Murdoch names entertainment arm: 21st Century Fox

by Marketing ON 18 April 2013

The entertainment arm that will be spun off from News Corp has been given the name ’21st Century Fox’, its chairman and chief executive, Rupert Murdoch, has revealed.

Murdoch’s media empire will be split into two separate publicly-listed companies come June this year, with the publishing arm retaining the News Corp name.

21st Century Fox will include Hollywood movie studio, 20th Century Fox, the film studio Murdoch acquired in 1984, which remains the most profitable arm of his media empire to date.

In a statement, Murdoch says the new name of the entertainment company “draws upon the rich creative heritage of our film studio, while also speaking to the innovation and dynamism that define all of our global media and entertainment businesses and will guide us into the future”.

Assets including Fox Broadcasting network, Fox News Channel, FX, Fox Sports, Fox News cable, News Corp’s 39% stake in BSkyB, the Fox film and TV studios, National Geographic channels, and interests in various other TV broadcasters across the world will come under the new 21st Century Fox umbrella.

Murdoch will remain the chairman of both companies and chief executive of 21st Century Fox. Chase Carey will become 21st Century Fox’s president and chief operating officer.

It has been speculated the decision to split the News Corp empire was due to the News of the World hacking scandal last year which had investors questioning their investments in the newspaper assets of the company – which are far less profitable than the entertainment side.

Aus ad revenue plummets for News as publishing arm struggles

by Marketing ON 7 November 2012

News Corp’s Australian publishing operations have suffered a significant fall in earnings as advertising revenues continue to plummet.

While the company as a whole tripled its profit for the first quarter of the financial year, thanks primarily to a US$1.4 billion sale of its stake in software company NDS, its publishing business’ earnings before interest and tax (EBIT) fell 48% on the previous year to US$57 million.

Operating income for the company’s publishing arm dropped by US$53 million for the quarter, due to shrinking ad revenues, particular in the Australian and American markets.

“In Australian publishing, the decline in display and classified advertising has clearly hit these businesses,” News Corp chief operating officer Chase Carey told analysts earlier today.

Chairman and chief executive Rupert Murdoch said in a statement, “Our operational discipline and focus on innovation continued to drive the company’s momentum in our fiscal first quarter, led by double-digit growth in our channels business and the global success of our film and television content.

“Even against considerable currency headwinds due to a stronger dollar, we were able to increase News Corp’s revenue and adjusted segment operating profit over the prior year quarter while continuing to make key investments to position us for future growth.

“We are committed to leading the change that the marketplace and our customers demands as the company builds on its success at leveraging multi-platform opportunities for our content. We believe that our ability to do so will be enhanced by the flexibility and management focus that will result from the proposed separation of our entertainment and publishing businesses.

“We have made considerable progress and look forward to providing more details by the end of the calendar year.”

The changes alluded to include a restructure of its Australian newsrooms along the East coast, reducing the number of newsrooms from 19 to five.

News Corp’s total revenue in the three months to September was $US8.14 billion, up 2% from $US7.96 billion for the same period a year ago.

The company expects its EBIT to grow in the “high singles to low double digit range” in 2012/13, from an adjusted $US5.6 billion in 2011/12. Its cable network division posted the strongest growth in first quarter earnings, generating $US953 million in EBIT, up 23% from the prior corresponding period.

In another blow for the business, the UK phone hacking scandal cost $US67 million.

News is due to undergo a historic split next year, when its entertainment and publishing business will be separated into two listed media companies, according to The Australian. The current period’s results included $US5m of costs related to the proposed move.

Image source: Alex E. Proimos.

Ita Buttrose returns to publishing

by Marketing ON 9 March 2012

Media doyen Ita Buttrose is returning to publishing as chairman of startup Reddo Media Services (RMS).

RMS is a tablet publishing specialist that will handle the production and design of tablet magazines.

Buttrose said in a release that by December 2012 there would be over 3.5 million tablet devices in Australia and forecasts put the tablet-owning population of Australia at 50% by 2016.

“Magazine publishers are struggling with declining circulations and their revenues are under pressure,” said Buttrose. “The old ways that once served us well are no longer the way of the future. Tablet publishing is a far more cost-efficient, modern way to produce a magazine.

RMS plans to launch a premium advertising representation service in addition to their production offering.

“Readers appreciate the enhanced content,” says Mitchell. “Research shows dwell time on tablet ads is significantly longer compared to print, and the medium enhances the message,” claims Shane Mitchell, CEO of RMS.

Investors in the startup include those from a variety of background, notably Rupert Murdoch’s son-in-law and former News Ltd publisher Alasdair Macleod.

