On News Corp.'s (NWS) fiscal-year-end earnings call with analysts, the notoriously shoot-from-the-hip mogul suggested that The Wall Street Journal will cease to be available on the Kindle e-reader unless Amazon starts offering a more generous revenue split and more publisher-friendly policies.
Murdoch acknowledged that the Journal recently negotiated a slightly larger share of the revenues Amazon gets from selling Kindle subscriptions to the paper, "but it's not a big number, and we're not encouraging it at all because we don't get the names of the subscribers," he said. "Kindle treats them as their subscribers, not as ours, and I think that will eventually cause a break with us."
Jeff Bezos, consider yourself warned.
On the call, News Corp. announced adjusted full-year operating income of $3.6 billion, a 32 percent year-over-year decline largely attributable to the advertising recession afflicting print and broadcast television. Much of the call was devoted to News Corp.'s intensive drive to get consumers to pay directly for digital content of all kinds. Murdoch revealed that the company plans to introduce pay models for all its news websites by the end of the next fiscal year. Moreover, he said that it won't be only the newspaper sites that adopt this change; foxnews.com, he said, will also start charging for content. "It has a huge and loyal and profitable [web] audience already," he said.
"As I've said before, the traditional business model has to change rapidly to ensure that our journalistic businesses can return to their old margins of profitability," Murdoch said. "Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting."
Other highlights from the call:
-Murdoch on this year's television advertising: "We're doing well, or we think we're doing well, on the pricing, but we'll probably keep more back for the spot market than last year....There's money around. I'm not saying there's a vast recovery or anything like that, but we are in the process of reaching understandings with a lot of advertisers."
-On whether News Corp. will develop its own e-reader to compete with the Kindle: "We're not in the hardware business."
-On rumors that Guardian Media Group may close the Observer: "I did read that document that went to the staff of the Guardian that swore allegiance everlastingly to the Guardian but said nothing about the Observer. I think I made the same conclusions as everybody."
-On whether News Corp. would buy the Observer: "Hell no. Why?"
