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Murdoch to charge for all online content

Rupert Murdoch has vowed to charge for all the online content of his newspapers and television news channels, going well beyond his prediction in May that the company would test pay models on one of its stronger papers within the year. The comments by News Corp’s chairman came as he predicted a “high single digit” rebound in the group’s operating profits next year. The worst of the media sector slump might be behind the company, he said, as he reported “some good signs of life” in advertising.

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Newspaper and television revenues would be down “very low double digits” next year, but growth in cable properties such as Fox News would leave advertising revenues flat and total revenue up 4 per cent.

News Corp put the seal on a brutal fiscal year with a fourth- quarter net loss of $203m (£119m), dragged down by $680m in impairment and restructuring charges at Fox Interactive Media, whose MySpace social networking site cut more than 700 jobs in the period.

The latest writedown to boom-era acquisitions masked a 30 per cent fall in quarterly adjusted operating profit to $948m, in line with lowered projections, and adjusted earnings of 19 cents per share, narrowly ahead of Wall Street forecasts of 18 cents.

However, they resulted in a $3.4bn net loss for the full year, down from net income of $5.4bn a year earlier, reflecting $8.9bn in impairment charges.

The sweeping decision by the owner of titles including The News of the World and The Australian to abandon the practice of giving away news in exchange for attracting a large audience for advertisers could embolden other publishers warily examining paid content models.

“We intend to charge for all our news websites,” Mr Murdoch said.

“If we’re successful, we’ll be followed by all media,” he added, predicting “significant revenues” from charging for differentiated news online.

He warned that “the big competition will be coming from the BBC,” which offers online news for free, but said: “Our policy is to win.”

Mr Murdoch said News Corp was highly unlikely to develop its own electronic reader, but took aim at Amazon’s Kindle device by praising the rival Sony Reader.

He insisted that News Corp would retain a direct relationship with its subscribers to its content via e-readers, information that Amazon has refused to hand over.

Chase Carey, who recently returned to News Corp as chief operating officer, said the online charging policy would extend to cable networks such as Fox News.

However, he criticised TV Everywhere, the cable industry strategy championed by Time Warner to offer shows online to paying subscribers, as a “defensive” response and said News Corp aimed instead to develop “offensive” models.

Declines in revenue and profit across television and newspaper assets offset strong gains from cable networks businesses in the quarter, in which News Corp’s cash pile grew to $6.5bn.

[Estimated timeframe:Q3 2009-onward]

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Source: FT.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4623

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