Chairman Murdoch says news sites will charge for content
By David B. Wilkerson, MarketWatch
CHICAGO (MarketWatch) — News Corp. said Wednesday it swung to a quarterly loss on $680 million in impairment, restructuring and other charges, most of them in their Fox Interactive Media unit, as the struggling worldwide economy held a firm grip on the media conglomerate.
Chairman Rupert Murdoch said that while economic downturn may have bottomed, “there are no clear signs of a fast recovery.”
Murdoch, speaking to analysts and reporters during a conference call, said that advertising markets are showing “good signs of life” despite ongoing weakness in the automotive and financial categories.
Murdoch also said the company intends to charge for all of its news Web sites.
“Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting,” Murdoch said.
Chief Financial Officer Dave De Voe said Wednesday that the media company expects fiscal 2010 operating income to rise by a “high single-digit” percentage from the fiscal 2009 total of $3.44 billion.
De Voe said the company will face a number of difficult comparisons in the quarter ended Sept. 30, and that most of the media company’s growth will be seen in the three subsequent quarters.
News Corp. /quotes/comstock/15*!nwsa/quotes/nls/nwsa (NWSA 10.66, +0.08, +0.76%) /quotes/comstock/15*!nws/quotes/nls/nws (NWS 12.48, +0.10, +0.79%) /quotes/comstock/22x!e:nws (AU:NWS 14.86, +0.44, +3.05%) said it lost $203 million, or 8 cents a share, in its fiscal fourth quarter. In the comparable period a year ago, its profit was $1.1 billion, or 43 cents a share.
De Voe said the company’s adjusted net income, excluding items, was 92 cents a share in the latest three months.
Revenue fell 10.5% in the latest fourth quarter to $7.67 billion.
Analysts had expected News Corp. to report revenue of $7.63 billion, according to a survey conducted by Thomson Reuters.
News Corp.’s many media properties include The Wall Street Journal and MarketWatch, the publisher of this report.
The company reported an operating loss of $136 million compared with a loss of $57 million a year earlier, as Fox Interactive Media was hit by a decrease in ad revenue and higher costs related to a MySpace music venture and the launch of new features.
At News Corp.’s film and television production studios, operating income fell to $203 million from $220 million, even as revenue rose to $1.72 billion from $1.52 billion. The decline primarily reflects decreased income from the library assets of Twentieth Century Fox Television, as well as higher marketing costs.
Chief Operating Officer Chase Carey said on the call that Redbox DVD rental kiosks represent an “issue” for the entertainment conglomerate.
Redbox, owned by Coinstar /quotes/comstock/15*!cstr/quotes/nls/cstr (CSTR 38.14, +2.09, +5.80%) has installed thousands of its kiosks, which charge $1 per day for movie rentals, at supermarkets, Wal-Mart /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 49.02, +0.04, +0.08%) stores, 7-Eleven /quotes/comstock/11i!svndy (SVND.Y 47.25, -0.45, -0.94%) /quotes/comstock/!3382 (JP:3382 2,260, +15.00, +0.67%) outlets, and many other places with significant foot traffic.
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