Rupert Murdoch suggested the iPad and the Kindle would be 'unloved and unsold' without creativity from companies like his own. Photograph: Hector Mata/AFP
Sophisticated tablet computers, ereaders and smartphones would be unloved “empty vessels” without quality creative content, Rupert Murdoch said yesterday as his News Corporation empire opened a new front in its battle to get consumers to pay for journalism and entertainment.
Enjoying a boost from Hollywood film-making success and from the popularity of its Fox television network, News Corp returned to financial health with profits of $254m for the three months to December, compared with a $6.4bn loss a year ago after huge asset write-downs.
Murdoch said he was moving closer to imposing charges for access to all News Corp’s newspaper websites, including the Times, the Sun and the News of the World, and he revealed the company was in “advanced discussions” with handheld device manufacturers about a subscription model allowing consumers to access media content “whenever and wherever they want it”.
“Content is not just king, it is the emperor of all things digital,” said Murdoch. “We’re on the cusp of a digital revolution from which our shareholders will profit handsomely.” In a reference to hyped technology such as Apple’s iPad and Amazon’s Kindle, Murdoch said such “ingenious and fabulous devices” would be “unloved and unsold” without creativity from companies such as his own, adding that they were powered by content – not by batteries.
“Instead of the existential debate about value, now we’re merely arguing about valuation,” he said. “Consumers want content delivered immediately and on a variety of devices. They’re willing to be paid to be entertained and informed.”
Asked about a recent speech in which the Guardian‘s editor, Alan Rusbridger, argued that papers were “sleep-walking into oblivion” if they try to resist a trend towards free access, Murdoch said: “I think that sounds like BS to me.”
News Corp’s profits were hit by a $500m one-off charge to settle litigation brought by a US firm, Valassis Communications, which accused Murdoch’s empire of anti-competitive behaviour in its aggressive use of discount coupons for marketing.
But the company’s Twentieth Century Fox film studio, which made James Cameron’s blockbuster hit Avatar, saw its profits surge from $112m to $324m, aided by DVD releases of movies such as Ice Age: Dawn of the Dinosaurs and Night at the Museum.
News Corp is set to scoop a windfall in ticket receipts this year from Avatar, which recently passed Titanic to become the cinema box office draw of all time, and Murdoch said there had already been “very early talks” with Cameron about a sequel, although he added: “This being Jim Cameron, I certainly wouldn’t hold your breath on the timing.”
News Corp’s newspapers delivered a 29% increase in profits to $259m, aided by cost cuts at British titles and by a robust performance from the Wall Street Journal. Despite ongoing financial woes on much of Fleet Street, Murdoch singled out the Sun for praise, saying it had achieved record weeks of advertising revenue recently and that it had “left other papers far, far behind in the contest for readers“.
The group’s television stations also turned in higher earnings and are the subject of an initiative by News Corp to get cable networks to pay more to transmit Fox programming. But News Corp’s MySpace continues to struggle after losing a battle for dominance to Facebook. Murdoch admitted MySpace’s is “still not where we want it” despite job cuts and a refocusing on entertainment.
Andrew Clark in New York
The Guardian, Wednesday 3 February 2010