Like he has in the past, Rupert Murdoch declares that his newspaper and local TV ad businesses are doing terribly, but that the rest of the company is growing great guns. Or at least enough to ride out a downturn.
And New York Times readers and/or employees who fear that Rupert was going to buy the crown jewel of American journalism can relax. Not going to happen, he says.
Joining late...
"Hard times are good for big companies"
Biggest challenges/uncertainties for next few years?
I don't see uncertainties. I can't see the future. But consumer advertising - newspapers all over the world and local stations in our case - is bad. But we have big profit drivers (cable, etc) that can counter bad things happen to us in traditional advertising.
Most resilient? The WSJ. But that's really b2b advertising, not consumer. And you're going to be surprised how fast we'll grow in Internet activities. But if you're talking about what's going to come back fastest - local TV, etc, I don't know. "The local television market in this country - there's no point in hiding it. It's bad." Car ads make up biggest component of local tv and that's down significantly. UK slowdown started later than U.S. Australian slowdown just starting now.
Trying to exit outdoor business internationally. We have preliminary agreement to sell to sell Russian business, etc. But you look what happened in the Russian market last week, and I'll believe it when I see it.
Investing in other markets vs. buybacks? Very interested in India. Star does that, but also looks at smaller territiories, Malaysia. Starting to make films in India, more TV programs. We're extending everywhere. We see ourselves as a creative company. The distribution is secondary, and we'll do more of it, because it gives you secure company. Our business is going to be moving farther and farther away from traditional consumer advertising and toward subscription models.
We're not a big creative music company - we don't want to be. On the other hand, I think either yesterday, or today, we're launching MySpace Music [memo to Chris DeWolfe - give Rupe a heads up!] and that's going to do well. Hulu already the biggest distributor and seller of TV and movies on the Internet. And the stuff we sell there we get a big margin for.
Stock price to low? Sure. But too much work to please the analysts. Whenever we do something, the analysts kill us. "When I bought MySpace, they said `He's a frickin idiot. Mad!' A year later ,they were saying it was worth $20 billion or something, which it certainly isn't." Same thing with Fox News.
On WSJ.com. We're going to be getting revenues of $100 million in advertising. Look at the new redesign. Under the new scheme, the home page ad, which is not to big or too dominant, we're charging $100,000 per day on the home page. On MySpace, the first year or two, we screwed up the selling of that. But now we're selling the MySpace home page an average of $500k per day, up to $1M. So this will be a big deal for us.
MySpace: Ambitious budget but we've certainly made it for first quarter. Who knows what the next 9 months will hold.
Fox Business, we hopefully we lose as much as we lost in the half-year last year. It will be a three-year thing but we're confident it will be very valuable asset.
Let's talk about print advertising at Dow Jones: Everyone here hates it but we're actually increasing print ad revenues. New magazine, Barrons. Advertising at European edition up 35% and Asia edition up 25%. There's obvious demand.
Would the DOJ allow you to buy the NYT? "I don't know. I've never asked them. Whoever wrote that crap, it's nonsense. I'm not interested. We're not interested in buying any more newspapers. We're happy with what we have."
MySpace: Where are you at monetizing current inventory on MySpace? "I think we do it enough, except we don't charge enough, and we're in danger of cluttering. I'd rather we have fewer ads and charge more."
Google relationship? "It's going fine. They knew they wouldn't make the $300 million the first year, and they wouldnt' make it the next year, and by the third year they'll be very close. But take a look at the market out there. If they didn't renew, Microsoft would be out there in a minute with a big check."
On to film. We had a bad summer. We expected a bad summer. Some films moved late, but whatever. One little film we put out turned out to be a dog. But no matter. We had a good 50/50 partner. But starting at Thanksgiving, and then Christmas, and then into next year, we have great films. Night at the Museum sequel; X-Men sequel, Ice age sequel...we'll absorb costs this year and the really big films will throw off profits in 2010.
What do you think about bidding on Olympics down the road? "I think NBC capitalized pretty well. They don't have much else going for them right now." But who knows? They're launching 9 new shows. Maybe some will be good. We launched 1 new show this fall. Launched last night, did well. World Series should be good for us, if you have the right teams in there (Rupe doesn't want to see the Minnesota Twins in the October classic, we're guessing).
The advertising on the Fox broadcast network is good. Upfront holding up very well, we've had almost no cancellations, and scatter selling very well. It is pretty competitive out there, but we are selling at higher rates than the other. We're at least on target for the network.
Succession plan for Roger Ailes? He's not going anywhere. He's very happy. (We bet!). I'm very happy with him. We're good friends and we get on well. Are there good people in the company that he's developing? You bet.
Big picture re: acquisitions? We're not doing anything while the future as murky as it is. We'll give it another 6 months, 9 months, who knows.
See Also:
MySpace Music Launch Delayed?
Chernin: MySpace Ad Sales 'Above Where We Expected Them To Be'
Murdoch: I'll Do Business Anywhere - Except Russia
