paidContent:UK news watch | News Corp.

Newspaper Ethics Scandal Has Not Yet Hurt Sun Sales

2012-02-12T20:48:27Z

While the UK’s media ethics furore ended up closing the News Of The World last year, how did News Corp.‘s next-best-selling UK newspaper fare?

Figures show The Sun lost 15 percent of its circulation (470,979) through the last 12 months…

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But don’t go thinking negative perception radiating from its Sunday stablemate was to blame. Last year’s sales pattern merely followed that which has flowed for the last decade…

That is, The Sun’s circulation dips in winter before recovering in January. Rinse, repeat.

It never recovers enough to make up for a creeping and long-term decline. The Sun’s circulation has been falling for all the last 10 years - it i now almost a quarter down on this time a decade ago.

But this is about the same rate of decline shared by the industry as a whole, and has more to do with wider consumer factors like new technology choices than with phone hacking.

The point is, the Sun so far has been unhurt by the whirlwind surrounding it. But, now that the arrests of several senior journalists have dragged its own practices in to question, let’s watch to see if that changes.

The Sun, despite its circulation decline, remains profitable. After all, when proprietors cut costs, they can keep profit. Indeed, it supports its stablemates The Times and Sunday Times.

News Corp: Earnings Surge But Scandal Bill Hits $104 Million

2012-02-08T22:48:05Z

News Corp surpassed analyst expectations in quarterly earnings announced today, but the numbers reflected two wildly divergent trends.

On one hand, the company posted impressive growth in its TV, cable and movie businesses. These segments resulted in a $210 million year-over-year quarterly earnings increase and adjusted earnings per share of $0.39 which is better than the $0.34 analysts had predicted.

At the same time, the company announced a 43 percent decline in its publishing business and a quarterly charge of $87 million related to the UK phone hacking settlement.

On an afternoon earnings call, News Corp executives said that about 85 percent of the charge was for lawyers and advisers and the rest for legal settlements. They added that they could not go into details about future settlements but that the “priority is to make this right.” The company says it spent $104 million in 2011 on costs related to the investigation.

The hacking-related charges were not included in the publishing category where the company’s UK and Australia newspapers are experiencing collapsing revenues. The company also said it expected income from its UK newspapers to drop $150 million in the coming year.

Publishing reported second quarter segment operating income of $218 million, a $162 million or 43% decrease compared to the $380 million reported a year ago, reflecting lower advertising revenues at the Australian newspapers and the integrated marketing services business, as well as the absence of contributions from the closure of The News of the World in the U.K.

Analysts, however, appeared less interested in the scandal than in the company’s surging TV and entertainment businesses. The strong performance in these segments was driven in part by the popularity of Fox (NSDQ: NWS) News, FX cable and hit movies like Rio and an Alvin and the Chipmunks.

News Corp also enjoyed strong results from its affiliate BSkyB (NYSE: BSY) which posted improved quarterly income of $174 million compared to $109 million one year ago.

The company also said it expects a reinvigorated performance from Dow Jones as a result of a new CEO, a strong brand and new digital platforms.

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A Second News International Paper Faces Questions In Hacking Investigation

2012-02-02T21:56:13Z

The hacking investigation that led to the shutdown of News of the World has spread to another News International newspaper, The Times, police correspondence sent to campaigning MP Tom Watson shows. And its editor has been recalled to discuss it at the government’s hearings on media ethics.

The matter apparently concerns former Times media reporter Patrick Foster, who allegedly unmasked an anonymous police blogger by guessing his way in to his target’s Hotmail account, reports say (Guardian, PA).

The disclosure of the identity of the blogger, detective Richard Horton, led to Horton being disciplined by his employer, Lancashire Police. But The Times also gave its reporter a written warning for professional misconduct, editor Jeremy Harding said at the Leveson public inquiry last month.

At this stage, the email hacking incident appears to have been isolated, unlike phone hacking at News Of The World, which has been described as of “industrial scale.

Foster was “dismissed following an unrelated incident” in 2011, News International CEO Tom Mockbridge previously told Leveson.

Foster is now a freelance reporter. Ironically, since he left The Times, he has freelanced 31 pieces for the media section of the Guardian, which has led the way in covering the phone-hacking scandal. His pieces including at least one piece about the scandal itself.

Disclosure: Our publisher, ContentNext Media, is a wholly owned subsidiary of Guardian News & Media.

Bloomberg's Lex Fenwick Named Dow Jones CEO

2012-02-02T20:03:07Z

News Corp. (NSDQ: NWS) has appointed Lex Fenwick as the CEO of Dow Jones & Company, filling the position left open following Les Hinton’s resignation in July.

Fenwick has been at Bloomberg for the past 25 years, most recently as founder and CEO of VC fund and startup incubator Bloomberg Ventures. Before that, he was CEO of Bloomberg LP. His new position is effective February 13. He will report to Chase Carey, President and COO of News Corp.

The Financial Times reported last week that Fenwick was in the running for the Dow Jones CEO position, noting “the talks with Mr Fenwick surprised some media executives, who noted his limited experience with advertising, one of the biggest sources of revenue for the Wall Street Journal, and with editorial operations. Bloomberg News was under the command of Matt Winkler while Mr. Fenwick was chief executive.”

In a statement, News Corp. chairman and CEO Rupert Murdoch said, “We have clearly established WSJ as the premium consumer newspaper and we are thrilled that Lex will be driving our plans to grow all our Dow Jones franchises into true innovative market leaders for today’s digital world. We believe our enterprise business has the potential to follow the brand’s success in the consumer space, and be the premier product in providing the kind of hard-to-find, premium content that the financial customer demands. We are committed to making it happen and we think Lex is the executive to get us there.”

release

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As Sky Growth Slows, Can Internet Defend It From Downturn And New Rivals?

2012-01-31T10:03:19Z

BSkyB’s financials are still improving, but the company is now flaunting a range of new internet upgrades to try containing subscriber growth slow-down and potential threats from newcomers.

TV subscriber additions fell to 40,000 in Q2, from 140,000 the previous year. CEO Jeremy Darroch conceded to City analysts: “Some people are uneasy about making a long-term commitment right now.”

