Mark Cuban has been thinking about empire-building. Not his own.
In a fascinating blog this weekend, Cuban doled out advice to Newscorp's Rupert Murdoch about charging for content at MySpace and other Newscorp websites.
"Rupert, you didn't ask my opinion on this," Cuban starts the blog, "but since when has that ever stopped me."
First, Cuban suggests that Murdoch should block aggregation sites from linking to Newscorp content, even though he admits that goes against "conventional wisdom". Cuban specifically points to sites like Michael Wolff's Newser.com, which is sending Murdoch "inventory" that he usually can't monetize. "Why would you help a site that is a direct competitor for minimal incremental revenue?"
Cuban says if Newscorp and other mainstream news sites began blocking aggregators' access, "The aggregator sites that try to front end the content you invest a ton of money to create will find themselves all relying on AP, Reuters and individual bloggers." Is that likely? "This is where all the netizens jump in and tell me I'm crazy," he writes. "That news sites won't ever do this. That's not the internet way. Which of course is exactly how they respond to every business question involving the net."
He suggests that Murdoch avoid selling content "a la carte", except for the Wall Street Journal, which is the rare success story in online subscriptions.
The Journal "moves markets", and therefore, Newscorp can charge for it. "Page 6 doesn't move markets. Fox Sports doesn't move markets. People won't pay for it by story."
So...what to do?
This is where the suggestions get very interesting. Cuban steals "a page from the old record and book clubs" and suggests Newscorp bundle into any subscription package "high margin products" which have a perceived value-and then charge less than the perceived value.
Here's one example-"The Newsjunkies Subscription". For $9.95 a month, with a minimum commitment of 15 months, you get:
-Access to every Newscorp news site except the Wall Street Journal (pay $5 extra for the Journal website, too)
-The choice of any 2 books from Harper Collins
-Subscription to The Weekly Standard
-$99 credit "at a special edition of The Fox Store that we put together exclusively for our News Junkie Subscribers" which includes Fox DVDs.
Cuban says Newscorp could create other customized subscription packages for sports fans or movie lovers. He guesses the hard part in making this work wouldn't be the cost. "The hard part, as it always is for big, publicly traded conglomerates," he writes, "is to align all of their business units to a common goal. I know they can sell their content if they package it right. I don't know if they can take care of corporate politics."
As for MySpace, Mark Cuban has a couple of ideas there as well. He suggests the social networking site borrow from Wal-Mart and sign deals with artists to sell their music exclusively on MySpace. "Then you can offer a subscription to their music for some number that seems ridiculously low," he says. "Say $1.49 per year for all the music the band releases. Since you paid some finite amount (with some probable volume bonuses only if you make money), your mission is to sell enough subscriptions to cover the cost to the band/label, and then some."
Cuban has a lot of experience making enterprises work, but running a global multi-media company isn't one of them. Still, the guy's a billionaire for a reason. He's smart.
Though even Mark Cuban admits in his open letter to Murdoch, "I don't know if it will work, but it is sure worth exploring!"
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