netrashetty
Netra Shetty
News Corporation (NASDAQ: NWS, NASDAQ: NWSA, ASX: NWS, ASX: NWSLV), often abbreviated to News Corp., is the world's third-largest media conglomerate (behind The Walt Disney Company and Time Warner) as of 2008, and the world's third largest in entertainment as of 2009.[5][6][7][8] The company's Chairman & Chief Executive Officer is Rupert Murdoch.
News Corporation is a publicly traded company listed on the NASDAQ, with secondary listings on the Australian Securities Exchange. Formerly incorporated in South Australia, the company was re-incorporated under Delaware General Corporation Law after a majority of shareholders approved the move on November 12, 2004. At present, News Corporation is headquartered at 1211 Avenue of the Americas (Sixth Ave.), in New York City, in the newer 1960s-1970s corridor of the Rockefeller Center complex.
News Corporation (NYSE:NWS) is a diversified broadcast and print media company whose subsidiaries include the Fox Broadcasting Company, Twentieth Century Fox, MySpace, SKY Italia, Dow Jones & Company, The Wall Street Journal and Barron's. For the year ended June 30, 2009, the company generated $30.4 billion in revenue, down 8% from $33.0 billion in fiscal 2008.[1] Plagued by declining viewership and circulation, News Corp attributed this result to revenue decreases at its Television (-21%), Other (-20%), Book Publishing (-18%) and Filmed Entertainment (-11%) segments.[1][2][3]
News Corp received 38% of its 2009 revenues from advertising and, therefore, stands to lose significantly from a reduction in overall advertising spending, which is highly correlated with economic booms and recessions.[4] The company also received 45% of its 2009 revenues from outside the United States and this international exposure shielded the company from the full effects of the credit crunch and financial crisis.[5] Along with a host of smaller competitors, News Corp competes with a number of large media conglomerates like Time Warner, The Walt Disney Company, CBS and Viacom.
After the company acquired popular social network MySpace in 2005, MySpace lost its top ranking in social networking sites to Facebook. In March 2010, a rumor began circulating that MySpace's struggles have News Corp frantically trying to sell the site for approximately $700 million.[6]
Contents
1 Business and Financial Metrics
2 Operating Segments
3 Key Trends and Forces
3.1 Impact of an Economic Slowdown on Advertising Spending
3.2 Newspaper industry moving to mobile/digital content
3.3 Weakness in the Publishing Industry
3.4 Declining movie attendance and DVD purchases
4 Competition
4.1 Studio Market Share
5 References
In Q1 2011, News Corp posted a net income of $775 million, an increase of $204 million from the year before. Its revenue was $7.43 billion, a 3% increase from the $7.20 billion in the same quarter of the previous year, remaining consistent with analyst estimates of $7.42 billion. The increase in revenue was primarily driven by a 17% increase in the company's Cable Network Programming segment.[7]
Business and Financial Metrics
In 2009, News Corp made made $30.4 billion in revenues, down 8% from $33.0 billion in 2008.[1] Plagued by declining viewership and circulation, the company attributed this result to revenue decreases at its Television (-21%), Other (-20%), Book Publishing (-18%) and Filmed Entertainment (-11%) segments.[1][2][3] In the Television segment, revenues decreased due to the sale of 8 owned-and-operated FOX Network-affiliated television stations in July 2008 and lower advertising revenues. In the Other segment, revenues decreased due to the sale of a portion of the company's ownership stake in the NDS Group in February 2009. In the Book Publishing segment, revenues decreased due to the lower sales of general books and a weak retail market. In the Filmed Entertainment segment, revenues decreased due to reduced worldwide home entertainment and theatrical revenues. Rupert Murdoch, the company's chief executive, took a 40% pay cut in fiscal 2009 as the economic downturn sent News Corp's stock price plummeting. [8]
Operating Segments
News Corp has 8 operating segments: (i) Filmed Entertainment; (ii) Television; (iii) Cable Network Programming; (iv) Direct Broadcast Satellite Television; (v) Magazines and Inserts; (vi) Newspapers and Information Services; (vii) Book Publishing; and (viii) Other. Of all these segments, Filmed Entertainment (20%), Cable Network Programming (18%) and Television (15%) contributed the most its 2009 revenues. The company's smallest segments by revenue are Book Publishing and Magazines and Inserts. Until 2009, the New Corp's fastest growing segments by revenue were Newspapers and Information Services (39%, driven by the acquisition of Dow Jones & Company, owner of the Wall Street Journal), Cable Network Programming (28%, driven by higher affiliate and advertising revenues at FOX Broadcasting Company) and Direct Broadcast Satellite Television (22%, driven by subscriber growth at SKY Italia).