But half-year operating profit rose 16 percent to £601 million on six percent higher revenue of £3.36 billion and average annual customer revenue rose £8 to to £544. Total customer base grew 100,000 to 10.4 million.

“The company made a number of announcements which confirm that – beyond the near term slowdown – structural issues are looming,” Bernstein analyst Claudio Aspesi writes in a research note.

“While we believe the Pay TV business is inherently more defensive than advertising-funded ones, the depth and length of the downturn in the UK economy are still unknown: any significant changes to our forecasts for the UK TV ad market could be large enough to change the outlook for the stock.”

In the worsening consumer economy, Sky is trying to sweeten existing subscribers with new accessibility…

Device access for subscribers: Sky Go, for watching Sky on non-satellite devices, got 1.5 million unique users in December and is launching on Android in February, with new channels Sky 1, Sky Living, Sky Arts 1 and Sky Sports F1 being added.
Public WiFi for subscribers: Sky is about to launch its public WiFi service based on its The Cloud acquisition, giving Sky Broadband Unlimited customers free access to over 10,000 public hotspots.
Fibre premium, wider footprint: Fibre broadband launching from April at up to 40Mbps for £20 per month. Meanwhile, Sky is extending its copper network to 88 percent of UK (an extra million homes) by June 2013.

And there are new threats…

Cheaper internet TV alternatives: Sky will de-couple its movie, sport and entertainment content from satellite by taking it to the coming wave of connected TV owners as post-satellite pay-as-you-go pay-TV - an attempt to head off internet TV apps from operators like Netflix (NSDQ: NFLX), Lovefilm and Blinkbox.
Premier League bidders: Al Jazeera Sports may bid up renewal prices in the next rights round. “We’ll have to see what noise there is in the market and who we think may be there,” Darroch told analysts. “It is a blind auction, it’s a sealed bid, but it goes through rounds. Not all packages are awarded in the first round.”

“The unbundling of pay-TV appears a direct response to the launch of Netflix, but also seems to suggest that additional growth through the old model of bundled pay-TV through satellite is coming to a natural end in its growth,” Bernstein’s Aspesi writes.

“The performance of BSkyB (NYSE: BSY) hinges on the continued availability of premium content in the face of possible new entrants determined to build competitive pay-TV businesses over different platforms.”

Sky Will De-Couple Pay-TV Content From Satellite For IPTV Era

2012-01-31T08:46:00Z

BSkyB (NYSE: BSY) is acting to head off rising City concerns about the threat from over-the-top connected TV services, by announcing it will launch, by the summer, its own such service that does not require a satellite subscription.

The as-yet-unnamed and unpriced service will offer Sky Movies, Sky Sports and entertainment over a swathe of devices including tablet, mobile, console and connected TV. There will be no minimum contract and “a wide variety of pricing options”.

It may not look like it today, but this may turn out to be one of the most significant developments in Sky’s history.

Sky has offered TV to internet devices since 2006 but, currently, all such efforts, including Sky Go and the Sky News iPad app, are geared at providing enhanced value for existing Sky satellite subscribers. Where Sky has allowed non-satellite subscriptions, they have been so prohibitively priced relative to satellite that the idea has, in essence, been to drive satellite subscriptions.

The risk for Sky was that the new wave of internet TV services - including from consoles, dedicated boxes, integrated connected TVs that ship with thousands of free on-demand services and the emergence of cheaper over-the-top operators like Netflix (NSDQ: NFLX) and Blinkbox - would tempt existing and new consumers away from the core Sky satellite option.

Already, Sky TV sign-ups are slowing - down to 40,000 in Q2, from 140,000 the previous year, Sky announced on Tuesday. “Some people are uneasy about making a long-term commitment right now,” CEO Jeremy Darroch conceded to City analysts.

So it is logical for Sky to turn that threat in to an opportunity - the opportunity to take its top-tier pay-TV content to a new generation of otherwise pay-TV refuseniks, minus the cost of satellite.

Consumers are expected to be able to subscribe to Sky on YouView; TVs from manufacturers like Samsung, Sony (NYSE: SNE) and LG; (SEO: 066570) Xbox; iPad and more.

Sky has been wedded to and defined by its satellite distribution system since launching it in 1990. But, by allowing customers to subscribe to Sky Sports, Sky Movies and so on directly on the internet TV they buy in 2012 and beyond, Sky is de-coupling its content and its distribution platform in the future.

CEO Jeremy Darroch told analysts: “It will give another choice to the 13 million UK households that have chosen not to subscribe to pay-TV. It will be a new way to reach out to consumers who love great content but have no need for the full range of Sky services.” There will be “no infrastructure investment”.

“Beyond the near-term slowdown, structural issues are looming,” writes Bernstein analyst Claudio Aspesi in a research note. “The unbundling of pay-TV appears a direct response to the launch of Netflix, but also seems to suggest that additional growth through the old model of bundled pay-TV through satellite is coming to a natural end in its growth.”

Fascinating to watch Sky reinvent itself in OTT world. My prediction- number of subscribers to its core satellite service to halve by 2015.
— Wil Stephens (@wilstephens) January 31, 2012

Sky will lose a lot of its turnover but become immensely profitable as it strips out huge infrastructure costs associated with legacy biz.
— Wil Stephens (@wilstephens) January 31, 2012

Sky Adding Broadcaster-Branded VOD Services From BBC And ITV

2012-01-30T10:23:58Z

The UK’s leading pay-TV provider BSkyB (NYSE: BSY) is taking a significant step to improve its PVR box’s new IP on-demand TV service by adding catch-up TV services from the BBC and ITV.

After months of negotiating, which paidContent reported on in August, BBC iPlayer and ITV (LSE: ITV) Player will be added to the Sky+ box’s Anytime+ service later this year.

But Sky, which had wanted to syndicate the broadcasters’ shows and not their branded services, has softened on its determination to own the customer experience...

Both the BBC and ITV services will be explicitly branded “iPlayer” and “ITV Player”, will live in their own areas with distinct looks and feels, and editorial control for their front pages will rest with the broadcasters. They will look more like their equivalent web products than like Sky’s typical system of blue menus.

Previously, Sky customers had to actively record BBC and ITV shows using their Sky+ PVR. The Sky Anytime, pseudo-VOD service had also pushed a selection of shows to PVR overnight. Now customers will get access to most BBC and ITV shows from the last seven days, and often longer. Sky has also signed a deal for ITV archive shows.

