News Corp growth proves content still king

AS the world’s largest newspaper company on a revenue basis, News Corp is at the very centre of a global debate about the value of content

Delivery methods may have changed but consumers are prepared to pay for quality. Picture: Luke Fuda

AS the world’s largest newspaper company on a revenue basis, News Corp is at the very centre of a global debate about the value of content.

Publishers the world over are charging for online content after deciding they cannot survive by online advertising alone.

The good news is this growing band of publishers is starting to win the argument as consumers embrace a new era in the newspaper industry by showing a propensity to pay for quality content.

“One year into our existence the real measure of our progress lies in the answer to this question: are we better off, better positioned today than when the journey began?” News Corp chief executive Robert Thomson told investors. “For News Corp, the answer is a resounding yes.”

As News completed its first fiscal year following the historic split of Rupert Murdoch’s media empire, Mr Thomson said its Australian newspapers were ­“experiencing very strong digital growth”, with more than 200,000 digital subscriptions. He singled out the success of The Australian, which now has “more paying ­customers than at any time in its history” after recently passing the 50-year milestone.

Delivery methods may have radically changed in the digital era since the paper’s birth in 1964, but at its heart, the craft remains the same: content is king.

What has altered is the way in which news is delivered as modern technology creates new platform permutations for the delivery of that content.

Audience statistics due to be released on Monday by Enhanced Media Metrics Australia, a leading audience research platform, will reveal readership gains across all editions of quality newspapers from tablets and apps to websites and print.

The growing popularity of these platforms comes at a point in publishing history where the majority of major newspaper owners have separated or agreed to separate publishing businesses into new pure-play newspaper companies.

This week, Gannett, the owner of USA Today and dozens of local daily papers, joined this growing band, which includes News, Time Warner, Tribune Co, Scrimps, and Journal Communications.

The move has seen media conglomerates spin off challenged publishing businesses from faster growing broadcast business.

But rather than expedite their demise by exposing newspapers to the brutal headwinds buffeting a disrupted media sector, the move has forced companies like News to adopt an entrepreneurial spirit and focus on their ­businesses like never before.

“The sensibility of a start-up has characterised our pursuit of global expansion,” Thomson said.

The creation of a new wave of pure-play newspaper companies has significant upside. They can combine back-office functions, distribution, amortise the costs of technology, and achieve global digital scale, particularly on the digital side of the businesses through global brands such as The Wall Street Journal.

Prominent investors are upbeat about the outlook for newspapers. Warren Buffett, the world’s most famous investor, bought scores of titles from US group Media General.

Despite the fact people can communicate easily and relatively cheaply with others around the world, the power of local news and information remains undiminished, he said. Warren Stephens’ Halifax Media Group has added to its newspaper portfolio in recent years.

Amazon founder and CEO Jeff Bezos is now the owner of the The Washington Post; John W. Henry, the Boston Red Sox owner, acquired The Boston Globe from its owner, The New York Times Company. Could it be that canny investors like Bezos, Henry and Buffett see a long-term future for newspapers?

In a global news and information community where public broadcasters pay scant attention to remote corners, investors like Buffett have grasped that trusted local news and information is more important than ever before.

In a world of digital dross, they realise nothing can replace the experience and wisdom of professional journalists.