News Corp chairman Rupert Murdoch has vowed the company will start charging for content on all its news sites after his company posted a full-year net loss of $US3.4 billion for 2008-09.
The company reported a full-year operating profit of $US3.6 billion for 2008-09, compared with an operating profit of $US5.3 billion in 2007-08, as advertising revenue slumped around the world.
"The past year has been the most difficult in recent history, and our 2009 financial performance clearly reflects the weak economic environment that we confronted throughout the year," Murdoch said overnight.
However, he says News Corp remains well-placed for the recovery and claims "nearly all" of the company's businesses have increased market share. That said, Murdoch has warned that better times may take a little while to arrive.
"The worst may be behind us, but there are no clear signs yet of a fast recovery."
But the biggest bombshell to come out of the News Corp profit results was Murdoch's sweeping declaration that News will make online users pay for content.
"We intend to charge for all our news websites," Rupert Murdoch said on a conference call held after the profit announcement.
"We're thinking in terms of this financial year."
The move represents a huge shift for Murdoch and News, who have previously pursued a strategy of giving content away for free in order to attract as many visitors as possible, and then selling advertising around this content.
But clearly Murdoch has decided that this model is unsustainable. As evidence, he points to the success of premium financial newspaper, the Wall Street Journal, which does charge for some content.
"Quality journalism is not cheap and an industry that gives away its content is simply cannibalising its ability to produce good reporting," he said.
"The increase we have seen in our Wall Street Journal subscription proves to me that the market is willing to pay for that quality."
Murdoch acknowledged competition will come from free news websites - he cited the British Government-owned BBC as a big potential rival - but said News would need to respond by "just making our content better and differentiating it from other's".
"We're certainly satisfied that we can produce significant revenues from the sale of digital delivery of newspaper content," Murdoch said.
"I believe if we're successful we will be followed by other people."
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They could save a lot more money by stripping the fluff out of the current events news - have it more Twitter-style. Half the time you just have to read the headline to be up to date. There's just too much information coming at us these days to worry about the "quality journalism" Rupes is talking about :)