Such services have fast become a baseline necessity for any modern TV service. Virgin Media’s rival pay-TV service had both iPlayer and ITV Player with its TiVo (NSDQ: TIVO) and previous boxes. Smart TVs are shipping with these services already integrated and interim internet TV boxes like Roku are all shooting for similar.

The risk was that customers would start to see greater VOD value in free-TV options like smart TVs than on pay-TV services like Sky.

It was important that, ahead of Tuesday’s Q4 earnings statement, Sky shows investment analysts it has a coherent VOD strategy.

Currently, Anytime+, which lets viewers watch shows by plugging a broadband Ethernet cable in to their PVR tuner box or by buying a WiFi dongle, includes on-demand shows from MTV, Discovery, FX, History, Disney (NYSE: DIS), UK TV and National Geographic Channel, as well as Sky’s own-brand channels.

Channel 4’s 4oD, Channel Five’s Demand Five and S4C’s S4/Clic VOD services are as yet absent from Anytime+.

Meanwhile, Sky is dropping its requirement that Anytime+ viewers must have a Sky broadband connection.

Anytime+ is now used by 1.2 million Sky customers, but Sky wants to hike that to five million.

The Times And Spotify: Why Pay When Everything's Free?

2012-01-30T09:12:31Z

I’ll bet The Times sub-editors raised some eyebrows when their business writer Emily Ford filed her piece, Why I’m not paying any more, for the weekend…

“As (Spotify) got bigger, the annoying adverts started to creep in and, with them, the gnawing sense that it was unfair to get so much use out of a service without paying. So a year ago, I went premium…

“But last week I reverted back ...

“For me, Spotify is a victim of the conundrum that almost all internet industries have yet to resolve — when you can get something so good for free, why pay?”

That is ironic because it is the same argument some onlookers use to suggest The Times’ own payment strategy “won’t work” (you’ll need to be a subscriber to read Ford’s piece).

Let’s compare…

Spotify’s raison d’être is making the listening experience so appealing and easy that people will want to pay for it rather than download illegally or elsewhere for free.

It’s having some success within that. Having racked up three million paying subscribers from an apparent 15 million active users for a conversion rate of 20 percent, it has built the world’s largest music subscription business.

That is at a price slightly more than The Times’ own monthly news package, which does not come with a free trial in the same way Spotify does.

By contrast, The Times website has slipped from around 20 million unique monthly users to 115,000 paying online subscribers - a 0.57 percent conversion.

This, however, is not a like-for-like comparison. Only a minority of The Times’ total, pre-paywall monthly uniques could ever have been considered “active” (ie. core, regular) readers, in the same way Spotify describes them. Current online subscribers as a percentage of this figure are likely far higher.

By the same token, were Spotify to express its subscriber count as a percentage of total users, it would shrink drastically. That is especially so since, lately, its first-time, free user base has been inflated by its Facebook promotion.

Jesta Digital Finally Kills Bitbop Mobile Video Service

2012-01-27T17:39:05Z

It looks like the death spiral that was the Bitbop mobile video service is finally no longer. PaidContent understands that the service—once built and owned by News Corporation (NSDQ: NWS) and sold, along with the rest of Fox Mobile, to IT services company Jesta when News Corp. couldn’t make a business out of it—is today laying off most of the staff that worked on Bitbop and shutting down the service.

According to a source, there are about 50 people getting laid off—people who worked on the Bitbop mobile video service. A small group will stay on to help with the final wind-down of operations, which should take about four weeks. The services that were live in the U.S. and Germany are getting shut down today, we have been told.

There were once big hopes for Bitbop, but things took a challenging turn as competition in the form of Hulu, Netflix (NSDQ: NFLX) and others invested heavily in their streaming services and delivering them to mobile devices.

However, this is not the end of Jesta Digital. The Jamba ringtones business—a German company that News Corp. once paid nearly $400 million to purchase in 2008—is still a healthy cash generator, and it will continue to operate.

Bitbop is understood to have some 20,000 subscribers who pay $9.99 per month to receive premium mobile video services. But with the service never getting a coveted outlet via an iPad app, it’s had a hard time scaling up, and with many of its original content deals up for renewal at the moment, it looks like it became clear that Bitbop’s business model was no longer sustainable.

Earlier in January, we noted the problems at the company, including some executive departures. At the time, Jesta told paidContent in a statement that it would continue to develop new mobile products in the future, without specifying what they were.

We will update this story as we learn more.

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Rhapsody Goes To Europe As New Music Services Compete, News Corp's Fails

2012-01-26T11:38:35Z

Chasing the post-download digital music opportunity, veteran services are seeking scale to fight dominant newcomers, whilst strangers from outside the space are launching their own new services with mixed success.

The Incumbent

On the eve of the big Midem music conference in Cannes, Rhapsody today says it is moving in to Europe by acquiring Napster International, the division service the UK and Germany. That is the latest piece of the jigsaw after the company in October announced Napster’s U.S. acquisition from Best Buy.

The company pioneered the unlimited music space in 2001 but, despite turning around customer decline following its spin-out from RealNetworks (NSDQ: RNWK) and Viacom (NYSE: VIA), its subscriber base has been overtaken four-year-old Spotify.

Last disclosed user counts were 750,000 versus 2.5 million. Napster brings an estimated 350,000 extra customers to Rhapsody. The combined figure of over a million, which Rhapsody itself disclosed on Thursday, is still shy of Spotify, but moving in to the big new territory of Europe - just as, vice versa, Spotify has embraced Rhapsody’s U.S. patch - could grow Rhapsody’s customer base further.

In Europe for the first time, Rhapsody will migrate Napster subscribers to its own platform in March, introducing its own web player, but the Napster brand and employees will remain in place in the UK and Germany.

What’s Happening

Rdio, Mog, Spotify, Rhapsody, We7 and all manner of others are jostling for early dominance in a promising new paid content sector that has been ignited by mobile and by music labels seeking new growth after the slowdown of track sales.

Global music subscribers grew by 65 percent to 13.4 million in 2011, according to labels’ IFPI umbrella. But that is peanuts compared to what the sector could become as consumers switch from ownership to access. The opportunity is to create an iTunes beater.