The leadership team of RMS also includes director Tim Goodman and COO Troy Martin.

Image by Eva Rinaldi Photography.

Change at News Corp as James Murdoch steps down from UK papers

by Marketing ON 1 March 2012

James Murdoch has resigned as executive chairman of News Corporation’s UK newspaper arm, News International.

He will stay on in his role as deputy chief operating officer of News Corporation, but will shift his focus towards pay TV where he oversees Star TV, Sky Deutschland, Sky Italia, and BSkyB from his New York base.

Murdoch has been under pressure from some quarters since the hacking scandal engulfed News International last year and led to the closure of 168-year-old tabloid News of the World.

Rupert Murdoch, chairman and chief executive officer of News Corporation, told MediaWeek: “We are all grateful for James’ leadership at News International and across Europe and Asia, where he has made lasting contributions to the group’s strategy in paid digital content and its efforts to improve and enhance governance programs.

“He has demonstrated leadership and continues to create great value at Star TV, Sky Deutschland, Sky Italia, and BSkyB.

“Now that he has moved to New York, James will continue to assume a variety of essential corporate leadership mandates, with particular focus on important pay-TV businesses and broader international operations.”

Image credit: nrkbeta.

News Limited appoints group marketing director

by Marketing ON 31 January 2012

Corin Dimopoulos has been named News Limited’s new group marketing director and will begin in April.

Reporting to chief executive Kim Williams, Dimopoulos replaces Ed Smith who has been appointed executive director of sales and marketing for Foxtel.

Born in Darwin and raised in New Zealand, Dimopoulos returns to Australia after five years in the UK in a number of senior marketing roles for News Corp stablemate, British Sky Broadcasting (BSkyB).

“Corin is one of News Corporation’s finest marketing executives and his work at Sky, particularly across sports, has been exemplary. His experience of growing large and highly profitable audiences in a subscription environment will prove invaluable as we continue the rollout of digital subscription products across our mastheads,” says Williams.

Dimopoulos says, “Having heard some of Kim’s plans for the company, I am thrilled to be joining his management team. News Limited’s news, lifestyle, and entertainment brands are second to none, reaching over 13 million readers across print and digital platforms every week.

“The challenge of expanding the reach and relevance of these brands across existing and yet to be launched digital platforms, while ensuring we service the millions and millions of loyal print readers, was one I could not pass up.”

Murdoch says iPad newspapers saviour

by Marketing ON 9 April 2010

Rupert Murdoch, CEO and chairman of News Corp, labelled the iPad and other ereaders the saviours of the newspaper industry, at the National Press Club in Washington.

It may well be the saving of the newspaper industry, said Murdoch. He pointed to the financial ease of distribution and potential audiences, also saying he expected 8 or 9 competitors to the Apple product over the year.

Theres going to be tens of millions of these things sold all over the world.”

Im old, I like the tactile experience of the newspaper… If you have less newspapers and more of these, thats OK. It doesnt destroy the traditional newspaper, it just comes in a different form.

Murdoch continued, pointing out the savings possible on paper, ink, printing and logistics.

He also took the opportunity to reiterate his plans to erect pay walls around News Ltd’s web properties and called for other publishers to insist Google generate content itself or pay for the privilege of distributing others content.

Murdoch erects great paywall of Britain

by Marketing ON 30 March 2010

Making good on comments made in 2009, Rupert Murdoch will block 20 million online readers from one of his most popular online news websites.

Users will have to pay to view The Times or The Sunday from June after paying £1 (AUD$1.60) or £2 per week, however those who subscribe to the print edition will have access to the paper’s online content.

The newspapers’ current website, Times Online, had 20.4 million unique visitors in February and has been estimated to have collected £15 million to £18 million a year from online advertising, which analysts believe will disappear if users are forced to pay to enter the site.

Murdoch has previously blamed search engines such as Google for stealing his publications’ content by allowing users to find and access stories through their databases.

“The move is a crucial step toward making the business of news an economically exciting proposition,” said Rebekah Brooks, a former editor of The Sun and chief executive of News International, the British subsidiary of Murdochs News Corp.

The media conglomerate also indicated that The Sun and The News of the World would introduce charging for online access.

National paper shake up

by Marketing ON 13 January 2010

The Australian is moving to its own corporate division.

Standing alone will mean the paper has greater scope to grow both in print, online and digitally in preparation for ereaders. News Ltd CEO and chairman John Hartigan expressly stated the brief is to grow the brand across media, not purely digital.

By creating a separate division and deploying more resources, we aim to enter an unprecedented era of growth, said Hartigan.

