NewsCorp’s Strategy to Lessen Reliance on Advertising

15 September 2003

The merger in April by News Corporation of its italian satellite operation with local rival Telepiu to form Sky Italia [WAMN: 03-Apr-03], plus the pending stateside takeover of Hughes Electronics’ DirecTV [WAMN: 10-Apr-03], are pivotal to the group’s strategy to lessen reliance on advertising revenues.

In its 2003 annual report published today, the group’s chairman/ceo Rupert Murdoch said: “Both Hughes Electronics and Sky Italia, as distribution platforms, will enhance the long-term strategy of our company as a whole, providing us with a better balance of advertising-dependent and non ad-dependent revenues.”

Murdoch also revealed a rare glimpse of his empire-building ambitions. Of the DirecTV deal, he conceded: “For NewsCorp, completing this transaction would mark the culmination of our long-time pursuit of satellite TV distribution in the US – and provide the missing link in an unprecedented global satellite television platform.”

But the addition of DirecTV to the Murdoch fiefdom is still not a foregone conclusion. It requires the approval of US lawmakers and competition regulators, to which end the 72-year old tycoon has of late been stomping Washington’s corridors of power with the vigor of a teenager on Speed.

Meantime, the NewsCorp report hails its past fiscal as the most successful on record, notching record profits from its US television operations and Australian newspapers.

Data sourced from: News Corporation; additional content by WARC staff