Labels’ support has opened a window of opportunity for new entrants to race to own this new area. Here are the latest…

The Massive Failure: News Corp

Beyond Oblivion, a fatally-named, New York-based unlimited music service invested in by News Corp and Allen & Co’s Stanley Shuman, has filed for bankruptcy, owing between $100 million and $500 million despite having not yet launched.

The company owes Sony (NYSE: SNE) Music Entertainment and Warner Music Group (NYSE: WMG) $50 million each, Reuters reports. News Corp.‘s digital chief Jon Miller is a board director.

Reasons for the collapse are not clear. News Corp had invested just $9.2 million for a 23 percent stake in April 2010.

The Fringe Player: Aspiro

Norway-based Aspiro, which provides its music service WiMP through ISP and white label partners mostly in Spotify’s backyard of Scandinavia, on Thursday announced its latest ISP partner, the Netherlands’ Ziggo. The deal guarantees Aspiro at least nine million Swedish krona ($1.3 million) over two years.

Aspiro is now active in Sweden, Norway, Denmark, Portugal and the Netherlands but wants to expand in to new territories and is in the process of rolling out to Ireland and Germany.

The Radio Player: Pure Music

DAB and internet radio maker Pure on Thursday unveiled its own unlimited-access cloud music service, Pure Music, for £4.99 a month in the UK. Naturally, the service is available on some of Pure’s own radios, but also on web and on smartphones, where music subscription services are getting the majority of their paid custom.

Pure has the device capability to make an impact in music on radio, but customers may already be more excited about unlimited music on new-wave “radio” devices like Sonos and through AirPlay than conventional “radio”, even internet radio, per se.

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Jon Miller, News Corp.: It's All About Video For Us Right Now

2012-01-24T11:33:14Z

Jon Miller, the chief digital officer for News Corporation (NSDQ: NWS), described his company’s digital strategy today as very “focused on video”, with a view that even properties that come from a print tradition should be producing more video content than they are today.

“I actually think we’re entering the age of video now…some people think we’re already there but I think we’re just getting started,” he told an audience at the DLD digital media conference in Munich, Germany.

He predicted that digital video consumption will “rise for the next many years” as bandwidth to the home continues to grow, and new devices make it easier to consume more content than ever before.

News Corp. like many other TV producers, has long been preparing itself for a time when that TV content is watched on anything but a TV, with the launch of online video and apps for new screens like those of tablets and smartphones. “TV is no longer a device,” he said. “It is a concept, and people go where the best screen is.”

And rather than simply ramping up the amount of content that News Corp.‘s video properties produce—they include broadcasters like Fox as well as the film studio 20th Century Fox—Miller says that it is turning to News Corp. businesses that are traditionally more tied with written content, in what sounds like a very decentralized, try-everything-and-see-what-works approach to the space.

“We’re producing everything across the board now,” said Miller. “[Because] we’re focused on video…we’re trying to move our print publications into video, too.” That includes training Wall Street Journal reporters to “take videos on their iPhones,” as well as write.

And gaming site IGN, which originally started life as a collection of titles reviewing games, is running a dedicated channel on Microsoft’s Xbox, as well as the YouTube (NSDQ: GOOG) channel dedicated to gaming. “We won the bakeoff for the YouTube channel last year,” said Miller, referring to YouTube’s strategy to launch 100 new premium content channels covering a variety of interests.

He also noted that through IGN News Corp is once again looking at how it might develop its own gaming content—this is something that it had tried to do through its old subsidiary Fox Mobile, although that content division, including the production studios, was sold off last year to Jesta Digital. The company seems to be taking a more cautious approach than in the past: “We are putting our toe into the water with casual games,” said Miller. “Playing games is a bedrock so we want to learn and earn our way into that.”

Miller was interviewed on stage by DLD’s chairman, Yossi Vardi, who noted that he once worked with Miller for four years, and also that DLD had been trying to get Miller to speak at the event for the past three years.

These two hooks might be part of the reason why Miller was thrown quite a few softballs in the interview. In other words, no questions about how News Corp. can avoid another MySpace or Fox Mobile investment (both written off and sold off) in its search for the next big revenue stream.

Nor were there any questions at all about the best business models for delivering that new material: News Corp has been strong on paywalls for its written content so far—with paid subscriptions required for much of the Wall Street Journal and The Times in London—would Miller and News Corp consider extending that to more of its video content?

One area where Vardi did press Miller a bit was on the Megaupload closure and how content companies are going after the “little guy” in their pursuit of copyright protection. Aren’t you ashamed your industry is chasing small kids who want to have some fun, asked Vardi.

“I think you’re confusing us with the music industry. We don’t do that,” answered Miller. “What you’re getting at is what is the proper way to protect copyright….There has to be a way for freedoms to be respected and for copyright to be respected.”

That is an issue that has yet to find a definitive solution from many of Miller’s peers, and perhaps Miller himself. “The industry takes a while to embrace new technologies,” he said. “We’re doing it as an industry but it’s a different world.”

That world, in Miller’s view, has discounted content to almost nothing, in order to shift value to other parts of the ecosystem—a complaint often heard from those in the content industry in the face of juggernaut’s like Apple (NSDQ: AAPL) and Google, which respectively are more interested in pushing hardware sales and advertising for their own business models, offering easy and cheap access to content as part of the deal for consumers.

“Distributors have different businesses now,” he explained. “It’s not just to make money on the content as before.” “[Those who make hardware, or sell advertising] would like to keep the value of content low.” He said that this will eventually need to get “rebalanced” in the future. Whether that means more moves to paid content, or more advertising initiatives—or even partnerships on devices—remains to be seen.

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WSJ Poaches Narisetti From Washington Post

2012-01-20T17:37:26Z

The reverb from Kevin Delaney’s departure from the Wall Street Journal for Atlantic Media Group just hit DC: WSJ alum Raju Narisetti is headed back to the Journal, swapping his role as managing editor of the Washington Post responsible for digital for managing editor of The Wall Street Journal (NSDQ: NWS) Digital Network. Narisetti, the founder editor of India’s Mint newspaper, also will be a deputy managing editor of the Journal. Release below.