Key Trends and Forces
Impact of an Economic Slowdown on Advertising Spending
Spending on advertising is highly correlated with general economic growth, which makes such macro factors as oil prices and the U.S. housing market key concerns for News Corp. Advertising spend in 2007 grew less than 1% over the previous year due to weakness in the housing market and growing fears of a recession. With the effects of the subprime crisis continuing to spread, 2008 may be another weak year. [9] Advertising is a key component of News Corp's revenues in all segments, (cable and broadcast television, magazines and inserts, websites, etc.), making up 45% of fiscal 2007 revenues; continued weakness in advertising spending may have a strong negative effect on profitability.[10] Because of weakened advertising spending in 2008, NWS reported a loss of $6.42 billion mainly because of slumping ad sales in its television and print businesses. Furthermore, the company's quarterly revenue dropped by 16% because of slumping ad sales.[11]
Newspaper industry moving to mobile/digital content
The Wall Street Journal plans to make its mobile applications free to paid subscribers (of either the online or print WSJ) starting in October 2009. News Corp. previously planned on charging everyone to read WSJ articles on their phones, but had a change of heart, deciding only to charge those users who do not already have a paid subscription. With this decision, News Corp lowers the risk of upsetting and losing its existing customers, as well as expands to a new medium to attract further potential clientele, a move that benefits the company's overall business as it adapts to more modernized news mediums.[12]
Weakness in the Publishing Industry
The Print Publishing Industry publishing industry as a whole has been declining for the past few years. Circulation of magazines and newspapers is decreasing as consumers turn to alternative media sources such as the Internet, a cheaper and more convenient news source. Due to these decreases in circulation, advertising spending on newspapers and magazines has also shrunk, as have revenues from classifieds.[13] With the recent acquisition of Dow Jones (DJ), which publishes the Wall Street Journal, News Corp is increasing its exposure to the publishing industry. As a result of the deal, 26% of News Corp's revenues will come from publishing, partially tying the company's profitability to further industry developments.[14] In 2008, advertising revenues from NWS's Wall Street Journal decreased an estimated 20%, signaling that the company's print businesses are in peril.[15]
Declining movie attendance and DVD purchases
Movie Attendance has been declining for the past few years; price hikes designed to maintain revenues have only exacerbated the trend. With more convenient options such as DVDs or pirated movies online available to consumers, going out to the movies is losing its once-universal appeal. Studios have attempted to counteract the trend by focusing more on promoting DVD sales for their new releases, sometimes even releasing movies in the theaters and on DVD simultaneously. [16] However, this market, too, has matured quickly as DVDs reached full penetration in the United States. In the company's Q2 2009 for example, the Fox Home Entertainment's sales declined by 25% as consumers shifted to online content.[11]
Competition
News Corp as a whole competes with a number of large media conglomerates. However, each of the company's operating segments also compete with a variety of smaller companies focusing on 1 or 2 specific businesses.
The Walt Disney Company (DIS): Disney's strategy centers on creating hit-animated motion pictures for children and then capitalizing on this content through its other businesses such as theme parks, toys and shows on the Disney Channel. In 2008, the company's revenues were $37.8 billion.
Time Warner (TWX): As the largest U.S. media & entertainment conglomerate, Time Warner owns, among other properties, Time Warner Cable, Time Inc., Warner Brothers and HBO. In 2008, the company's revenues were $46.0 billion.
CBS Corporation (CBS): Although CBS has operations in radio, outdoor advertising and print publishing, its biggest segment by far is television. In 2008, the company's revenues were $14.0 billion.
Viacom (VIA): Spun off from CBS, Viacom operates in the film, television and digital media segments, and its brands include, among others, MTV Networks, BET Networks and Paramount Pictures. In 2008, the company's revenues were $14.6 billion.
Studio Market Share
The table below shows the 2009 domestic studio market share by gross (total) revenues.[17] On the whole, gross revenues for the industry in 2009 were $6.9 billion.