The shake up comes as an advance move in Murdoch’s plan to erect online pay walls for his stable of newspapers.

The paper had been part of Nationwide News, publisher of The Sunday Telegraph, The Daily Telegraph, mX and Sportsman.

2010 marketing predictions

by Marketing ON 15 December 2009

Last year I made some marketing predictions for 2009 and I was about 90% right. I failed to anticipate that house prices and car sales would go through the roof (although I did buy a house and a car, so go figure), and I thought Kim Jong Il would be dead by now, but other than that, 2009 was a predictably strange year for marketing. The social media goldrush took no one by surprise, but just like Ballarat circa 1860, the result has been a lot of people arriving in Twittertown and only a lucky few people finding anything worth taking to the bank. There were some memorable turkeys (iSnack 2.0 and Westpacs banana video for example) but also plenty of genuinely ingenious approaches to marketing in new, social, post GFC-environment (did I just say that?). Dominos iPhone app and of course Sapient Nitros success at Cannes with Tourism Queenslands Best Job in the World campaign were some of my favourites. If youre wondering what 2010 holds, beyond the death of despots, read on dear reader.

2010 Marketing Prediction #1: People will stop using the term social media.

Its going to take until December, damnit, but I think the recent death of The Photon Groups The Population gamble heralds the end of the goldrush. Social networks will still exist of course. Facebook will be as popular as ever, but PR agencies and marketing managers will start realising that social media was just a crap name for a bunch of websites where people talked to each other and un-tagged embarrasing photos. If all goes well, CEOs might even realise no-one actually cares and stop blogging.

Prediction #2: 2010 will be the year non-profit organisations do amazing things online.

They have the tools. The new breed of up-and-coming marketing geniuses who work in them know how to use them and the barriers are lower than ever. Fundraising online is now a cinch. The internets social revolution has made spreading the word easier than ever. The charities with the best ideas will win, the ones that fail to move forward will see their dollars eroded by the ones who capture attention. Micro-charities and smaller players will be at a distinct advantage.

Prediction #3: Ad agencies will employ augmented reality experts and use them to extract dollars from trend-conscious, clueless marketing execs and then laugh about it.

Much like they tried to do in 2009 with social media experts, and in 2005 with digital experts really. Itll work though, for a bit.

Prediction #4: Green will be the new black.

Green has been big for ages of course. Ill bet you fifty bucks your email signature has some wanky message about saving the environment. But unless your company is run by Tony Abbott, youre going to be under a more pressure to show the world what youre doing to reduce your carbon footprint than ever before. Governments around the world are now actually serious about it. Climate change is real. Watch companies of all sizes follow suit. Its going to be huge.

Prediction #5: Mobile.

Mobile has been the next big thing for ages, but smart phones were crap until the iPhone 3G came along. Blackberry and Nokia arent going to sit idly by and watch Apple steal all the fun, so expect some massive campaigns from them promoting the technology and some amazing applications that make use of portability, touch screens and improving network coverage.

Prediction #6: Companies will start exploiting GPS to a much greater extent.

If you know where people are, you can tailor marketing communications to them. Look at what savvy companies are doing with Facebook, Twitter and FourSquare. Its just a glimpse of what is to come. Check out Urban Spoon and a business search in Google Maps and youll see what I mean. GPS technology is the most important revolution in small business marketing since the Yellow Pages.

Prediction #7: Customer service will continue to be, generally speaking, crap.

Its just not sexy enough and marketers just dont have enough sway over it. No sane marketer is going to voluntarily take 20% of their budget and give it to the customer service department, and few CEOs are smart enough to understand the impact it could have because they dont have to wait on hold or visit the Department of Transport (or Centrelink, or the phone shop when their mobile breaks, or the bank). Telstra reckon theyre going to try, but, well, well see.

Prediction #8: Above the line will stay above the line.

TV, radio, print, and mass media as we know it will die, eventually. But itll be a S.L.O.W. boring death. Nothing much will change in 2010. The internet wont throw up anything massive. Social media wont save the day. Experiential will be sexy, expensive, risky, unproven and requisite of massive brass cojones. PR will be underfunded and continued to be thought of as the crisis management/press release department. I wish it wasnt so, but it is the way it is. Ratings, TARPS, distribution, reach and the stuff you can prove with hard numbers from massive global statistics corporations like Nielsen will continue to attract the big dollars. The other exciting new children will be put out in the cold to sleep with the wolves. Shame.

Prediction #9: Rupert Murdoch will try and make people pay for content and fail miserably.