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NEW YORK, Jan. 20, 2012 (GLOBE NEWSWIRE)—The Wall Street Journal has named Raju Narisetti as Managing Editor of The Wall Street Journal Digital Network, which includes WSJ.com, SmartMoney.com, MarketWatch and the Chinese, Japanese and German-language editions of WSJ.com. Mr. Narisetti will also become a Deputy Managing Editor of the Journal, and he will report to Alan Murray, Deputy Managing Editor and Executive Editor, Online.

Mr. Narisetti currently serves as Managing Editor for The Washington Post (NYSE: WPO), where he oversees the company’s digital content products, staff and strategy. Today’s appointment marks a return to the Journal for Mr. Narisetti, who first joined the paper in 1994 as a reporter in Pittsburgh and most recently served as Editor of The Wall Street Journal Europe in 2006.

“Raju has done remarkable work as the digital czar at the Washington Post, integrating print and online businesses, building a successful web site, and developing key relationships with the digerati,” said Robert Thomson, Editor-in-Chief of Dow Jones and Managing Editor of the Journal. “His experience in creating Mint, a national web site and newspaper in India, also brings important relationships and unique expertise that will assist us as we expand our global digital network. Raju is wired, and we are jazzed.”

“Raju knows the world, knows digital journalism, and knows the Journal,” said Mr. Murray. “He is the perfect person to lead us into a new era of global growth.”

Mr. Narisetti’s appointment follows the recent departure of WSJ.com Managing Editor Kevin Delaney.

Strong Digital Growth from New Content, Product Offerings and Global Expansion

The Wall Street Journal Digital Network has seen tremendous growth in recent years with the introduction of expanded news coverage, content and new products as well as increased usage across its Web sites, mobile applications and tablet editions. The network has more than 1.3 million paid digital subscribers across multiple platforms and devices, and averages more than 50 million visitors per month online.

WSJ.com’s success has been buoyed by an expansion in politics, national and world news, sports and lifestyle coverage, as well as live and on-demand video, real-time blogs and the launch of premium verticals. WSJ.com generated a 42% year-over-year increase in traffic in 2011, averaging more than 36 million visitors per month worldwide. The new WSJ Live interactive video application is already available to millions of users via the iPad and multiple Internet-connected televisions and set-top boxes.

Globally, more than 30% of the total digital audience comes from outside the North American market, including Asia, which generates more than 11 million visitors per month, and nearly six million from Europe, Middle East and Africa. In 2011, traffic to the Journal’s Chinese- and Japanese-language Web sites increased 38% and 150%, respectively.

To further serve its expanding global audience, the Journal and Dow Jones have launched a series of regionally focused digital initiatives – the most recent of which, a German-language news site (WSJ.de), launched earlier this month. Other regional offerings are available, including China, Japan, Korea, India, Southeast Asia, and Central and Eastern Europe.

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Interview: News Int. Hacking Scandal Has Spurred Innovation

2012-01-20T08:18:08Z

News International’s recently-appointed digital product director is trying to make the publisher more agile and innovative in digital media - and the phone hacking scandal in which the company is embroiled may even have helped the effort.

“For us, this is a huge catalyst for change actually,” Nick Bell, who joined his first corporate gig in October after a career as a young digital entrepreneur and investor, told paidContent.

“Tom Mockridge joined as CEO. When any new CEO joins an organisation, there’s going to be change. From a digital perspective, we like to think we saw it as an opportunity to drive forward some of the change.

“It’s probably had the opposite effect of slowing us down - it’s probably focused us more on how we innovate. It’s focused our minds on how we make sure the customers who are paying for our products are getting value for money, making sure we look after our customers. The focus on our customers has increased.”

Now 28, Bell was a teenage dot.com star. In 1999, he founded an early content site, Teenfront.com and attracted around 500,000 unique monthly users before selling it to Rools for reportedly close to £1 million, aged 16.

He later formed a business establishing sunbed and tanning studios inside Tesco stores, founded and later sold his stake in a business providing video screens to the luxury yacht market and started Quick.tv, an online video company that raised seed funding and which is now working on web video ad tech. Bell remains interested in startup investing.

Bell, along with leavers from Apple (NSDQ: AAPL) and Google (NSDQ: GOOG), was hired by News International chief information officer Paul Cheesbrough to inject some of this spirit in to the publisher. Now he says using data to understand customers and constant product iteration are his guiding principles.

“When I joined the organisation, it was traditional IT-oriented,” Bell told me. “It would be a slow process, three to six months, to do a piece of work. Then that team would get disbanded to go and do something else. We’ve moved toward a product stream where we have key products and a team that constantly iterates. It’s about listening to the customer.”

One example, whose original debut pre-dates Bell, is The Times’ iPad edition, which launched fast, alongside the tablet, in the UK and which took a small dose of customer criticism for bugs, which were ironed out in routine updates. By contrast, The Guardian recently launched its first iPad edition around a year and a half after the gadget went on sale.

“We recently introduced an R&D lab,” Bell says. “In a slightly Google-esque manner, every member of our technology team now will spend one twelfth of their time cycling through the innovation lab. It creates a space where they think about problems differently.

“Some of the products coming out of there are very interesting. We’ve been through our first couple of cycles there. We’ve learned something from every product created in the lab - some of those will start to be baked back in to our core apps.”

This kind of “hacking” (of code) is a refreshing alternative to the one which has engulfed News International over the last year.

“Of my team of peers, five or six of us invest in businesses as well,” he says. But News International, which previously invested in digital property classifieds startups, has now sold on those assets, and Bell appears keener that the publisher partner with startups than take equity in them.

Bell cites “working with smaller, agile more companies” like Livefyre, a story comments platform operator which News International took an early bet on enlisting. “Being prepared to work with small startups of best-of-breed is key.”

News Corp Settles Hack Claims On Basis Execs Lied And Destroyed Evidence

2012-01-19T17:26:32Z

News Corp could be laden with a multi-million pound UK compensation bill after agreeing to settle claims on the basis its executives tried to cover up and destroy evidence about tabloid phone hacking.

In London’s High Court on Thursday, News International settled with 19 high-profile victims, whose lawyers issued a statement reading…

“News Group has agreed to compensation being assessed on the basis that senior employees and directors of NGN knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence.”

