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The Roundup August 11

You don’t become a billionaire by thinking “free” is a great way to make money.

“Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting,” Murdoch said during a call with analysts and reporters. The Wall Street Journal, which he owns, is one of the very few news operations to charge users to see its content online. Now he wants to put all his sites — News Corp. is the biggest producer of news in the English-speaking world — behind a pay wall. That includes the online output of papers that run the spectrum of quality all the way from the snobby Times of London to the grubby New York Post, not to mention broadcaster Fox News Channel (FNC). . . .

He made the announcement while discussing News Corp.’s dire year-end results: his empire took a stinging $203 million loss in the fourth quarter, and operating income was down 30% for the year. All in all, the company swung from a $5.34 billion profit the year before to a $3.38 billion loss in the fiscal year that just ended.

(“Will Rupert Murdoch Be the Pied Piper of Paid Content?,” Time, August 11) This smacks of desperation all the way around. I have only one word in response: “Netscape.” Turning the pages of ancient history back to 1996, when Netscape owned the browser market (over 75% share), Internet Explorer was a poor imitation, Opera was actually a player, and even Lynx — stripped-down, amber-screen Lynx — commanded over 5% of the market. Some bright bunny at Netscape thought, “Look at our market share! We should charge for our browser!” A whopping 39 dollars, no less. “Who cares if everyone else is giving their browser away?” Well, customers cared. Fast forward six months and Internet Explorer has taken the majority of market share and Netscape starts its long journey to join Lynx in the annals of the lost and the forgotten. In the area of news and opinion, there will always be competitors willing to provide content for free with more aggressive cost reduction strategies (like Huffington Post, Politico, Media Matters) and more innovative monetizing strategies. And while these endeavors generally suck in terms of quality, many will learn how to produce quality reporting and analysis at a fraction of the cost. This doesn’t mean pay-for-content won’t work. It just means that someone needs to find a way to convince everybody to jump off that bridge at the same time. The one way — and I believe there is only one way to succeed — is for content-providers to form a consortium and charge one subscription fee (say $10 to $20 per month) and allow every subscriber complete access to their online content. Subscription revenues would be distributed according to use. So you’d have Time, Newsweek, FNC, CNN, Business Week, Fortune, St. Petersburg Times, Minneapolis Tribune, Reuters, the whole club — you’d subscribe to all of this content in one set fee. That would work. But it’s not like anyone is asking me.


230 miles per gallon.

The Chevrolet Volt, the electric car General Motors Co is counting on to revitalize its lineup, is on track to achieve an unprecedented fuel economy rating of 230 miles per gallon in city driving, GM said on Tuesday. . . .

GM executives have said the Volt could cost as much as $40,000 before a $7,500 consumer tax credit.

(“GM claims unprecedented mileage from Volt,” Reuters, August 11) The new GM, it seems, has learned a valuable lesson from Apple, Microsoft, and every other computer tech company: the enormous value of “vaporware.” So we have, for the first time in manufacturing history, the first “vaporcar.” It’s like that scene in the Bugs Bunny short, Sahara Hare, where Bugs, being chased by the Bedouin Riff-Raff Sam (“the riffiest riff to ever riff a raff!”), jumps into a car sitting in the middle of a desert. He starts it and . . . it disappears, and he falls butt-first into the sand. “What a time for a miragey!” Here’s the lesson that GM needs to learn about vaporware: they don’t have the luxury of disappointing their public. Computer tech companies can get away with disappointing expectations they’ve built up (the word that comes to mind is . . . Vista), but GM will go thump on its butt if the vaporcar Volt turns out to be a miragey.


If you think your boss is bad . . .

As a form of punishment, Sea Org members had to run around a circular dirt track with a pole at the center for hours on end in the desert heat. “You would be on it anywhere from eight to 12 hours a day,” Morehead said. . . .

Another time, a meeting of Hawkins’ marketing team, Miscavige turned angry. “He gets pissed off at me for whatever reason. I was usually the punching bag. And he wails on me and knocks me to the ground.”. . .

Before leaving, Miscavige turned to Hawkins. “He says to me, ‘Do you know why I beat you up?’ ”

“I say, ‘No, sir.’ ”

“He says, ‘To show you who’s in charge.’ ”

(“Strength in their numbers: More Church of Scientology defectors come forward with accounts of abuse,” St. Petersburg Times, August 2) I know the article’s old, but I went to the wrong MBA program, man. Seriously. We never learned any cool management techniques like this in my wussy MBA school. This guy Miscavige walks into a meeting, hears something he doesn’t like, leaps over the conference table, and starts pounding his executives. His secretary carries a handy bottle of Bactine to spray on the daily cuts, scrapes, and owies. Fight Club meets the Harvard Business Review! At USC, our wimpy management professors drawled on about “servant leadership” and “team building” and other feel-good little kid stuff. We never got any of those Hulk-smash-puny-human classes. And the final exam could be The Great Outdoor Fight! “3 Days. 3 Acres. 3000 MBA students. Only one will get an A!” “Watch MBA destroy MBA!” (Of course, I could link to the free online version of The Great Outdoor Fight, but, well, it’s not for those easily offended. Or, for that matter, even those who are really hard to offend. So you’ll just have to find the free Great Outdoor Fight under your own steam, my friend.)

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