Because he doesnt understand that he doesnt own the news. And that if they have to pay for it on his websites theyll just go somewhere else. And that people can find a trillion and one other more interesting free ways to entertain themselves online than reading his news. And that people will happily pay for content that makes them money, like The Wall Street Journal, but not pictures of boobies. Not even 157 of them.

Prediction #10: Marketers will know more about digital.

Seriously guys, sharpen up. Youre paying stupid commissions to underqualified interns to run your AdWords campaigns, you dont know what Google Insights is, you think banner ads are effective because they generate impressions, you still like Flash introductions, you spend about three times as much on your website as you need to because your ad agency is charging you $2,500 for account management nail polish when theyre just out-sourcing the thing to their cousin, you believe your media planner when they tell you taste.com.au is huge in the gay elderly male tenpin bowling demographic and you still cant open a .docx document. Wake the fuck up.

Time consortium confirm digital newsstand plan

by Marketing ON 10 December 2009

Times consortium, including News Corp, Meredith, Hearst and Conde Nast, have confirmed suspected plans to develop digital newsstands as rumours solidify around Apples tablet.

The group confirm the move comes as preparation for redesigning their print titles for ebooks and tablet computers. The reimagined titles will derive profit from both print subscriptions and advertising sales.
The group, led by Time executive John Squires, will also seek to develop a common reading application and publishing platform usable on multiple devices, screen sizes and operating systems.

Although the group claims to represent an audience of 144.6 million, they hope other publishers will allow their content to be included once the platform is developed.
The news comes as Huffington Post founder, Arianna Huffington, claimed New Ltd chairman Rupert Murdoch lacks fundamental understanding of the web and leaks around Apples tablet intensify.

Speaking at a Washington conference, Huffington said:

So now sites that aggregate the news have become, in the words of Rupert Murdoch and his team, ‘parasites’, ‘content kleptomaniacs,’ ‘vampires,’ ‘tech tapeworms in the intestines of the Internets’, and, of course, thieves who ‘steal all our copyright… In most industries, if your customers were leaving in droves, you would try to figure out what to do to get them back. Not in the media. Theyd rather accuse aggregators of stealing their content.

Huffington continued, indicating that most publishers with a digital presence understand the value of the link economy and that the Huffington Post got hundreds of link requests from news outlets.

They understand that the web is not a zero-sum game and that consumers love the freedom to be able to follow where their interests – and the offshoots of a story – take them, she said.

AppleInsider reported checks within Apples supply chain seem to indicate a March/April 2010 launch for the potentially media game changing device.

Yair Reiner, analyst at Oppenheimer, said Apple was approaching book publishers with a proposal for offering content on an ebook platform.

Our checks into Apples supply chain indicate the manufacturing cogs for the tablet are creaking into action and should begin to hit a mass market stride in February. At this stage Apple appears to be sizing its supply chain to support production of as many as one million units per month, said Reiner in a note to investors.

According to the note, the revenue split would be 30/70 in publishers favour.

News Corp: “Free is too expensive”

by Marketing ON 3 December 2009

The Murdoch saga continues with the mogul asking other publishers to come on board with his pay wall plans.

Speaking at workshop titled ‘How will journalism survive the internet age’, run by the US Federal Trade Commission, Sir Rupert Murdoch addressed the criticism of his pay wall plan. Many have lambasted the plan, asking who would pay when it is available free elsewhere, but Murdoch’s solution is to have other publishers follow suit.

We need to do a better job of persuading consumers that high-quality reliable news and information does not come for free… Good journalism is an expensive commodity,” said Murdoch.

CEO of News Corp owned Dow Jones, Les Hinton preceded the comments, speaking in India at the World Newspaper Congress. Hinton warned to beware geeks bearing gifts, saying:

“Because news costs. Because quality costs. Because free sets the price too low. Because free isn’t sustainable. Because free is too expensive.

Hinton said there was a disconnect between what measurement marketers were seeking and what publishers were providing:

Ironically, what they now want is more ‘old media’ metrics they are used to getting from print and television. It supports what we have been saying all along: that audiences exposed to display advertising on high-quality content sites are more engaged, more favourable towards a brand, and are more likely to spend.

The call-to-arms come as Google made a concession to the media, allowing publishers to limit the number of free views available via Google.

If youre a Google user, this means that you may start to see a registration page after youve clicked through to more than five articles on the website of a publisher using First Click Free in a day… while allowing publishers to focus on potential subscribers who are accessing a lot of their content on a regular basis, said Josh Cohen, Google’s senior business product manager in an official blog.

Media versus Google

by David Iwanow ON 20 November 2009

Tough question but, do we even need Google? The one topic that continues to be discussed in business and publishing circles has returned to centre stage with recent public tantrums from News Corp screaming they plan to block Google.