The wording “on the basis” is key. It means News International is not admitting to such actions themselves at this stage. The company will likely want to avoid prejudicing itself in the event of any such criminal charges being brought.

But calculating its compensation payouts on this basis could nevertheless be a milestone. The publisher had originally blamed phone hacking on a single “rogue reporter” and some executives had originally denied knowledge. Through its own investigation and others, the company has since learned to the contrary. News International declined to comment when approached on Thursday.

From a financial perspective, today’s 16 disclosed settlements total £645,000 - an average £40,312 payout per victim. London’s Metropolitan Police believe 803 people may have been hacking victims. The total compensation bill calculated on this basis could reach £32.37 million.

But this estimate is inexact and theoretical. It is not clear that every victim, many of whom are likely still unaware of their victimhood, will settle with the company in this way. It would also be difficult to forecast figures for such prospective settlements. Today’s settlements vary between £25,000 (to a hacked journalist) and £130,000 (to actor Jude Law), for example.

From a corporate perspective, today’s statement reflects damagingly on the unnamed “senior employees and directors” referred to.

James Murdoch was a director on the board of News International’s News Of The World and Sun publishing imprint, News Group Newspapers, at the time, but resigned in the wake of the scandal, according to a September filing. He remains News International’s chair. News Group’s current and former directors are listed here.

News International’s former legal manager and News Of The World’s former editor previously told a parliamentary committee they had made James Murdoch aware of the scale of the problem. But Murdoch repeatedly told the committee they had kept it from him.

Then, last month, in an embarrassing further submission, he told the committee he had recalled that he had indeed been made aware, via a weekend email that he did not fully act upon when he returned to the office later that week.

James Murdoch is chairman and CEO of News Corporation’s “international” (non-U.S.) business.

Interview: 'No Decision' On Sun Paywall In Absence Of NOTW

2012-01-19T08:45:01Z

News Of The World’s closure deprived News International of data on which it could have based a decision to introduce digital fees at the UK’s most popular newspaper.

News Of The World relaunched on the web and iPad for £1.99 a month in September 2010, including with SMS payment - ten months before it was shut amid the phone hacking scandal.

“One of my personal frustrations is we were about to roll out some tests and changes, to switch some of the levers to see how we could actually engage that audience,” News International’s digital product director Nick Bell told me in a Q&A at Wednesday’s Digital Content Monetisation Europe conference.

“We started allowing First Click Free. We were trialling all of those elements. The News Of The World was a great place to do that. It was a brand that was innovative. We learned a huge amount. it’s a shame for us that we didn’t have a chance to see some of the results of tests that were carried out.

“What it proved was that people, even in the red-top space, are willing to pay.” Bell did not quantify NOTW’s digital take-up at the time.

In the meantime, the Sun Online website has notably not joined its deceased stablemate nor its higher-brow Times brethren in implementing news fees dictated by Rupert Murdoch late in 2009. Everything appears to be in a holding pattern. But NOTW may nevertheless prove useful.

“No direct decision has been made around a paywall for The Sun,” Bell told me. “There’s a lot of learnings we can take from the News Of The World. One thing we did learn was that it’s very difficult to have a one-day proposition - you’re constantly trying to recruit that audience on a Sunday. If you look at The Times and Sunday Times, although they’re separate brands, you get access to both.”

News International has introduced tablet and mobile subscriptions of £4.99 per month for The Sun’s apps, but the mature Sun Online website has not got the same kind of refresh that NOTW’s underlying web platform did.

“The Sun is going to be an area of investment for us over the coming months and years,” Bell told me. “We’re really keen to listen to our customers and have a human-centric approach to the designs that go out there.

“News International traditionally took a very one-man view to these things, somebody would come up witha design and that’s what would get rolled out if the editor approved. We now are going through a far more user-centred design approach. That will hopefully mean some of the stuff we come out with will be far more interesting, exiting and relevant.

“Sun Bingo is hugely successful, Dream Team has over a million players - these are brand extensions which do very well for The Sun and people are willing to pay for those in their millions.

The Times Plans Social Sharing Upgrade, Real-Time iPad News

2012-01-18T12:54:25Z

News International’s The Times may shed its social media invisibility cloak by letting subscribers gift paywalled articles to friends.

It is also considering introducing micropayments and may add rolling news to mobile editions.

“Sharing, within the Wapping headquarters, has been a hotly-debated topic,” News International digital product director Nick Bell told me during a one-on-one Q&A session at the Digital Content Monetisation Europe conference in London on Wednesday.

“Over the next six months, you will see us rewarding our paying subscribers with the ability to share amongst their network. That’s going to be an interesting piece for us. If they want to share content with their direct friends, then we’re going to enable that.”

But exact details, like whether recipients of subscribers shared articles will get to read for free, are at an early, exploratory stage.

“We’ve watched with interest the launch of other newspapers’ apps on to Facebook,” Bell said. “We have yet to see where the true value lies there. If you speak to the likes of The Guardian and The Independent, they probably agree on that.

“It’s a huge platform and a great way to get a lot of eyeballs on your content, to increase your brand presence in that space - but, actually, trying to derive direct monetary value from those users is still a challenge. We’re monitoring that space with interest and we’re keen to give more value to our paying customers.”

The Times pioneered paid content’s big second wave when it implemented platform-wide digital fees in summer 2010 and reported 115,000 customers in September. Its online audience and exposure in social media has naturally declined, but the company remains bullish, with a liberal ethos to charging formats going forward.

A social metre?

Bell said the payment method is not set “hard and fast” but told me the publisher won’t let some articles go free under the metre model operated by titles like The Financial Times and New York Times.

“We’ve taken that question back to our customers on a very regular basis - they keep telling us that they don’t want that system,” he said. “They want to have a level playing field - if they are paying for content, then other people are also paying for content.

“Where we do want to add value and we see an opportunity is allowing people to share content with their friends. How we do that is yet to be finalised, but we do think there is value if they can share content with their friends and family.”

Micropayment suspicion

“We’re at the start of a journey,” Bell added. “Microtransactions is an area that, over time, we will explore in detail. In terms of article-by-article micropayments, it’s about creating a journey which makes that easy and simple, straightforward and transparent for the user. That’s where my concerns would lay around micropayments - does the hassle of doing so warrant it for a one-article piece? It’s about getting that customer experience right.”

