Last fall Rupert Murdoch spooked investors by announcing that “next year could be rough”. Today his lieutenant Peter Chernin stopped by the Citi Entertainment, Media Conference to explain that everything looks great, and that even if there is a slowdown in the U.S. economy, News Corp. can weather it.
Facebook v. MySpace: Facebook got a six month lead by opening up platform, but now we can catch up via Open social. “I think you’re going to see the lion’s share, at least initially, devoted to Open Social.” First MySpace Open Social apps to hit w/in a month.
MySpace/FIM Monetization: More on “affinity-targeting/hyper-targeting,” but nothing new here: Seeing 30 to 50% ECPM uplift. If we can grow CPM on page views – we have 10% of the net or something close to that – can be a huge difference maker.
Macro trends/Recession? Obviously we live in the world, and obviously Rupert lives in the world. Certainly we don’t want to be Pollyanish. That being said, our business is very very strong in all sectors. Even if were to see a slowdown, US business reps 22% of our revenue, so a 10% revenue downturn, which would be shocking, would be a 2% downturn across our business. “But let me be very clear – we are seeing no signs of a slowdown anywhere in our business.”
Broadcast makegoods/scatter market: We have near-historic lows in make-goods. We’ve won broadcast season last three years and expect to win it by a large margin this year. Scatter is strong, not because demand down, but because we have high ratings card to play. But overall, industrywide, strength of scatter is due in part to reduced inventory (lower ratings).
Please defend the Dow Jones acquisition: In short term, we’ll get some costs out at the newspaper and run it more efficiently. Longer term, it’s the ability to express and expand that brand in digital. And the “moneyed classes” around the world — 25 year olds in China, India, Indonesia — are growing and we want to connect them with our global brand.
WSJ Free or Not? We’re obviously looking at it.
What are you thinking with your German pay-TV investment? Potentials for big opportunities, and we thought it was worth taking a shot at it. But it’s almost a starter investment, so we can assess industry there.
Suggestion: Why not just shutter production for six months, since you’re not going to be able to get shows, etc ready for fall season anyway? We’re in the business of making product and we should do so when we can. But we can’t make a deal that’s financially indefensible. I couldn’t responsibly participate in a short-term deal to solve the strike that could hurt us long term. We and the other networks are in a good position to survive the strike, though of course we’d like to resolve it.
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