In September I blogged about how publishers appear to be flipping out over how little control they have over their online content with Google News. Since then, News Corp has made a public announcement it would be moving towards a pay model by June 2010 in an attempt to claw back falling advertiser revenue – without Google.

The interesting aspect to this stand off is that unlike many other publishers, News Corp does have a competitive advantage due to its worldwide network of websites, dominance in the media and established offline promotion channels. If any media company is able to survive without traffic from Google it should be News Corporation.

To give you an understanding of the scale of News Corp’s gamble, according to Google Ad Planner from its network of 54 websites, each month News Corp receive around 11.28 million unique visitors, serves around 846,000,000 page views and reaches around 65% of all Australians. According to HitWise, 25% of all WSJ.com (the Wall Street Journals’ web presence) visitors are delivered by Google. So how serious is News Corp with their against-the-tide future digital strategy.

To cloud the issue as to when News Corp will switch to its pay model, it now seems to be accepted by Rupert Murdoch that News Corp will struggle to reach the June 2010 deadline he imposed. So what’s the rush to block Google?

News Corp has apparently placed its trust in social media as a future source of visitors, but HitWise advise that currently Facebook and Twitter only deliver around 4% of visitor traffic. A likely issue is, compared to other publisher websites, News Corp is not even fully prepared for social media as sharing its news stories remains difficult in even the most popular platforms, such as Twitter.

I look at TechCrunch as an example of a media site that understands the benefits of making it easy to share content via social media. TechCrunch offers Facebook Connect for user comments, Trackback URLs for article referencing by bloggers and assists visitors by pre-generating a Bit.ly short URL.

The public issue between News Corp and Google appears to have started over several stress points:

Google launched a free real estate listing service competing with REA Group
Traffic drops for MySpace meant News Corp lost millions in revenue from Google
Google don’t pay enough to their AdSense partners or charge enough for content placement, and
Google News ‘steals’ publishers images, story snippets and even story headlines

So if we are to believe that News Corporation is serious, why are they contributing to Google’s revenue by buying traffic using AdWords? Also a majority of the News Corp network sites depend on Google AdWords for attracting better quality, targeted visitors and allowing them to top up website traffic to satisfy advertisers.

ews src=http://lh4.ggpht.com/_BgW7JrfFDwk/SwXWB0mrMMI/AAAAAAAAACk/riZa67Ui_8U/s720/google-news-adwords.png alt=
ews height=394 width=600 />

There are other solutions that News Corp could explore besides
throwing in the towel in its dispute with Google. Around the world
more publishers are either going head-to-head with Google or working to
drive as much traffic from search as possible. Brent Payne, SEO
director for Tribune Interactive, works to ensure they get as much search traffic as possible from every story.

The Tribune methodology focuses on following white-hat guidelines and working directly with search engines:

Best practice SEO training is run across the Tribune group
Continuous optimisation, measurement and improvement of content, and
Ongoing development of fresh content based on current events and breaking-news

All these steps could be easily implemented by News Corp – who appear to have worked hard to build non-optimised websites. News Corp could follow Tribune Interactive’s example to vastly increase the amount of traffic leading to increased online revenue.

The BBC is also on News Corp’s firing line because, according to Murdoch, their TV licence funding allows them to compete unfairly against News Corp. This challenge seems counterintuitive as the BBC is one of the few media companies challenging the growth of Google’s embedded YouTube player. The BBC is building its own solution which it has begun providing free to other organisations.

These are two different examples of how media companies are working to ensure they remain competitive, while focusing on providing quality content and solutions – not wasting resources on a shouting match over who is right.

As Slate contributor Jack Shafer points out, in the past Murdoch has been the first to drive down the price of newspapers if he can get the volumes to work in his favour. Is this a reverse strategy to try and drive up the value of his content so News Corp gets paid more be every advertisers?

The freesheet was another failed battleground, where Murdoch started a race to the bottom by giving away his printed content with the pure advertising-supported The London Paper. So can he really play the white knight in the argument over the value of content in a fast moving digital world?

What is interesting is News Corp’s web properties still have a large number of Google AdSense modules allowing them to benefit financially from Google’s AdWords business model. News Corp appears to be playing a game of bluff as they are not making use of robots.txt to advise Google not to index their network of websites.

The process to be accepted into the Google News program and ensuring you stay up to date with their processes requires resources so why haven’t News Corp just requested to be removed? I have even provided the links – there is no reason, if Murdoch was serious about blocking Google, why he couldn’t do it today.