Piracy biggest Foxtel threat: News chief

NEWS Corporation chief executive Robert Thomson has labelled piracy the biggest problem affecting Foxtel in Australia.

NEWS Corporation chief executive Robert Thomson has labelled piracy the biggest problem affecting Foxtel's revenue and subscription rates in Australia.

Speaking at a high-profile Deutsche Bank media conference in Florida, Mr Thomson said piracy was a greater concern for Foxtel than new entrants to the market, such as Google's Play store, which launched two days ago.

Mr Thomson said he was working with Telstra chief David Thodey to convey to the public how Foxtel's viewing choices had improved in the past four years, in order to increase subscriptions and drive down piracy, arguing that illegal downloads were related to a perception of value.

"The only problem you have in Australia is there's a significant amount of piracy," Mr Thomson said. "They want to watch them so much, they're prepared to steal them. Sometimes even if they have Foxtel subscriptions and they're entitled to watch the programs on Foxtel, they'll watch them illegally."

Foxtel is 50-50 joint venture between News Corp Australia and Telstra.

The federal government has indicated it will change the copyright Act after revelations that Australia has one of the highest piracy rates in the world. The creative industry delivers $93.2 billion to the Australian economy or some 6.6 per cent of GDP.

Mr Thomson said a new range of Foxtel products, from Triple Play to Presto, would help to popularise subscription TV in Australia, which has a 30 per cent penetration level -- low compared to most "civilised countries".

"The Australian perception of what is subscription television is a little different," he said. "Here (in the US) it's thought of as a bundle of high-quality offerings that people are prepared to pay for."

Mr Thomson, who was the managing editor of The Wall Street Journal before being named chief executive of the new News Corp in January last year, said News Corp's listed subsidiary REA Group was likely to name a new head within weeks and said the global news group's relationship with its local real estate business was "better than ever". In a speech that outlined News Corp's strategy across print, digital and pay-TV, Mr Thomson said the company had received many applications to replace former REA chief executive Greg Ellis, who left in December for a position overseas with an unnamed company.

"It's a great job. As I understand it a large number of people have shown an interest, and so they should because this is a company that has much more growth potential," he said.

"The relationship between the majority shareholder is better than it's ever been."

News Corp Australia chief operating officer Peter Tonagh joined REA as interim chief executive last month, with the leadership selection expected to play out over the next few weeks.

At the time of his departure, Mr Ellis denied that his relationship with chairman Hamish McLennan and other board members was strained. "That's rubbish, and I would go as far to say that (Mr McLennan's) continued involvement with this company is an absolute must. We personally get along really well," Mr Ellis said.

News Corp, parent company of The Australian, was created last June from the publishing assets of the original News Corp. The media conglomerate's entertainment assets became a separate company called 21st Century Fox.

Indicating a strong digital future for the company, Mr Thomson highlighted the $US25 million acquisition of Storyful, a Dublin-based company.