murdoch sees pick-up in advertising markets

UPDATE: Nat Worden | September 16, 2009
Article from: Dow Jones Newswires

NEWS Corporation chief executive Rupert Murdoch said today that US advertising markets were "very much better than they were four months ago," adding momentum to the improving sentiment on Wall Street and in the media industry.

Separately, Mr Murdoch said The Wall Street Journal would start charging users for accessing the paper on mobile devices such as Research In Motion’s Blackberry smart phones and Apple’s iPhone.

He said newspaper subscribers would pay $US1 ($1.16) a week for mobile access, while others would pay $US2 a week.

He also noted that News Corp was mulling plans to charge online subscriptions for Hulu, the popular video website it launched with big media partners such as NBC Universal. NBC Universal is 80 per cent owned by General Electric and 20 per cent by Vivendi.

As for ad spending, Mr Murdoch said it remained nowhere near where it was in 2007, noting that revenue from News Corp's local broadcast stations were down 20 per cent from last year, but he said the results have been "getting better every month and getting better every week".

"I'm not an economist, but my guess is that the consensus is about right, and (the economy is) going to get a nice bump, and then it will settle back to a fairly slow recovery," Mr Murdoch said at a media conference sponsored by Goldman Sachs Group.

Mr Murdoch said News Corp would likely hold on to its cash flows now, adding that he was pleased the company didn't listen to Wall Street analysts and hedge-fund managers who encouraged the company to take on debt and buy back shares when the economy was booming.

"If we had followed their advice, we'd be billions (of dollars) more in debt now," Mr Murdoch said. "We're feeling very safe now."

News Corp owns The Australian and Dow Jones & Co, publisher of The Wall Street Journal and Dow Jones Newswires.

Murdoch acknowledged that News Corp's film business suffered financially from a weak line-up of movies in the first half, but he said that was changing.

"We have a great slate of films lined up," Mr Murdoch said. "The film business is a place where I feel very confident."

Mr Murdoch said the DVD retail market remained in decline, but that the video-on-demand business from cable and satellite companies was growing, although it wasn't yet making up the difference to film studios.

Mr Murdoch said News Corp remained focused on news as a valuable media product to consumers, despite the turmoil that has been created by the internet in the economics of the news business.

"These are very complex times, and news is more valuable to people than it has ever been," Mr Murdoch said.

The media mogul said that, in the future, he expected consumers to read news on portable, electronic devices rather than on the printed page, but he reiterated his dissatisfaction with the company's distribution agreement with Amazon's Kindle reading device.

"We're not altogether happy with it, and I don't think (the Kindle is) a good experience for reading news," he said, citing navigation problems.

"The Kindle is a wonderful machine for reading books."

Mr Murdoch said the new version of Sony's reading device, which will be released soon, offers a better experience.

"That is good, and we have very good terms there," Mr Murdoch said.

"We'll do everything we can to drive that one."

http://www.theaustralian.news.com.au/business/story/0,28124,26080850-7582,00.html