News Corp has announced new management of their Australian division as digital continues to stop the presses of traditional print.
News Corp (ASX: NWS) has recently announced that the chief executive of its Australian division, Julian Clarke, will step down at the end of the year, to be replaced by chief operating officer Peter Tonagh. News has also added Michael Miller, currently CEO of publishing and radio company APN News and Media, as executive chairman of the Australasian region. Michael is no stranger to News Corp Australia: he was a director of the company between 2004 and 2013 and the company’s marketing director before that.
The changes occur at a time when the media industry is undergoing rapid change. Roy Morgan Research found the total audience of Australia’s most popular newspapers fell 7% on average in print form in the 12 months to March 2015, while online viewing, whether through computers or smartphones, for the same brands had an average increase of 8%.
The switch to digital has already claimed News Corp’s free afternoon newspaper ‘Mx’. The company decided on the closure due to the ‘changing habits of commuters who now turn to their mobile phones and tablets on their way to and from work’.
News Corp management appears to understand the importance of digital media. The company owns over 60% of online real estate company REA Group (ASX: REA) and has recently reported positive results from its website realtor.com. In fact, the digital real estate division has seen revenue soar by almost 50% in the first three-quarters of this year.
The company was also the first to introduce paywalls on the websites of its mass-market newspapers, an approach now accepted by most news readers. The ability to understand and change with the marketplace may explain why the company’s overall revenue in Australia has been relatively stable compared to the general downtrend of rival Fairfax.
With Tonagh and Miller, News has two executives with bucket loads of experience in the media industry. News Corp was created in 1979, its brands have covered some of the most significant events and changes in the world today. The challenge for Tonagh and Miller will be to set a strategy that enables the Australian division of News Corp to grow in a world where download speeds are more important than printing presses.
This article contains general investment advice only (under AFSL 282288).