News Corp. ices digital newsstand plan

By Reuters
Posted Oct. 21, 2010 at 2:40 p.m.

Rupert Murdoch’s News Corp. has put on hold ambitious plans to create a subscription online newsstand, after failing to attract enough interest among other news organizations, a person familiar with the plan said.

The owner of the Times of London, Fox News and the Wall Street Journal will reassign the staff working on “Project Alesia,” which aimed to charge readers for a bundle of newspaper and magazine digital content.

The source said News Corp was unable to reach a “critical mass” of publishers to support the plan.

The company declined to comment.

Project Alesia is one of several digital journalism initiatives that also includes a news product, identified internally as the Daily Planet, that is designed for tablet devices.

Alesia is said to “not be on the fast track” any longer for News Corp in New York, the source said, but it still hopes to launch the service at a later date.

The company is also considering other options, such as a sale of technology assets, according to reports.

Murdoch has been exploring new ways to charge readers for news and entertainment online, particularly on portable tablet devices such as Apple Inc’s iPad, and cellphones.

In the last year News Corp has invested in start-ups like Journalism Online, a company that helps publishers charge for online access; and Skiff, an e-reader company.

News Corp executives pitched to U.S. publishers the idea of selling access to multiple newspapers and magazines, proposing to take a cut of subscription revenue and also controlling some of the customer data, sources said.

One publisher described the pitch as “lame.” Another newspaper publisher executive said they did not take the offer seriously.

Publishers are particularly protective of their subscriber data, such as names, addresses and credit card numbers, which helps them court advertisers and market new products to existing readers.

Discussions between Apple and publishers over selling subscriptions to magazines and newspapers on the iPad have stumbled on the same issue.

With few exceptions such as News Corp’s Wall Street Journal and the Financial Times, owned by Pearson PLC, most newspapers and magazines are unable to sell recurring subscriptions through iTunes that would force readers to purchase single copies.

Reports of Project Alesia ending in the UK was first reported by Brand Republic on Thursday.

The reports said News Corp had pulled the project over cost concerns after investing around 20 million pounds ($31.5 million) in Alesia, with 1 million pounds planned for advertising.

News Corp had more than 100 people working on the project in London and most of them will be assigned to other projects within its News International unit, the source said.

A similar reassignment of duties is also expected for the New York team.

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