Murdoch to media: You dug yourself a huge hole

With newspapers cutting back, and predictions of even worse times ahead, Rupert Murdoch said the profession may still have a bright future, if it can shake free of reporters and editors who he said have forfeited the trust and loyalty of their readers.

"My summary of the way some of the established media has responded to the Internet is this: It's not newspapers that might become obsolete. It's some of the editors, reporters, and proprietors who are forgetting a newspaper's most precious asset: the bond with its readers," said Murdoch, the chairman and chief executive of News Corp. He made his remarks as part of a lecture series sponsored by the Australian Broadcast Corporation.

Murdoch, whose company's holdings also include MySpace and The Wall Street Journal, criticized what he described as a culture of "complacency and condescension" in some newsrooms.

"The complacency stems from having enjoyed a monopoly--and now finding they have to compete for an audience they once took for granted. The condescension that many show their readers is an even bigger problem. It takes no special genius to point out that if you are contemptuous of your customers, you are going to have a hard time getting them to buy your product. Newspapers are no exception."

The 77-year-old Murdoch, recalling a long career in newspapers that began when his father's death forced him to take over the Adelaide News in 1952, said the profession has failed to creatively respond to changes wrought by technology.

"It used to be that a handful of editors could decide what was news--and what was not. They acted as sort of demigods. If they ran a story, it became news. If they ignored an event, it never happened," Murdoch said. "Today, editors are losing this power. The Internet, for example, provides access to thousands of new sources that cover things an editor might ignore. And if you aren't satisfied with that, you can start up your own blog, and cover and comment on the news yourself. Journalists like to think of themselves as watchdogs, but they haven't always responded well when the public calls them to account."

To make his point, Murdoch criticized the media reaction after bloggers debunked a 60 Minutes report by former CBS anchor Dan Rather that President Bush had evaded service during his days in the National Guard.

"Far from celebrating this citizen journalism, the establishment media reacted defensively," Murdoch said. "During an appearance on Fox News, a CBS executive attacked the bloggers in a statement that will go down in the annals of arrogance. 60 Minutes, he said, was a professional organization with 'multiple layers of checks and balances.' By contrast, he dismissed the blogger as 'a guy sitting in his living room in his pajamas writing.' Eventually, it was the guys sitting in their pajamas who forced Rather and his producer to resign."

Murdoch continued: "Mr. Rather and his defenders are not alone. A recent American study reported that many editors and reporters simply do not trust their readers to make good decisions. Let's be clear about what this means. This is a polite way of saying that these editors and reporters think their readers are too stupid to think for themselves."

Murdoch's comments come at a time when the media landscape looks increasingly bleak both for print-based and online news organizations. A recent report by Goldman Sachs predicted that advertising pressure will continue because of the declines in the auto and financial industries. Online outlets are also feeling the impact. On Friday, TheStreet.com shut its San Francisco office.

Despite the blemishes, however, Murdoch said newspapers can still count on circulation gains "if papers provide readers with news they can trust." He added that they will also need to embrace technology advances like RSS feeds and targeted e-mails. The challenge, according to Murdoch, will be to "use a newspaper's brand while allowing readers to personalize the news for themselves-and then deliver it in the ways that they want."

Murdoch concludes that "the newspaper, or a very close electronic cousin, will always be around. It may not be thrown on your front doorstep the way it is today. But the thud it makes as it lands will continue to echo around society and the world."