Twenty-First Century Fox 2004 Annual Report Download - page 9
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largest TV markets in the
U.S. and to use our breadth to
acquire quality program-
ming at fair prices.
STAR, our pan-Asian chan-
nels business, continued its
positive momentum, report-
ing a second consecutive
year of solid profitability.
Earnings were up substan-
tially over last year, largely
on the strength of rising
subscription and advertising
revenues at our thriving
Indian business and the devel-
opment of our general enter-
tainment channel in China.
We’ve also been very
aggressive in devising new
ways to reach advertisers
as audiences continue to
decline at the U.S. broadcast
networks and personal video
recorders (PVRs) become
more common. The challenge
for us – and for all broadcast-
ers – is to stay ahead of these
developments: to fashion
alternatives to the 30 second
advertising spot that has
been the industry’s lifeblood
for nearly 50 years. A team
of executives today is hard
at work looking at such
alternatives as in-show prod-
uct placement and corporate
sponsorship as ways to keep
advertisers associated with
our content. At the same
time, we are constantly exam-
ining new ways to monetize
our content, as we’ve done in
launching the TV DVD mar-
ket. Like digital copyright,
this is an issue with immense
long-term implications if
ignored and we are devoting
much time and effort into
staying ahead of it.
One prominent area of the
Company that has certainly
benefited from innovative
and bold thinking is our
Cable Network Programming
segment. Fiscal 2004 operat-
ing income increased 43
percent – the third consecu-
tive year of strong double
digit growth – with explosive
gains achieved at all three
of our primary channels:
FOX News, FX and Fox
Sports Net.
At FOX News, the story
was much the same as fiscal
2003, only better: ratings
supremacy matched with ris-
ing advertising revenues.
Once considered a potential
long-term drag on earnings,
the channel is now one of
our key growth drivers, par-
ticularly once its original
affiliation agreements begin
to expire in 2006 and we are
able to renegotiate carriage
rates in line with the chan-
nel’s superb performance.
FX continued to distinguish
itself with original pro-
gramming such as Nip/Tuck
and The Shield. Like FOX
News, it is poised for larger
affiliate revenues as it
begins to renegotiate its
original agreements. And at
Fox Sports Net, higher sub-
scriber numbers and higher
affiliate rates contributed to
a double-digit revenue and
profit increase at our local
sports channels.
We should all be proud of
the successes we achieved
across our newspaper busi-
nesses, which performed well
in highly competitive mar-
kets. The segment reported
revenue and operating profit
increases of 26 percent and 48
percent respectively, due in
part to the absence of a cover
price war at The Sun in the
U.K., but also due to higher
advertising and circulation
revenues at nearly all of our
major papers. Among some
of the more significant devel-
opments within this seg-
ment, The Times took the
bold gamble of introducing
a compact edition, and
the public enthusiastically
embraced it. Defying the
skeptics and traditionalists,
overall circulation for the
two papers was up following
the compact’s introduction.
The Sunday Telegraph,
Australia’s largest selling
paper, increased its margin
over its main competitor to
more than 200,000 copies,
while in Melbourne, The
Herald Sun maintained daily
sales more than 350,000 ahead
of its chief rival. And The New
York Post continued its torrid
pace, recording its eighth
straight double-digit increase
in circulation for a six-month
reporting period. It is the
fastest growing daily news-
paper in the U.S., and is
poised to soon surpass its
chief tabloid rival.
One of the genuine high-
lights of the past year was
the worldwide newspaper
conference we convened in
Mexico this past March. 200
employees from every aspect
of our newspaper operations
came together for four days
of intensive discussion on
virtually every facet of news-
paper publishing. What made
the conference so worthwhile
was the frank exchange of
information. The opportuni-
ty to learn from one another
– to share ideas with the
best minds in the industry
from around the globe – is
something we intend to
pursue even more aggressively
in the coming years.
Our other print businesses
also achieved growth and
sustained momentum. News
America Marketing, our
coupon and in-store market-
ing business, generated a
6 percent improvement over
last year. HarperCollins,
led by the astonishing per-
formance of The Purpose
Driven Life, had another
year of record profits and had
97 titles on the New York
Times bestseller list. And our
Washington-based magazine
The Weekly Standard is widely
considered to be one of the
most influential opinion
journals on the American
political scene today.
Events such as our world-
wide newspaper conference
and the launch of SKY Italia
are good examples of the
tremendous power that can
be realized from our global
enterprise. By harnessing
the experience and practical
wisdom that comes from
operating in different envi-
ronments and confronting
different challenges, our
company has a great advan-
tage over our competitors.
The coming years will be a
time of dynamic change.
Ideas not yet dreamed of
will surely reshape the
media industry and our way
of life. These days of swift
change can be a source of
either dizzying fear or
boundless excitement. Our
tradition at News Corp. is
not only to embrace these
transformations, but to drive
them. This is not a company
that sits still or basks in the
light of past achievements.
We do not allow ourselves
the luxury of self-satisfac-
tion. There is still so much
more that we can and will
accomplish. And it is with
tremendous excitement that
we look ahead to another
year, and many more to
come, of building a media
company capable of great
things and the ability to
better the lives of all our
readers and viewers.
Filmed Entertainment
Television
Cable Network Programming
Direct Broadcast Satellite Television
Magazines and Inserts
Newspapers
Book Publishing
Other
5,187
4,486
5,027
4,763
2,538
2,270
979
923
3,425
2,718
1,276
1,162
1,665
220
862
932
Revenues by Industry Segment: 2004 versus 2003 (U.S. Dollars, in Millions)
The opportunity to learn
from one another –
to share ideas with the
best minds in the
industry from around
the globe – is something
we intend to pursue
even more aggressively
in the coming years.
NEWS CORPORATION ANNUAL REPORT 2004
■2004
■2003
Note: These financial highlights are taken from the Concise
Financial Report.
Note: DBS segment was consolidated as of April 30, 2003
and had only two months of results in prior year