Newspapers and traditional media are bleeding profits and jobs. It’s one of the hardest hit sectors, so it’s not as if they couldn’t see this coming. But News Corp’s CEO Rupert Murdoch says it’s even worse than he thought. The company just announced they are writing off $8.4 billion of losses.
News Corp. is the largest media conglomerate in the world. They own MySpace, Hulu, Fox News, the Wall Street Journal, Photobucket, HarperCollins, and on and on. The company doesn’t break up revenues and losses by companies but did say MySpace ad revenues haven’t grown – profits are flat. In this climate you can take that as good news.
Being the optimist that I am I have to mention some more more good news. The LA Times recently reported that their online ad revenue is now paying for their entire editorial payroll for both print and online versions.
The prescription is a familiar refrain right now. Murdock says: “We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate. We believe our businesses are well positioned to withstand a lengthy downturn and to emerge stronger as the current economic situation improves.”
They are also planning on a 30 percent decline for this year. Revenue was $7.9 billion after the write off. As far as barometer’s go, this doesn’t fair well.
Murdock also noted that besides search ads, there’s a glut of inventory of online ads which means payouts for them keep dropping. He did mention that they’re making 80-90% ad revenues on MySpace but need to find other ways to monetize the traffic coming to the site.
Don’t we all.