Rank Distributor Market Share Total Gross Movies Tracked 2009 Movies
1 Warner Brothers 20.4% $1,412.5 24 15
2 Paramount 18.5% $1,275.5 13 10
3 20th Century Fox 13.1% $902.6 15 10
4 Buena Vista 12.4% $855.3 16 10
5 Sony / Columbia 11.3% $777.2 16 13
6 Universal 9.4% $647.6 15 11
7 Lionsgate 3.4% $236.3 8 6
8 Fox Searchlight 3.1% $212.9 8 5
9 Summit Entertainment 2.3% $160.0 8 6
10 Focus Features 1.5% $105.2 6 5
11 Paramount Vantage 0.8% $56.9 3 1
12 MGM/UA 0.6% $42.8 4 0
News Corporation is a publicly traded company listed on the NASDAQ, with secondary listings on the Australian Securities Exchange. Formerly incorporated in South Australia, the company was re-incorporated under Delaware General Corporation Law after a majority of shareholders approved the move on November 12, 2004. At present, News Corporation is headquartered at 1211 Avenue of the Americas (Sixth Ave.), in New York City, in the newer 1960s-1970s corridor of the Rockefeller Center complex.
News Corporation (NYSE:NWS) is a diversified broadcast and print media company whose subsidiaries include the Fox Broadcasting Company, Twentieth Century Fox, MySpace, SKY Italia, Dow Jones & Company, The Wall Street Journal and Barron's. For the year ended June 30, 2009, the company generated $30.4 billion in revenue, down 8% from $33.0 billion in fiscal 2008.[1] Plagued by declining viewership and circulation, News Corp attributed this result to revenue decreases at its Television (-21%), Other (-20%), Book Publishing (-18%) and Filmed Entertainment (-11%) segments.[1][2][3]
News Corp received 38% of its 2009 revenues from advertising and, therefore, stands to lose significantly from a reduction in overall advertising spending, which is highly correlated with economic booms and recessions.[4] The company also received 45% of its 2009 revenues from outside the United States and this international exposure shielded the company from the full effects of the credit crunch and financial crisis.[5] Along with a host of smaller competitors, News Corp competes with a number of large media conglomerates like Time Warner, The Walt Disney Company, CBS and Viacom.
After the company acquired popular social network MySpace in 2005, MySpace lost its top ranking in social networking sites to Facebook. In March 2010, a rumor began circulating that MySpace's struggles have News Corp frantically trying to sell the site for approximately $700 million.[6]
Contents
1 Business and Financial Metrics
2 Operating Segments
3 Key Trends and Forces
3.1 Impact of an Economic Slowdown on Advertising Spending
3.2 Newspaper industry moving to mobile/digital content
3.3 Weakness in the Publishing Industry
3.4 Declining movie attendance and DVD purchases
4 Competition
4.1 Studio Market Share
5 References
In Q1 2011, News Corp posted a net income of $775 million, an increase of $204 million from the year before. Its revenue was $7.43 billion, a 3% increase from the $7.20 billion in the same quarter of the previous year, remaining consistent with analyst estimates of $7.42 billion. The increase in revenue was primarily driven by a 17% increase in the company's Cable Network Programming segment.[7]
Business and Financial Metrics
In 2009, News Corp made made $30.4 billion in revenues, down 8% from $33.0 billion in 2008.[1] Plagued by declining viewership and circulation, the company attributed this result to revenue decreases at its Television (-21%), Other (-20%), Book Publishing (-18%) and Filmed Entertainment (-11%) segments.[1][2][3] In the Television segment, revenues decreased due to the sale of 8 owned-and-operated FOX Network-affiliated television stations in July 2008 and lower advertising revenues. In the Other segment, revenues decreased due to the sale of a portion of the company's ownership stake in the NDS Group in February 2009. In the Book Publishing segment, revenues decreased due to the lower sales of general books and a weak retail market. In the Filmed Entertainment segment, revenues decreased due to reduced worldwide home entertainment and theatrical revenues. Rupert Murdoch, the company's chief executive, took a 40% pay cut in fiscal 2009 as the economic downturn sent News Corp's stock price plummeting. [8]
Operating Segments
News Corp has 8 operating segments: (i) Filmed Entertainment; (ii) Television; (iii) Cable Network Programming; (iv) Direct Broadcast Satellite Television; (v) Magazines and Inserts; (vi) Newspapers and Information Services; (vii) Book Publishing; and (viii) Other. Of all these segments, Filmed Entertainment (20%), Cable Network Programming (18%) and Television (15%) contributed the most its 2009 revenues. The company's smallest segments by revenue are Book Publishing and Magazines and Inserts. Until 2009, the New Corp's fastest growing segments by revenue were Newspapers and Information Services (39%, driven by the acquisition of Dow Jones & Company, owner of the Wall Street Journal), Cable Network Programming (28%, driven by higher affiliate and advertising revenues at FOX Broadcasting Company) and Direct Broadcast Satellite Television (22%, driven by subscriber growth at SKY Italia).
