’t reading newspapers as much as their predecessors,
    but it doesn’t show they don’t want news. In fact, they want a lot of news, just faster news of a
    different kind and delivered in a different way.

    And we in this room – newspaper editors and journalists – are uniquely positioned to deliver that
    news. We have the experience, the brands, the resources, and the know-how to get it done.
    We have unique content to differentiate ourselves in a world where news is becoming increasingly
    commoditized. And most importantly, we have a great new partner to help us reach this
    new consumer -- the internet.

    The challenge, however, is to deliver that news in ways consumers want to receive it. Before we can
    apply our competitive advantages, we have to free our minds of our prejudices and predispositions,
    and start thinking like our newest consumers. In short, we have to answer this fundamental question:
    what do we – a bunch of digital immigrants -- need to do to be relevant to the digital natives?

    Probably, just watch our teenage kids.

    What do they want to know, and where will they go to get it?

    They want news on demand, continuously updated. They want a point of view about not just what
    happened, but why it happened.

    They want news that speaks to them personally, that affects their lives. They don’t just want to know
    how events in the Mid-east will affect the presidential election; they want to know what it will mean
    at the gas-pump. They don’t just want to know about terrorism, but what it means about the safety of
    their subway line, or whether they’ll be sent to Iraq. And they want the option to go out and get more
    information, or to seek a contrary point of view.

    And finally, they want to be able to use the information in a larger community – to talk about, to debate,
    to question, and even to meet the people who think about the world in similar or different ways.

    Our print versions can obviously satisfy many of these needs, and we at news corporation will continue
    to invest in our printed papers so they remain an important part of our reader’s daily lives. But our
    internet versions can do even more, especially in providing virtual communities for our readers to be
    linked to other sources of information, other opinions, other like-minded people.

    And to do that, we must challenge – and reformulate -- the conventions that so far have driven our
    online efforts.

    At News Corporation, we have a history of challenging media orthodoxies. Nearly twenty years ago,
    we created a fourth broadcast network. What was behind that creation was a fundamental questioning
    of the way people got their nightly entertainment to that point. We weren’t constrained by the news
    at six, primetime at eight, news again at 11 paradigm. We weren’t constrained by the belief that
    entertainment had to be geared to a particular audience, or reflect a certain mind-set.

    Instead, we shortened the primetime block to two hours, pushed up the news by an hour, and
    programmed the network to a younger-skewing audience. The result was the FOX Broadcast Network,
    today America’s number one network among 18-49 year-olds.

    Similarly, we sensed ten years ago that people watching television news felt alienated by the
    monolithic presentation of the news they were getting from the nightly news broadcasts or cable
    networks. We sensed that there was another way we could deliver that news – objectively, fairly,
    and faster-paced. And the result was the fox news channel, today America’s number one cable
    news network.

    And most recently, at the The Times of London, circulation decline was immediately reversed when
    we moved from a broadsheet to what we call our “compact” edition. For nearly a year, we offered
    readers both versions: same newspaper, same stories, just different sizes. And they overwhelmingly
    chose the compact version as more convenient. This is an example of us listening to what our readers
    want, and then upsetting a centuries old tradition to give them exactly what they were asking for.
    And we did it all without compromising the quality of our product.

    In this spirit, we’re now turning to the internet. Today, the newspaper is just a paper. Tomorrow,
    it can be a destination.

    Today, to the extent anyone is a destination, it’s the internet portals: the Yahoos, Googles, and MSNs.
    I just saw a report that showed Google News’s traffic increased 90 percent over the past year while
    the New York Times’ excellent website traffic decreased 23 percent. The challenge for us – for each
    of us in this room – is to create an internet presence that is compelling enough for users to make us
    their home page. Just as people traditionally started their day with coffee and the newspaper, in the
    future, our hope should be that for those who start their day online, it will be with coffee and our
    website.

    To do this, though, we have to refashion what our web presence is. It can’t just be what it too often
    is today: a bland repurposing of our print content. Instead, it will need to offer compelling and
    relevant content. Deep, deep local news. Relevant national and international news.
    Commentary and debate. Gossip and humor.

    Some newspapers will invest sufficient resources to continuously update the news, because digital
    natives don’t just check the news in the morning – they check it throughout the day. If my child played
    a little league baseball game in the morning, it would be great to be able to access the paper’s website
    in the afternoon to get a summary of her game, maybe even accompanied by video highlights.

    But our internet site will have to do still more to be competitive. For some, it may have to become
    the place for conversation. The digital native doesn’t send a letter to the editor anymore.
    She goes online, and starts a blog. We need to be the destination for those bloggers. We need to
    encourage readers to think of the web as the place to go to engage our reporters and editors in more
    extended discussions about the way a particular story was reported or researched or presented.

