You may own MySpace, the Times, The Sun the News of the World, the Wall Street Journal, the Australian, Twentith Century Fox and HarperColins but you are not immune to bad hair days. Rupert Murdoch's global media empire, News Corporation, delivered a thumping great $3.4bn (£2bn) net loss for the 12 months to June.
What went wrong? Was it just down to newspapers and advertising revenues? Why did operating profit drop by a staggering 32% to $3.6bn. Cable TV couldn’t counter a slump in income from films, newspapers, books, magazines and online.
In the final quarter of the year, News Corp made a $203m loss, compared to a $1.1bn profit for the same period in 2008.
MySpace, has clearly been outshone by Facebook and could slip to the degree that the likes of Friends Reunited did and shedding 400 staff could be seen as merely treating the symptoms not the underlying cause. The UK newspapers, had a 14% drop in year-end advertising revenue whilst profits in it’s global newspapers business fell from $786m to $466m. Even the bright news that Twentieth Century Fox film studio recorded annual profits of $848m, that was a drop from from the previous year's $1.24bn.
The bad news goes on. The question is what is the remedy? Is it just experiencing a bad day or does it has serious problems and is the balance of media interests now imbalanced? The one thing that is certain is that it can’t reverse bad news across such a wide diversity of interests quickly and that would suggest that some may have to be sacrificed for the larger game.
3 comments:
I hope Rupert reads Brave New World, because here is Dr. Cox’s remedy:
1) Current MySpace strategy to out-face FaceBook is a day late and a dollar short. Play to your strengths: music. Be ruthlessly creative about dominating the music scene! But be quick…
2) Sell HarperCollins. It will never be the Amazon you wanted, nor will any publisher. And it may never again yield the sort of bottom line contribution that a complex multinational such as News Corp requires. Help them do an MBO – it’s the right thing, and it’s what the company needs.
3) Suppress your old-school competitive urges on the newspaper front. You’re right in thinking that papers must charge for their online offerings. But they must also hang together on this issue. Build a consensus on this with your competitors. The alternative is – well, there is no alternative. Deliver more value to the reader (look particularly at information delivery systems) and they will pay more.
4) Stop beating up the BBC. They can beat themselves up very nicely without your assistance, and it makes you look like a bully. It will be counter-productive if you don’t.
wow, this is bad news for all the people reading the news now...soon blogs will officially take over..
wow, this is bad news for all the people reading the news now...soon blogs will officially take over..
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