TRUTH TELLER: Rupert Murdoch made another push for paid content online and argued the vitality of the news business during an interview with Fox Business Network from the All Things D conference in Carlsbad, Calif. on Thursday. Murdoch, who as the head of News Corp. and owner of The Wall Street Journal has reportedly deployed a task force within his company to find strategies to monetize content from its papers, said one of the mistakes newspapers have made is rushing to the Web to get a bigger audience without charging users for their product. “You’re going to have to pay for your favorite newspaper on the Web,” he told Fox’s Brian Sullivan. “[Free content online]…that’s going to stop. Newspapers will be selling subscriptions on the Web. The whole thing [premium content] will be there. The Web as it is today will be vastly improved, there will be much in them and you’ll pay for them.” Murdoch forecast consumers will receive their news from mostly electronic forms within the next 10 to 15 years, as technology improves and rolls out to the public.

He also argued media companies would still be able to obtain investment from private equity, but said a bailout from the federal government is impossible. “We would never take money from the government,” he said. “We’d give up our freedoms and everything else to criticize or to play our full role in the community. Nothing that News owns will ever take money from the government and I don’t believe even The New York Times would. I don’t think the government would even do it.” Murdoch however, did predict the demise of one paper in Chicago. Being that both Chicago daily newspapers — the Chicago Tribune and the Chicago Sun-Times — are under financial pressure, “[In Chicago] one newspaper will go away. It’s very hard to see how the Sun-Times can keep going. I thought it was very hard 10 years ago when I owned it.”

This story first appeared in the May 29, 2009 issue of WWD.  Subscribe Today.

— Stephanie D. Smith

HEFNER’S DREAM: It’s been said Hugh Hefner hoped one day to hand off Playboy Enterprises Inc. to his sons, currently both teenagers, but now, sources say, the likelihood of Hefner having to sell his beleaguered empire has risen exponentially during the last month or so. And while the company would likely take meetings with any serious private equity bidders, many believe there aren’t any out there given the state of the credit markets — not to mention private equity’s less-than-stellar track record when it comes to takeovers of publishing firms.

Last week, the New York Post reported a price tag of $300 million for Playboy, a lofty figure given the times, although media observers say the brand has been underleveraged in several areas and still has the potential to make money beyond the magazine. Inside the halls of the company, the phrase, “Everyone makes money off Playboy, except for Playboy,” has been used when the quality of management is being discussed.

A few days ago, Richard Branson’s name was floated as a possible buyer but on Thursday, Virgin Group denied these claims to Reuters. “There is a good chance he will end up selling to someone, like a Branson,” said one source of the 83-year-old Hefner. “But they would probably have to create some kind of figurehead role for him. [Hefner] is definitely warming up to the idea of selling. Actually, that’s probably understating it.”

— Amy Wicks

IT’S ALMOST OVER: After spending the better part of a decade together, the doomed deal between Time Warner and AOL will soon finally come to an end. Time Warner said Thursday that once the pending separation is complete, AOL will be a stand-alone company, led by chief executive Tim Armstrong, who formerly worked for Google. “We believe that a separation will be the best outcome for both Time Warner and AOL,” said ceo Jeff Bewkes. “The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses.” Whether these include Time Inc., over the long term, is anyone’s guess. During a quarterly earnings call last month, Bewkes avoided making any future claims to Time Inc.’s place in the company. “Time Warner may well include publishing but we’re not making a religious statement about it either way at this point,” he said at the time — an ambiguous statement Bewkes hasn’t elaborated on since.

— A.W.

FIRST NEWSPAPERS, NOW BOOKS: An unforeseen perk of being half of a power couple is having a stand-in, so when Tina Brown lost her voice in the middle of a panel of book publishing chief executives Thursday, she had only to turn her head and croak her husband’s name before Sir Harry Evans bounded onstage to take her place. He recalled a New Yorker cartoon where a woman takes her husband around a cocktail party and entreats him to “‘tell them who you were!’ Well,” said Evans, “I ‘were’ a book publisher” — specifically, the editor in chief of Random House. Evans pressed the chief executives (Perseus, HarperCollins, Simon & Schuster and Macmillan were represented) on going after Google on copyright issues; they have, in fact, long been in litigation.

Before Brown left the stage, she got a chance to discuss media fragmentation and its affect on how books are marketed and sold, noting that in her experience, former standbys like “The Today Show” and “Good Morning America” weren’t necessarily moving copies. But the publishers told her that “viral marketing” wasn’t necessarily the answer, at least not consistently — one said a top-ranked YouTube video for a particular book had only caused a bump of about 200 copies. As for e-books, HarperCollins ceo Brian Murray said they currently comprise only 2 percent of the business. “Most of our monetization still comes from print,” he said, though he added that, “I think the business will eventually go in that direction.”

Brown also said she was surprised at how many people she knew who were reading books on their iPhones. In the back, an audience member remarked to a friend, “I think I need a new set of eyes.”

— Irin Carmon


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