Key Trends and Forces
Impact of an Economic Slowdown on Advertising Spending
Spending on advertising is highly correlated with general economic growth, which makes such macro factors as oil prices and the U.S. housing market key concerns for News Corp. Advertising spend in 2007 grew less than 1% over the previous year due to weakness in the housing market and growing fears of a recession. With the effects of the subprime crisis continuing to spread, 2008 may be another weak year. [9] Advertising is a key component of News Corp's revenues in all segments, (cable and broadcast television, magazines and inserts, websites, etc.), making up 45% of fiscal 2007 revenues; continued weakness in advertising spending may have a strong negative effect on profitability.[10] Because of weakened advertising spending in 2008, NWS reported a loss of $6.42 billion mainly because of slumping ad sales in its television and print businesses. Furthermore, the company's quarterly revenue dropped by 16% because of slumping ad sales.[11]
Newspaper industry moving to mobile/digital content
The Wall Street Journal plans to make its mobile applications free to paid subscribers (of either the online or print WSJ) starting in October 2009. News Corp. previously planned on charging everyone to read WSJ articles on their phones, but had a change of heart, deciding only to charge those users who do not already have a paid subscription. With this decision, News Corp lowers the risk of upsetting and losing its existing customers, as well as expands to a new medium to attract further potential clientele, a move that benefits the company's overall business as it adapts to more modernized news mediums.[12]
Weakness in the Publishing Industry
The Print Publishing Industry publishing industry as a whole has been declining for the past few years. Circulation of magazines and newspapers is decreasing as consumers turn to alternative media sources such as the Internet, a cheaper and more convenient news source. Due to these decreases in circulation, advertising spending on newspapers and magazines has also shrunk, as have revenues from classifieds.[13] With the recent acquisition of Dow Jones (DJ), which publishes the Wall Street Journal, News Corp is increasing its exposure to the publishing industry. As a result of the deal, 26% of News Corp's revenues will come from publishing, partially tying the company's profitability to further industry developments.[14] In 2008, advertising revenues from NWS's Wall Street Journal decreased an estimated 20%, signaling that the company's print businesses are in peril.[15]
Declining movie attendance and DVD purchases
Movie Attendance has been declining for the past few years; price hikes designed to maintain revenues have only exacerbated the trend. With more convenient options such as DVDs or pirated movies online available to consumers, going out to the movies is losing its once-universal appeal. Studios have attempted to counteract the trend by focusing more on promoting DVD sales for their new releases, sometimes even releasing movies in the theaters and on DVD simultaneously. [16] However, this market, too, has matured quickly as DVDs reached full penetration in the United States. In the company's Q2 2009 for example, the Fox Home Entertainment's sales declined by 25% as consumers shifted to online content.[11]
Competition
News Corp as a whole competes with a number of large media conglomerates. However, each of the company's operating segments also compete with a variety of smaller companies focusing on 1 or 2 specific businesses.
The Walt Disney Company (DIS): Disney's strategy centers on creating hit-animated motion pictures for children and then capitalizing on this content through its other businesses such as theme parks, toys and shows on the Disney Channel. In 2008, the company's revenues were $37.8 billion.
Time Warner (TWX): As the largest U.S. media & entertainment conglomerate, Time Warner owns, among other properties, Time Warner Cable, Time Inc., Warner Brothers and HBO. In 2008, the company's revenues were $46.0 billion.
CBS Corporation (CBS): Although CBS has operations in radio, outdoor advertising and print publishing, its biggest segment by far is television. In 2008, the company's revenues were $14.0 billion.
Viacom (VIA): Spun off from CBS, Viacom operates in the film, television and digital media segments, and its brands include, among others, MTV Networks, BET Networks and Paramount Pictures. In 2008, the company's revenues were $14.6 billion.
Studio Market Share
The table below shows the 2009 domestic studio market share by gross (total) revenues.[17] On the whole, gross revenues for the industry in 2009 were $6.9 billion.
Rank Distributor Market Share Total Gross Movies Tracked 2009 Movies
1 Warner Brothers 20.4% $1,412.5 24 15
2 Paramount 18.5% $1,275.5 13 10
3 20th Century Fox 13.1% $902.6 15 10
4 Buena Vista 12.4% $855.3 16 10
5 Sony / Columbia 11.3% $777.2 16 13
6 Universal 9.4% $647.6 15 11
7 Lionsgate 3.4% $236.3 8 6
8 Fox Searchlight 3.1% $212.9 8 5
9 Summit Entertainment 2.3% $160.0 8 6
10 Focus Features 1.5% $105.2 6 5
11 Paramount Vantage 0.8% $56.9 3 1
12 MGM/UA 0.6% $42.8 4 0