Date

Fri - 20.10.2017


News Corp. update: what does split mean for its newspapers?

News Corp. update: what does split mean for its newspapers?

News Corporation has confirmed that over the next year it will separate its publishing and entertainment companies, after rumours of an impending split began circulating earlier this week. In a memo addressed to staff Rupert Murdoch assures his employees that the decision will see News Corp. separate into “two global leaders in their own right […] as opposed to merely one.”

The new media and entertainment company will include many of News Corp.’s most lucrative interests, such as the broadcasters BskyB, Sky Italia, and Fox Broadcasting, as well as the hugely successful 20th Century Fox Film. Whilst there is little doubt that these businesses will continue to flourish, the same cannot be said of the soon-to-be-annexed newspaper titles. Debate is raging over whether removing the safety-net of profits generated by the entertainment businesses will see the company’s newspapers forced to shape-up, or if the measure will ultimately lead to widespread cost-cutting and titles being sold-off or even closed.

In Britain, News International has responded to the announcement from its parent company by raising the cover prices of The Sun and The Sunday Times. As of next week readers will pay 40p for a copy of the weekday Sun, an increase of 10 pence, and the price of The Sunday Times will be put up by 30p to make it £2.50. The Sun will still be 5p cheaper than its closest tabloid rival, The Daily Mirror. Despite an 8.25 percent fall in its circulation during the past year, which reflects a national trend, it is likely to remain Britain’s most-read newspaper. The effects of the hike in prices will potentially hit The Sunday Times harder: the increase will make it the country’s most expensive Sunday paper at a time when its circulation was shown to have suffered a 12 percent year-on-year drop, taking it below 1 million readers.

Of course the change in prices are not only due to News Corp.'s announcement. The majority of British papers have found themselves forced to raise cover prices this year in response to the ever-increasing cost of print and dwindling revenues. Tom Mockridge, Chief Executive of News International, views the changes as a vital part of the company’s desire to continue to invest in quality journalism. Nonetheless, writing in his media blog for the Guardian, Roy Greenslade argues that price rises will become more common amongst News International papers when they become part of a smaller, much less profitable company. 

Despite increasing costs and fears that News Corp.’s papers will be financially crippled by the impending separation, there may be a glimmer of hope for the new spin-off publishing company. Jeff John Roberts is of the opinion that the company’s non-entertainment wing is actually in a better position than previously reported. Although The Times of London and The New York Post are certainly incurring substantial losses, HarperCollins is reporting sales of $1.3 billion and financial titles The Wall Street Journal and Dow Jones have the potential to continue generating profit with their successful digital models. What is more, failing titles were not a priority when the financial success of a blockbuster film or a television channel would soften the blow of falling newspaper subscriptions, but the resolution of the problems newspapers face will be of prime importance to the new publishing company.

Even before news of the split hit the headlines, News International papers, and papers in general were facing the question of how to survive and flourish in today’s changing markets. The developments taking place this week will put the Murdoch-owned papers under increasing pressure to come up with their own solution to the problem.

Sources: pressgazette,  The Guardian (1) (2) (3), Media Week, paidcontent

Author

Amy Hadfield

Date

2012-06-28 17:36

Shaping the Future of the News Publishing


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