News Corp papers to launch new products, says chief

Rupert Murdoch’s newspapers, which will spin off from his 21st Century Fox entertainment businesses on Friday, are becoming “platforms” from which to launch products for smartphones, digital subscribers and international markets, according to the new News Corp’s chief executive.

Robert Thomson predicted “a year or two – no more – of transformation”, including “astute and acute” cost-cutting, investment in digital initiatives and collaborations between divisions. “These papers are no longer newspapers; they’re platforms,” he told the Financial Times.

He declined to echo Mr Murdoch’s statement last year that print losses would no longer be tolerated and would not detail the scale of planned job cuts from the integration of Dow Jones and the Wall Street Journal, but said the company’s titles must become more profitable.

The new company, whose assets range from a US coupons company to Foxtel pay-TV in Australia, was working on projects including a plan for the New York Post to compete nationally with digital news and entertainment brands such as Buzzfeed, he disclosed.

“Some of the most successful recent start-ups are basically ersatz tabloid journalism,” he said. “If we can’t do it better than they can, then we’re not as good as we think we are.”

Its UK papers were looking to repackage their football coverage for fans in Asia and Latin America. “Britain is to football what Saudi Arabia is to oil and we have a gusher coming out of London of fantastic football content.”

HarperCollins, the publisher, was similarly talking to executives from the Wall Street Journal and Amplify, its nascent digital education business, about products for teaching business English and translations of English books to sell from the Journal’s website in China.

Amplify, built from 2011’s $390m acquisition of Wireless Generation, is expected to lose $180m this year. Mr Thomson described its plan to create a digital curriculum for school maths, English and science as “an expensive proposition”, but one with a potential $17bn market opportunity.

News Corp competes with Pearson, owner of the Financial Times, in financial news, publishing and education. News Corp has made past attempts to encourage its brands to share content and he acknowledged that many media companies had failed to achieve the synergy benefits they touted.

“Almost to use the word synergy is a sin because it’s been so overused and abused,” he said, but said that the smaller company would encourage a stronger focus on collaboration. “We will have a single cost of content and multiple opportunities to profit by repurposing it,” he said.

Mr Thomson defended print newspapers as “ever more premium” means for advertisers to reach highly engaged readers, but said it now planned to use its scale in markets like the UK to secure reader offers from retailers and others to sweeten digital subscription packages.

Mr Thomson, the former managing editor of the Wall Street Journal and a one-time US managing editor of the FT, said it had been “less clear” how mass-market newspapers could charge online when so much general news was available for free, but described the planned promotions for digital subscribers as a solution. At a time when commoditised content was putting advertising rates were under “enormous” pressure, “you’ll be creating a popular paper demographic which is a paying demographic”.

He confirmed that News Corp could use its $2.6bn of net cash for acquisitions, adding that it could borrow more if needed. He played down expectations of a bid for another newspaper such as the Los Angeles Times. Any acquisition must complement existing assets, he added: “We can’t buy something for it to exist in splendid isolation.” Deals and investments could expand its exposure to Latin America or Asian markets from China to Vietnam, he added.

Acquisitions could help Dow Jones sharpen its rivalry with Bloomberg and Thomson Reuters, build on the REA online classifieds business in Australia or provide sports content for “second screen” mobile devices, echoing its recent Premier League rights deal in the UK, he said.

The spin-off takes place almost two years after News Corp closed the News of the World over phone hacking at the UK Sunday tabloid. Mr Thomson predicted “a certain amount of publicity over the coming months” as former editors and reporters including Rebekah Brooks and Andy Coulson face trial, but said News Corp had invested heavily in compliance since, adding: “One must presume innocence until or unless proven guilty.”