NEWS - Media & Internet
Published 7:40 AM, 6 Aug 2009
Last update 5:13 AM, 7 Aug 2009
News Corp to charge for all news websites
By a staff reporter, with AAP
Media giant News Corporation Ltd intends to charge for all its news websites in a bid to lift revenues, as the transition towards online media permanently changes the advertising landscape.
News Corp chairman Rupert Murdoch told analysts in a conference call after News Corp released its full-year results that the traditional newspaper business model has to change.
"The digital revolution has opened many new and inexpensive methods of distribution," Mr Murdoch said.
"But it has not made content free. Accordingly we intend to charge for all our news websites," he said.
News Corp's latest results reflect the tough conditions that media companies have faced since the onset of the global financial crisis, and Mr Murdoch’s intentions to remove free content entirely will have a global impact on publications around the world.
The move would affect news websites visited by millions of people around the world, including popular tabloids like the New York Post and The Sun in London, as well as other papers such as The Times of London.
The Wall Street Journal, owned by News Corp's Dow Jones unit, now offers some paid and some free stories.
Its large Australian newspaper stable includes Melbourne's The Herald Sun, Sydney's The Daily Telegraph and the nation's only national newspaper, The Australian.
Mr Murdoch said News Corp was working with software and hardware developers and other publishers to develop a model that worked for consumers.
He also said News Corp would use the Wall Street Journal's online vehicle as a model, and would consider charging for online content this financial year.
"The extended downturn has only increased the drumbeat for change," he said, arguing that classified advertising for online news would never reach the levels once offered by print.
"Quality journalism is not cheap, and an industry that gives away its content is simply cannibalising its ability to produce good reporting," Mr Murdoch said.
"The increase we have seen in our Wall Street Journal subscription proves to me that the market is willing to pay for that quality."
The traditional newspaper business model had to change rapidly, he said.
But closing newspapers was "not a prospect at the moment".
"The tumultuous and unprecedented change affecting the whole media sector, in particular newspapers and free to air broadcasters, cannot be ignored.
To stop readers simply migrating to the free news websites of rivals, News Corp would "just make our content better and differentiate it from other people", he said.
"We're certainly satisfied that we can produce significant revenues from the sale of digital delivery of newspaper content.
"I believe if we're successful we will be followed by other people."
News Corp posted a full year operating profit of $US3.6 billion ($A4.3 billion), down from $US5.3 billion in the previous corresponding period.
The media company's newspaper division weighed on the result, booking an operating profit of $US466 million, down 41 per cent.
"The adjusted operating results primarily reflect lower advertising revenues and the strengthening of the US dollar against the Australian dollar," the company said in a statement.
The Australian newspaper group also reported full year operating income decreases following a 10 per cent decline in advertising revenue in local currency terms, reflecting lower display and classified advertising, especially in the employment and real estate sectors.
News Corp shares closed 3.05 per cent stronger at $14.86, against a rise of 1.45 per cent on the benchmark index.
Click here to read commentary on News Corp's announcement by Business Spectator columnist Stephen Bartholomeusz.
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