News Corp chief to charge online
2009-08-08 12:30
San Francisco - News Corporation will begin charging readers of online versions of its newspapers in the coming year in a move that Chairman Rupert Murdoch says could spur a shift away from free news content on the internet.
Murdoch broke the news after the global media giant reported that it ended its business year with a net loss of $3.4bn due to hefty charges of $9.2bn.
The sprawling US media empire had posted a net profit of $5.4bn a year earlier.
"We have a lot to do and we have to face the challenges of free-to-web television and digital newspapers," Murdoch said during a conference call with analysts and reporters.
"We are very hopeful that we can produce significant revenues from the sale of digital delivery of newspapers."
Murdoch acknowledged that there is nothing to stop online readers from switching to websites where stories are accessible for free, but the chief executive said he believes the competition will follow his company's lead.
"We just have to make our content better and differentiate it from other people," Murdoch said. "I believe if we are successful we will be followed by other media."
The number of website hits triggered by celebrity scoops posted online by News Corp is "astronomical," said Murdoch, who added he thinks people will be "happy" to pay for such stories.
Online income for newspapers has failed to offset plunges in revenue from advertising in print publications, pressuring the industry to break from the free-story model that has been the Internet norm.
News Corp already charges for its Wall Street Journal website and claims it is the most successful paid news site on the internet.
The Wall Street Journal is sold as digital content for Amazon.com's Kindle electronic readers, but News Corp says it is irked that Amazon doesn't share the identities of subscribers.
"Kindle treats them as their subscribers not as ours, and I think that will eventually cause a break between us," Murdoch said.
News Corp is not likely to make an electronic reader that people could use to read digital newspapers because "we are not in the hardware business," Murdoch said.
But News Corp executives have revealed they are in talks with Sony, which makes e-readers that compete with Kindle devices.
Sony is on board with the notion that News Corp should know who is subscribing to digital versions of the Journal, according to Murdoch.