From the lips of an old newspaper man it was a revealing comment. Rupert Murdoch answering a question at News Corporation’s annual meeting overnight wondered whether he should be talking about newspapers any more. “Newspapers,” he said, “is the wrong word for them”. The Murdoch empire now sees itself well and truly in the digital age with news provided not just in print but across the internet and other platforms as well.

In this new media world one of the problems for companies like News Corporation is the fragmentation of markets. Clearly, Mr Murdoch said in his Chairman’s address,  the broadcast model is challenged.

Good programming is expensive and can no longer be supported solely by advertising revenues. Today, with the exception of mega-events such as the The World Series and primetime juggernauts like American Idol, the audience is fragmenting and so are the ad dollars. We are looking at a number of ways to build new distribution models that generate real value in a digital world. That includes seeking fair compensation from the cable and satellite providers who carry our broadcast signals.

Going forward, we will be seeking retransmission dollars from our distributors. Asking cable companies and other distribution partners to pay a small portion of the profits they make be re-selling broadcast channels, the most watched channels on their systems, will help ensure the health of the over- the- air industry in America . We realize this is going to be a tough challenge, but we’re determined to take a leadership position in creating an economic template for the future.

And it’s not just the broadcast business. As I’ve said many times over the past few months, good journalism, too, comes at a price. Successful newspapers of the future will charge for their content and aggregators will largely be excluded.

Mr Murdoch did not dwell long on reviewing the past year, which he described as “one of the most challenging for News Corporation in our 56-year history”, preferring to give an optimistic assessment of the year ahead. And here the highest hopes appear to be for the film business and in particular Avatar and an Alvin and the Chipmunks sequel which will be released for the Christmas market.

A little bit of Barack Obama bashing does not seem to be doing any harm to the cable television business either. In answering another question the Chairman reported that the attack by White House officials on Fox News had led to record high ratings and revenue.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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