Rolling iPad, too

The Sunday Times and News Of The World, before it was closed, had begun letting users download individual Sunday editions for an individual price. On major stories, like Steve Jobs’ death, The Times’ well-regarded iPad edition, though it sticks closely to a linear, newspaper-like daily format, also updates with breaking packages. Now breaking news may be increased…

“We’re looking at features to allow people to have a mix of both,” Bell added. “The real-time piece is something we’ll be exploring over the coming months. We need to come up with a way of surfacing that to the user so you can surface those experiences.”

Pleasing payers

Bell admits: “I was very surprised, going in to the business, at the success of the (paid) product. It shows people are willing to pay for content. When we release our next set of numbers in September, we’ll do so with a smile. We’ve now got confidence in the business model. The challenge is making sure we evolve those products, offer value for money and give people content where they want it.

“The audience is still substantial. Over a quarter of a million people still have access to our digital products for The Times. The key thing for us is engagement.

“Over 60 percent of people read the iPad edition six times a week; that’s huge engagement. People are spending three times longer on the website than they were previously.

“The average salary of the (Times’) iPad reader is £109,000, over 15 percent of the audience reading the iPad on a daily basis earn in excess of £200,000 a year. It’s a very attractive audience for advertisers. The volume has decreased but the value of the audience has gone up.”

The Sun Newspaper Going Premium In Mobile App For £4.99 A Month

2012-01-13T13:09:01Z

The UK’s highest-circulating newspaper may not yet be going ahead with web fees but it has introduced a subscription smartphone app, priced £4.99 ($7.65) a month.

News International’s mass-market The Sun launched on Google’s mass-market Android operating system this week at an introductory £0.69 ($1.06) for the first month. An iPhone version is due in February.

paidContent reported in October the publisher would make this move, even though plans for the Sun Online website to charge fees, following its stablemates The Times and Sunday Times, appear to have been shelved.

£4.99 ($7.65) is the same pricepoint at which News International sells monthly subscriptions to The Sun’s iPad edition.

The mobile app is updated through the day and includes Mystic Meg’s horoscopes, live football scores, a Sun Scan QR code reader, location-based weather and photo galleries.

It’s not clear how News International will accomplish in-app subscription with Android. Google (NSDQ: GOOG) is beta-testing in-app subscriptions and disallows developers from processing in-app subscriptions independently.

Launch was hit by teething errors, at least at my end. Despite having paid for the app, it will not download to my handset from Android Market. News International later automatically cancelled the order. Update: The issue resolved itself quite quickly.

Hollywood Lambasts Sky Movies Ruling, But Open Access Gains Favour

2012-01-12T11:11:56Z

Six Hollywood studios have urged the UK’s competition watchdog to throw out its assertion their Sky Movies deals are anti-competitive. But some of them are warming to its suggestion BSkyB (NYSE: BSY) should offer rival services like Netflix (NSDQ: NFLX) over its own set top boxes.

The Competition Commission, which has been investigating the UK market for movies on pay-TV, in August provisionally ruled as anti-competitive Sky Movies’ exclusive deals to show the studios’ films in the first pay-TV window (for movies on a subscription basis, including VOD).

The commission proposed a number of remedies, including forcing BSkyB to open its satellite set top box platform to host competing services.

In responses published by the commission today, Disney (NYSE: DIS), 20th Century Fox (NSDQ: NWS), Paramount (NYSE: VIA), Sony (NYSE: SNE) Pictures Television, NBC (NSDQ: CMCSA) Universal and Warner unleash scathing criticism of the commission for failing to properly assess levels of competition in the market, as they see it. Notably, they say the commission has not accounted for the arrival of competing over-the-top services, as has been seen by this week’s Netflix launch.

However, two studios - Paramount and NBC Universal - favour the open-access remedy above others. This “has the best chance of being effective in resolving the competition problem”, according to Paramount. According to NBC Universal: “While this remedy might provide some short-term advantage to OTT providers, it would seem likely to become obsolete through technical and market developments such as those identified by the Commission (internet-enabled TVs and STBs).”

The studios are trying to protect their ability to retain exclusive deals with Sky Movies. Those deals would not be affected by Sky opening its box. That also means the proposal may not succeed in granting better studio deals to Sky’s rivals.

But, though it has started to offer its own on-demand programming to its set top box, BSkyB, at least for now, would rather walk over hot coals than open the box, which is the UK’s dominant pay-TV platform with over 10 million subscribers, as an over-the-top internet TV system.

In its submission, Sky argues “the effect is likely to be marginal” and “it is plain that (this) is not justified on the basis of the evidence and analysis put forward by the competition commission” because “Sky‟s Ethernet-enabled set top boxes do not meet the conditions required to be considered to comprise an essential facility to which access should be mandated”.

Sky recently began exploiting its movies rights as VOD through its Anytime+ service on TVs. Previously, it offered on-demand movies via Sky Player (now Sky Go) and via the Sky Anytime portfion of its set top box DVR.

Netflix CEO Reed Hastings this week told paidContent he could bid against Sky Movies for top-tier rights and he doesn’t need to depend on the Competition Commission to do it.

Studios’ Responses: Highlights:

Disney

“A number of conclusions that are simply incorrect.” “Impracticable”, “disproportionate”, “misguided”.

“The provisional findings are predicated on the CC’s view that technological developments will have little or no impact on competition in the pay-TV sector.”

20th Century Fox:

“The CC’s proposed remedies risk ossifying patterns of distribution in the UK at a time when the speed of technological change will produce market-driven
developments.”

“The CC has failed to recognise the significance of one of the most important new forms of content distribution that is likely to affect the UK market: internet distribution.”

“It is striking that when one of the major international players in this area, Netflix, was asked about its intention in the UK it replied that “it had no comment to make” and the CC did not pursue this further.”

Paramount:

“None of the proposed remedies will be effective.”

“The CC must now recognise that the provisional findings as they stand do not provide a robust basis for analysing possible remedies.”

Sony Pictures Television:

“The CC should abandon its provisional view… The CC has not demonstrated ... and has failed to take into account quantifiable and foreseeable market developments that
will stimulate competition.”

