Friday, May 8, 2009

Murdoch says worst of crisis over

NEWS Corporation chief executive Rupert Murdoch believes the worst of the economic crisis has passed.
Mr Murdoch said the company is now concentrating on hunting down ways to make more money from the web.
During News Corp's third quarter earnings call in New York today, Mr Murdoch announced a flat third quarter in which income drew level with the same quarter last year.
But he said the economic crisis was turning a corner and talked up plans for user-pays access to internet news content.
"It is increasingly clear that the worst is over," Mr Murdoch said.
"I have been uncharacteristically pessimistic in recent calls though I would argue it was a well-founded concern," he said.
"There are emerging sings in some of our businesses that the days of precipitous decline are done and that revenues are beginning to look healthier."
News Corp, which owns the Herald Sun, posted a third quarter profit of $US2.7 billion on the back of a boost from the partial sale of its stake in NDS Group.
The company expects operating profit in fiscal 2009 to be 30 per cent below the previous year's $US5.13 billion after a 47 percent drop in profits to $US755 million in the three months to March 31.
A strong performance from the News Corp cable network and film studios was offset by declines at its recession-plagued broadcast and publishing operations.
Australian newspaper income was down 42 percent while across the group. Dramatic losses in newspaper advertising revenue had been "exaggerated" by the recession, with sharp declines in job and real estate advertising revenue.
However, there were signs that advertisers were trickling back.
"At the very least, we've hit a floor, and we seem to be getting a bounce," Mr Murdoch said.
Mr Murdoch, who has never shied away from calling the conditions when they were tough, struck a more optimistic tone yesterday.
"We are beginning to see a number of bright spots that give us encouragement," Mr Murdoch said.
News Corp was looking at charging a fee for access to its online news content from mastheads around the world.
"We certainly planning that way. We'll test it first on some of our stronger ones," he said.
"I would think you will see some within the next 12 months."
The Wall Street Journal, the only US newspaper to increase circulation in the most recent audit, was attracting twice as many website visits as last April.
The Journal charges for some content.
News Corp had made its operations leaner worldwide.
"To that end we have reduced staff levels by 3000 people affecting very few journalists or creative personnel," he said.
"We have streamlined a merged operations everywhere but especially at our stations and newspapers,
"These strategies will allow us to emerge even stronger when the recovery begins."
The Wolverine movie franchise was "important" and the growth of 3D cinema would continue to help the company build its film and entertainment divisions, he said.
Filmed entertainment grew operating income by eight per cent to $US282 million and the cable networks grew operating income by 30 per cent to $US429 million.
The company was not interested in acquiring other newspaper mastheads, such as the LA Times or the New York Times, as long as the existing model for newspapers was "malfunctioning", Mr Murdoch said.
News Corp was leading the way in finding a more profitable model, he said.
"You can confidently presume that we are leading the way in finding a model that maximises revenues and returns for our shareholders."


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