News Corp to charge for web content

07 August 2009

NEW YORK: News Corporation, the media company, will start charging consumers to access material from all its newspapers and TV news channels via the internet in the near future, according to its chief executive, Rupert Murdoch.

News Corp posted a net loss of $203 million (€141m; £120m) in the quarter to June, mainly as a result of impairment charges and restructuring costs, totalling $680m, related to Fox Interactive Media, which houses MySpace, the social networking portal.

Over the last 12 months, the owner of Fox and The Times registered a loss of $3.4bn overall, having been hit with some $8.9bn worth of impairment charges over this period as a whole.

Despite this, Murdoch reported there were "some good signs of life" in the advertising market, and predicted the organisation's operating profits would see a "high single digit" improvement next year.

Within this, newspaper ad sales are set to witness a further drop off in the "very low double digits", but this should be offset by growth through its cable unit.

Another method of driving revenues will be to charge web users to view online content from titles like the News of the World, the UK-based Sunday newspaper, and The Australian, the daily business title.

The Wall Street Journal already has a subscription-based model in place for its website, and has also been considering adding a "micropayment" feature for individual articles.

"Quality journalism is not cheap, and an industry that gives away its content is simply cannibalising its ability to produce good reporting," Murdoch said.

"The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news websites," he continued, adding that, in relation to a timeframe, News Corp was "thinking in terms of this fiscal year."

Should this "offensive" model of growth be successful, it is likely the company's approach "will be followed by other media," the tycoon predicted.

Another area of recent innovation that has proved less to Murdoch's liking is a deal which made content from The Wall Street Journal available on the Kindle, Amazon's electronic book reader.

While News Corp will "get a better share of the revenue," from the agreement in the future, "it's not a big number, and we're not encouraging it at all," Murdoch argued.

The fact that that Amazon is unlikely to reveal any data about subscribers to the scheme "will eventually cause a break between us," Murdoch warned.

Data sourced from Financial Times; additional content by WARC staff