“The clear implication of investment (from rivals like Lovefilm, Netflix) is that they believe they can compete successfully (without the need for regulatory intervention).

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Chinese Video Site Youku Makes Movie Deal With Twentieth Century Fox

2012-01-11T13:45:43Z

Chinese online video giant Youku (NYSE:YOKU) today announced that it has inked a deal with none other than Twentieth Century Fox (NSDQ: NWS) Home Entertainment to license 250 films.

The movies will be shown on Youku’s Premium on-demand platform which launched last year. The company’s vice president of movie operations and corporate development, Huilong Zhu, explained:

We have been working closely with Hollywood studios in providing quality content to millions of Chinese Internet users while effectively protecting intellectual properties… We are encouraged by the growth of the Youku Premium platform, and our new licensing agreement with Fox will make Youku Premium more compelling for our users.

Many of Youku’s premium offerings are integrated into its movie page [1], with a small ‘paid’ badge on the top corner of the title if it isn’t free. Wisely though, Youku allows users to watch the first five minutes of a paid movie for free. The company says that its pay-per-view transactions “more than tripled between Q2 and Q3 of 2011,” with Youku Premium users paying more than once a month for content.

Chinese video sites like Youku started out with huge amounts of unlicensed content, and much of their popularity springs from this. But now that many of them have gone public (or intend to go public), video sites have cleaned up their act, bringing in more original and licensed content. Youku specifically has been pushing its Youku Originals, such as The Ultimate Winner, which we told you about earlier this year.

Recently, however, Youku and its rival Tudou (NASDAQ:TUDO) have been making headlines with each accusing the other. We’ll keep you posted on that situation if we hear anything. Update: Youku says they filed a lawsuit and it was accepted by the court.

» This article originally appeared on Penn Olson, Asia Tech News For The World, and is reproduced here with permission.

Interview Part 1: Netflix's Hastings Aims To Challenge BSkyB

2012-01-09T18:14:36Z

Netflix (NSDQ: NFLX) fancies bidding against News Corp-controlled BSkyB (NYSE: BSY) for Hollywood movies and TV shows, even though international roll-out losses are set to exceed $70 million this quarter alone, CEO Reed Hastings tells paidContent.

Challenging BSkyB

“Sky Movies and Sky Atlantic are the big competitors,” Hastings told me, playing down the threat from Amazon’s incumbent UK movie and TV service Lovefilm.

UK anti-trust authorities may be about to grant Sky’s rivals an opportunity by breaking up its exclusive first-run pay TV rights with six Hollywood studios. “It could make it easier for us to bid,” Hastings said. “But we could also just bid against them. We are not dependent on whatever the Competition Commission does.”

Out-bidding Sky could be cash-intensive. “Yes, but that’s why the studios like us,” Hastings added, hinting that Netflix can dig deep for licenses.

UK opportunity

Hastings explained the UK opportunity: “Over-the-top is established. When we launched Canada a year and a half ago, people were like ‘Stream-what?’ But, here, because of iPlayer being so successful, the whole notion of click-and-watch internet video is very popular already.”

Still, Netflix won’t employ any local staff for its overseas countries. “We’re doing this all out of California,” Hastings told me. “It’s just like Skype can serve the world from Luxembourg - it’s amazing what you can do on the internet now.” Even so, the service is spending “tens of millions” on today’s UK and Ireland launch, much of it on marketing the unfamiliar brand and on content licenses.

International losses

Now in 45 countries after Canada and Latin America, global expansion is set to push Netflix in to the black throughout 2012, and Hastings is not committing to a return to profit in 2013, nor a first UK profit by year three. “We’ll see how it goes,” he said. “We’re not really focused on the short-term profits, we’re focused on the long-term market opportunity.”

Q4 non-U.S. losses were projected to reach $60 to $70 million. “That’ll grow”, Hastings said, explaining why Netflix raised $400 million in private finance recently: “You never want your suppliers to be nervous about payment. So it’s better to raise a bunch of money. It didn’t cost us that much. Then the suppliers are not nervous at all. We don’t expect to ever need it. But that’s when you want to raise it.”

Content line-up

For its UK and Ireland launch, Netflix has movies rights in the first-run subscription window from Lionsgate (NYSE: LGF), MGM and Momentum; further deals with Miramax, Paramount (NYSE: VIA), Sony (NYSE: SNE) Pictures Entertainment and Twentieth Century Fox; (NSDQ: NWS) plus archive TV from BBC Worldwide, ITV (LSE: ITV), Channel 4, All3Media, CBS (NYSE: CBS) and Viacom.

“Sky Movies and Sky Atlantic have been so strong, it’s been very difficult to compete with them,” Hastings conceded. “But now, with over-the-top, it creates an opportunity for someone to come in. It’s not that we’re going to beat them - but at least we can provide them some good competition.”

Netflix vs Lovefilm

“Love,” as Hastings calls Amazon’s Lovefilm, “has two million DVD-by-post subscribers and they just launched streaming-only this week, so essentially we’re starting in the same place, we’re talking about no streaming subscribers, it’s a great opportunity for us both to grow.” In fact, Lovefilm today claimed “hundreds of thousands” of customers for its online-only new Lovefilm Instant tier, despite not making it public until today.

“We overlap on some content. On the BBC series Top Gear, they license three series, and we license 13. We have a bunch of American TV like Breaking Bad; they have hardly any. We both have a set of movies and they’re all exclusive. So it may be that people subscribe to both - their £4.99 and our £5.99 service - and use them both together.”

Just as Hulu controls networks’ new catch-up TV in the U.S., UK broadcasters prefer to offer latest on-demand via their own-brand services. Though the remaining content is archive fare, Hastings touts “complete-season” access for many shows as a selling point. But Netflix will not yet consider funding original UK programming as it now does in the States, he says.

“Sky has all the big studios so you might say it’s impossible to launch a service. But, with the Moneyball strategy, we’re able to get lots of other content - it’s so much now in pieces that we can have a winning service.”

The future of TV

The long-term opportunity Hastings is shooting for, beyond all the short-term losses, is era-defining.

“There’s a complete change coming from broadcast video, which has been dominant for 60 years, to become on-demand, click-and-watch, over-the-top,” he said. “The smart TV revloution is just beginning.”

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