By Miriam Steffens
STUNG by the global recession that forced him to report a $US3.4 billion ($A3.7 billion) loss for News Corp last year, Rupert Murdoch is determined to clip fees wherever he can to reduce his media empire's traditional dependence on advertising dollars.
Mr Murdoch, 78, has used the company's shareholder meeting in New York to outline his vision how News will change its business model following ''one of the most challenging'' years in the past five decades.
Rupert Murdoch: ''Good journalism, too, comes at a price.''Credit: Getty Images.
He envisions charging: consumers to access its newspapers and entertainment sites online; sites such as Google that aggregate its news; and cable and satellite providers that carry its free-to-air Fox TV network.
''In fiscal 2010, we will depend on advertising for significantly less of our total revenues across the company and I am confident this trend will continue to grow in the coming years,'' he said, citing the rapid earnings growth from News Corp's pay TV business.
Having set off a global debate about publishers' chances to make readers pay online, Mr Murdoch told his shareholders on Friday that free-to-air programs could also ''no longer be supported solely by advertising revenues''. News Corp will start to seek retransmission dollars and profit-share deals from the cable companies carrying its broadcast signals.
''We realise 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,'' he said, and dismissed sceptics who doubt that consumers used to the free internet world will pay up.
Last week, ABC chief Mark Scott and market research company Nielsen both predicted the paid-for-content push would fail, with readers likely to flee to sites that remain free.
But Mr Murdoch insisted that ''good journalism, too, comes at a price. Successful newspapers of the future will charge for their content and aggregators will be largely excluded.''
News Corp has slashed more than 3700 jobs and streamlined its businesses worldwide over the past year to counter the pressure on earnings. Mr Murdoch said the first quarter left him with ''even more confidence in our original guidance''.
The company will report earnings for the three months through September early next month. Deutsche Bank expects profit will still be down 13 per cent because of continuing slumps at News Corp's newspapers and TV channels. But the outlook was likely to improve afterwards, helped by pay TV subscriptions and box office hits such as Ice Age 3.