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January 20, 2018

Nine Questions on the News Corp Split: The Rise of Twenty-First Century Fox and The Daily's Demise

Related weekend post — The Newsonomics of Rupert Murdoch’s Long Game — up at the Nieman Journalism Lab

It turned out that the news of Robert Thomson’s appointment as head of the News Corp’s new standalone publishing company was just the first domino. Many more fell overnight as News Corp made an aggressive set of announcements on its split and who will run which parts of the two companies.

What we know:

  • The News Corp name goes to ….. to the publishing company, which is, of course, the news company. I hope they didn’t spend too much white board time on that one. The worldwide entertainment assets becomes Fox Group, the roaring lion re-appearing in full form for this century. Twenty-First Century Fox might have been more fun.
  • Mike Darcey, the #2 at News Corp’s BSkyB moves over to head News International, the holding company for the company’s UK newspapers. Murdoch moved quickly, acting on the surprise resignation of News International’s Tom Mockridge, who quit on the spot upon learning he’d been passed over for the job that went to Thomson.
  • The Daily won’t see 2013, to be shuttered, after a spiral of staff layoff and downturn, on Dec. 15.
  • More appointments and shuffles flew in the announcement.

So let’s take what we’ve learned on Monday morning and see the logic — and the questions they raise. Here are nine of them:

  1. Why did The Daily fail? I think the short answer is that it missed the first law of media: Make it interesting. The Daily was attractive, even sometimes stunning, in its visual appeal, but too empty-headed to attract a daily readership. If you are going to call something The Daily, you better figure out how to make it a must-read, and that means differentiated content, a reason for you and me to stop reading something else and start reading The Daily. I called it (“The Newsonomics of Mr. Murdoch’s The Daily“) an attempt to create a USA Today for the tablet century, and it failed as that publication attempts its own renewal. Chalk it up as an expensive R & D lesson for News Corp, though its Wall Street Journal tablet learnings are far more to the point of its future. One other note: On business model, The Daily’s Demise reminds us that if far easier to launch a large digital/All-Access circulation business if you start with a print publication — and an installed base of paying customers — than from scratch. We can extrapolate a lot from that learning, but that’s for 2013.
  2. When will the Times of London and Sunday Times soften its hard paywall? It’s one of the few that haven’t seen the light of metered, open-to-the-public news websites, and adjusted accordingly. The UK quality press market is a tough one — and the Times has gotten valuable data on its paying customers — but expect new News Corp CEO Robert Thomson, working with new News International CEO Darcey, to make repairing the Times wall a first priority.
  3. Is Darcey a smart choice for News International? It’s an unenviable job, given the ravages of Hackgate, and the fact that two former execs will now be tried for bribery. Look at the News International challenge three ways: 1) Get that digital circulation strategy re-formed to supply a good and growing stream of circulation revenue; 2) Move the Times into the growth end of digital advertising, including share of voice/sponsorship (“The Newsonomics of Native, Indigenous and Immigrant Content“); 3) Move the Times onto all relevant digital platforms, as consumers quickly migrate. Darcey checks off the second and third boxes, given his experience, and he is a smart enough executive, working with the Journal’s top people to figure out the first.
  4. Where does the WSJ Network fit in here? Nicely. If you own one of the world’s leading business news companies, why not use all the company’s distribution pipes to maximize the value of that content. In the last year, the Australian papers have begun using more WSJ content in print and online. Expect that trend to magnify, with WSJ as the brand name taken to market on most continents — and on TV as well.
  5. What will become of the New York Post? We don’t know. Jesse Angelo moves over to publisher there, after serving as editor of The Daily. While News Corp jettisoned The Daily, it could have made a further announcement about the Post’s future, but didn’t. New News Corp CEO Robert Thomson will see what kinds of cost efficiencies he can bring to New York-based parts of the new company. Further, the New York outpost still provides Murdochian political clout….especially if News Corp makes a move to bid on other metro papers.
  6. So is it more or less likely that News Corp will bid on the L.A. Times and Chicago Tribune, as Tribune Company exits bankruptcy? We’d have to say the odds are higher today than they were on Friday. Plainly, Murdoch has moved quickly to put the new News Corp into place — seemingly well ahead of the mid-2013 target he’d set when he made the split announcement in summer. There are lots of reasons to get on with it, and one could well be the upcoming Tribune auction, a topic I covered in depth this weekend (The Newsonomics of Rupert Murdoch’s Long Game“)
  7. When will the formal split into News Corp and Fox Group happen? We don’t know from today’s announcement, but expect it sooner than later.
  8. Who won the news day? Point Murdoch.The slew of announcements show energy, and a path forward. Over at arch-rival, the New York Times, the news (Romenesko: “New York Times Aims to Trim Staff by 30 Through Buyouts“) is layoff or buyout.
  9. Isn’t James Murdoch’s new role significant? It’s hardly a surprise, as James was appointed to Carey’s deputy in March. COO Carey remains in place, as expected, the #2 to Murdoch who remains CEO of Fox Group, and Chairman of News Corp. This move is intended, overall, to cement the American royal succession. It looks like James will escape legal exposure in Hackgate, if narrowly. In the court of News Corp, we now are all set for Murdoch: The Next Generation, An American Story (“The Newsonomics of Rupert Murdoch, American Publisher“).

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