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8 News Corporation
Our most
fundamental
belief is that the
combination of
free speech and
free markets is
the most effective
guarantee of
a free society.
A Letter from Rupert Murdoch
Headwinds in Publishing
Looking at our Publishing segment, we experienced significant momentum in the
first half of last year. However, a softening ad market at our U.K. and Australian
newspapers, as well as challenges to News America Marketing in the U.S., offset
many of those early gains. Clearly we have some hurdles, but the geographic mix
of the business and its growth prospects remain highly attractive.
The Wall Street Journal is a good example of what we can do. Earlier I mentioned
that our expansion onto digital platforms has helped boost circulation. That has
translated into revenue: in 2011, print and digital circulation revenues were up
12 percent over the year before, while our print and digital advertising revenues
were up 11 percent.
Positioning for Improvement in Digital
Finally, in our Other segment, we experienced a difficult year. The disposition of
Myspace was a necessary adjustment to new realities. When we bought Myspace,
our digital strategy centered on acquiring standalone properties. Going forward, our
focus is on extending our core businesses and popular brands over emerging digital
platforms, including tablets and smart phones, along with expanding services such
as iTunes and Netflix. At the same time, we are zeroing in on rights clearances to
ensure that we can better profit from our overall monetization from these trends.
I believe the opportunities digital has put before us are virtually boundless. Yes,
they pose some obvious challenges. We have, however, learned a great deal from
our hands-on experience these last few years. Going forward, we will capitalize
on taking what we do best – telling stories, entertaining people around the globe
and bringing the best news and information to consumers across a broad spectrum
– and extending this content to new platforms, all while developing new business
models to support these new consumer experiences.
Issues Surrounding
News of the World
As has been widely publicized, our Company has received a major black eye from the
phone hacking scandal at our News of the World newspaper in the U.K. As I said at
a Parliamentary hearing, this episode has been the most humbling of my career.
Let me be clear: the behavior carried out by some employees of News of the World
is unacceptable and does not represent who we are as a Company. It went against
everything that I stand for. That behavior betrayed not only our readers, but also
the many thousands of magnificent professionals in every one of our other divisions
around the world. It was a painful decision to shut down the News of the World,
but it was the right thing to do.