    At the same time, we may want to experiment with the concept of using bloggers to supplement
    our daily coverage of news on the net. There are of course inherent risks in this strategy -- chief
    among them maintaining our standards for accuracy and reliability. Plainly, we can’t vouch for the
    quality of people who aren’t regularly employed by us – and bloggers could only add to the work
    done by our reporters, not replace them. But they may still serve a valuable purpose; broadening our
    coverage of the news; giving us new and fresh perspectives to issues; deepening our relationship
    to the communities we serve, so long as our readers understand the clear distinction between
    bloggers and our journalists.

    To carry this one step further, some digital natives do even more than blog with text – they are
    blogging with audio, specifically through the rise of podcasting – and to remain fully competitive,
    some may want to consider providing a place for that as well.

    And with the growing proliferation of broadband, the emphasis online is shifting from text only to
    text with video. The future is soon upon us in this regard. Google and Yahoo already are testing video
    search while other established cable brands, including FOX News, are accompanying their text news
    stories with video clips.

    What this means for us as newspapers is the opportunity to partner with credible video programmers
    to provide an infinitely better product. More access to news; more visually entertaining news and
    advertising product; deeper and more penetrating coverage.

    At News Corporation, where we’re both a video programmer as well as a newspaper publisher,
    the rewards of getting this right are enormous. We’ve spent billions of dollars developing unique sports,
    news and general entertainment programming. We have a library as rich as anyone in this world.
    Our job now is to bring this content profitably into the broadband world – to marry our video to our
    publishing assets, and to garner our fair share – hopefully more than our fair share -- of the
    advertising dollars that will come from successfully converging these media.

    Someone whom I respect a great deal, Bill Gates, said recently that the internet would attract
    $30 billion in advertising revenue annually within the next three years. To give you some perspective,
    this would equal the entire advertising revenue currently generated each year by the newspaper
    industry as a whole. Of course, all of this could not be new money. Whether Bill’s math is right is
    almost beside the point. What is indisputable is the fact that more and more advertising dollars
    are going on-line, and we must be in a position to capture our fair share.

    The threat of losing print advertising dollars to online media is very real. In fact, it’s already
    happening, particularly in classifieds. No one in this room is oblivious to it. Television and radio
    and the yellow pages are in the same spot.

    In the same way we need to be relevant to our readers, the internet provides the opportunity for
    us to be more relevant to our advertisers. Plainly, the internet allows us to be more granular in
    our advertising, targeting potential consumers based on where they’ve surfed and what products
    they’ve bought. The ability to more precisely target customers using technology- powered forms of
    advertising represents a great opportunity for us to maintain and even grow market share and is
    clearly the future of advertising.

    And the history of our industry shows that we can do this. Technology has traditionally been an asset
    to the newspaper business. It has in the past allowed us to improve our printing, helped us collect and
    transmit the news faster and cheaper – as well as reach people we never could reach before. So of all
    the trials that face newspapers in the 21st century, I fear technology – and our response to it – is by
    no means our only challenge.

    What I worry about much more is our ability to make the necessary cultural changes to meet the new
    demands. As I said earlier, what is required is a complete transformation of the way we think about
    our product. Unfortunately, however, I believe too many of us editors and reporters are out of touch
    with our readers. Too often, the question we ask is “Do we have the story? rather than “Does anyone
    want the story?”

    And the data support this unpleasant truth. Studies show we’re in an odd position: we’re more trusted
    by the people who aren’t reading us. And when you ask journalists what they think about their readers,
    the picture grows darker. According to one recent study, the percentage of national journalists who
    have a great deal of confidence in the ability of the American public to make good decisions has
    declined by more than 20 points since 1999. Perhaps this reflects their personal politics and
    personal prejudices more than anything else, but it is disturbing.

    This is a polite way of saying that reporters and editors think their readers are stupid. In any business,
    such an attitude toward one’s customers would not be healthy. But in the newspaper business,
    where we rely on people to come back to us each day, it will be disastrous if not addressed.

    As one study said: “Even if the economics of journalism work themselves out, how can journalists
    work on behalf of a public they are coming to see as less wise and less able?”

    I’d put it more dramatically: newspapers whose employees look down on their readers can have
    no hope of ever succeeding as a business.

    But by meeting the challenges I’ve raised, I’m confident we will not only improve our chances
    for success in the online world, but as importantly, improve our actual printed newspapers.

    Success in the online world will, I think, beget greater success in the printed medium. By streamlining
    our operations and becoming more nimble. By changing the way we write and edit stories. By listening
    more intently to our readers.

    I do not underestimate the tests before us. We may never become true digital natives, but we can and
    must begin to assimilate to their culture and way of thinking. It is a monumental, once-in-a-generation
    opportunity, but it is also an exciting one, because if we’re successful, our industry has the potential to
    reshape itself, and to be healthier than  ever before.

    Thank you very much.

LeStudio1.com
Rupert Murdoch (Photo Wired Magazine)

Speech by Rupert Murdoch
to the American Society of
Newspaper Editors

April 13, 2005
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