How Rupert Murdoch May Save the News Biz

05/16/08 - 09:58 AM EDT

Simon Constable

It's time to stop complaining about Rupert Murdoch and his vast News Corp.(NWS Quote) empire and start embracing what he really stands for: Vigorous competition.

Murdoch is enlivening a business in much need of a shakeup.

Whatever you say about him -- and there's plenty to say -- the truth is that he's exactly what the American newspaper needs right now.

The newspaper business is suffering now from a lack of internal competition. It shouldn't be a surprise that the quality of product has declined, and that as a consequence, readers have fled.

No industry has ever benefited for long where competition has been lacking. Just look at what happened to RCA, which at one time had great color-television technology but let it all slip after achieving monopoly status, says Michael Carew, professor of economics at Baruch College in New York.

You Killed a [Bleeping] Tree for That?

It's a similar story where newspapers are concerned.

"The lack of vigorous competition slowed the pace of innovation and allowed publishers and editors to make decisions... without listening carefully to the readers themselves," wrote Steven Pearlstein, a Pulitzer prize-winning columnist for the Washington Post -- owned by Washington Post Co.(WPO Quote) -- in a recent column.

Although that first comment makes sense, he then says the answer for the business is fewer newspapers: "Industry consolidation is not only necessary, but desirable."

Those statements just don't mesh: more competition, achieved with fewer papers? It makes no sense.

The truth is that more papers are needed. Many more.

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