News Corp. Annual report 2012
http://reports.21cf.com/Report2012/2012AR.pdf
A letter from Rupert Murdoch
It
takes no special genius to post Good earnings in a booming economy. It’s the
special company that delivers In a bad economic environment.
At
a time when the U.S. has been weighed down by its slowest recovery Since the
Great Depression, when Europe’s currency threatens its union And, I might add
when our critics flood The field with stories that refuse to move Beyond the
misdeeds at two of our papers In Britain, I am delighted to report Something about
News Corporation you Might not know from the headlines: In 2012, for the second
year in a row, we have brought our stockholders double-digit Growth in total
segment operating income.
We
accomplished this because we do not consider ourselves a conventional Company.
A conventional company tends to sit back on the business models that worked for
it in the past. Our corporate culture at News Corp. Is very different. We know that
business models that work today may be obsolete tomorrow, so we are always investing
in the next generation – especially when our established models are doing well.
Another way of putting it is this: The growth in earnings that we report today is
the result of tough and sometimes unpopular decisions we took in the past.
We’ve
just made another one of those big decisions. In June, I announced the board’s
approval to pursue a change that will take one of the largest and most successful
media enterprises in the world and transform it into two separate, publicly traded
companies – one focused on news, publishing and education, the other on media and
entertainment. Here’s why: For all the success we have had in building This company
(the value of our stock, for example, has increased nearly 25 percent in the last
12 months alone), I believe News Corporation is still undervalued. Our aim is To
unlock more value for our stockholders and enable each company to better
deliver on its promises to its customers across the globe.
The
publishing company will consist of our news and publishing groups, as well As our
groundbreaking digital education group. In sum, we have the minds and we Have the
assets. While most thinking about newspapers remains stuck on newsprint, We regard
our papers as trusted brands that distribute news and views across dozens of different
platforms, 24 hours a day. By realigning and re-organizing, we intend to take advantage
of the opportunities before us by expanding what we offer and the Ways we offer
it.
I
know it is fashionable these days to dismiss publishing, especially newspapers.
Elites in particular look down on the popular press, but within the U.K., The
Sun Has 12 times the circulation of The Guardian and 27 times that of the
Financial Times. In Australia, we are the leading publisher of news and have
made great Strides to restructure the business as we prepare for the digital
future.
For
publications that earn the loyalty of their readers, the opportunities are very
Real – and someone is going to grasp them. We believe it will be News
Corporation. We start with a huge advantage in customer loyalty. And we plan to
make full use of digital to reward that loyalty by giving our customers the
news, information And entertainment they want, the moment they want it and in
the format that Best suits their individual lifestyles. As we embrace this
future, the failure of Imagination we see at so many other publishing companies
only gives us a greater competitive advantage.
Harper
Collins is a highly profitable publisher that already has 25 percent of Its books
as ebooks in the U.S., with international moving in the same direction. The
Wall Street Journal Digital Network – which also includes Barrons.com – Now boasts
1.3 million paying customers around the world. Meanwhile, our new Education division
is well-positioned to do what so many school districts are crying Out for:
Revolutionize classrooms around what works so that every schoolchild, No matter
where he or she lives, has the opportunity to learn and achieve.
People
like to say that the most valuable asset in today’s world is knowledge, And that
a free and democratic society depends on an educated public. Well, That’s exactly
the business we are in. With our new company, we will help our customers gain
the knowledge they need to get ahead in life and make informed Political choices.
And we will do it by aggressively growing our businesses across Geographical borders
and new global platforms.
As
we position ourselves as the world’s most dynamic publishing company, We will
also create the world’s top media and entertainment company. This new company will
encompass our premier broadcast and cable networks, leading film and television
production studios, and our highly successful pay-tv businesses. Our cable, film and television operations
have already proved their ability to Generate increased earnings. From Fox News
and our regional sports channels to TV shows such as Modern Family and films
such as Rise of the Planet of the Apes And Ice Age, these brands are popular
because they have earned a reputation for Quality and creativity.
They
also reflect our fundamental investment in content. In sports, the NFL, World
Cup and Sky Sports are examples of the exceptional content we deliver To our
customers. We are also investing in high-growth markets, and Fox Sports Brazil
is a good example of this dynamism. Make no mistake – we won’t be resting on
our laurels. Families across The world are consuming content across myriad
platforms, and we are more Determined than ever to seize that demand and
develop strategies to maximize Our revenues. We will do that by offering our
customers the best value for their Money, by taking advantage of new platforms
and, most of all, by continuing To produce the compelling, quality programming
for which people are willing To pay.
Now,
a conventional company might make its play for international markets by trying to
guess winners. Our success, by contrast, comes from a considered strategy Of buying
up shares in promising companies in countries where we already have A presence.
As a global player, we have a key advantage here because we already have people
in most of these local markets – for example, Fox Pan American Sports, Where we
produce local programming directly within the region. So when we buy a local
company, it’s run by people on the ground who know their customers, theirMarket
and what they need to do to stay ahead of the competition.
Our
international strategy is based on appealing directly to the hearts and Minds of
customers, and it is already bearing fruit. The rapid expansion of Fox International
Channels is one example. Another is our movie studios, where we are delivering
films in local languages in 11 different countries outside the U.S.
Digital
is a big part of this future. A perfect example is the $300 million In revenue
we reported this year from two on-demand deals with Netflix and amazon.com for
our television and films. These deals are important because they allow us to
generate significant new revenue streams without cannibalizing our existing
businesses.
Like
any company, we are proud of the results we have delivered this year. Unlike
most companies, we will not allow our success to lull us into complacency. That’s
why we continue to invest – in content, in talent, in our businesses, in
highgrowth Markets and in more profitable models for the future.
From
our modest beginnings in the city of Adelaide to our present status as a global
media leader, News Corp. has always had one aim: to deliver the best News and
entertainment to our customers and to give it to them at the best price. To do
that, and to do it consistently, means hiring the most talented and innovative People
in our industry. Our results speak to the creativity, innovation and leadership
Of the approximately 48,000 people who make News Corporation their home.
Over
the years, I have become accustomed to the noise and negativism of the Naysayers.
Time and again we have done what they said was impossible: from Launching the
first national newspaper in Australia to building a fourth broadcast Network in
America to establishing a great television company in Britain.
So
my advice is this: Don’t judge us the way you would a conventional company. We’re
a company that thrives on challenges. Our record bears this out. With this newest
transformation, we charge into the future as two new companies whose Structures
will help each be more nimble, more innovative and more aggressive than Its competitors
in the pursuit of value for our investors.
Yours,
Rupert
Murdoch
Chairman
and Chief Executive Officer
News
Corporation
We continue To invest – In content, In talent,
in our Businesses, In high-growth Markets and in More profitable Models for the
Future
With our new company, We Will help our Customers gain the Knowledge They
need to get Ahead in life and Make informed Political choices.
Our
aim Is to unlock more Value For Our Stockholders
We
have no Intention Of resting on Our laurels We are always
Investing
In the next generation
The
World’s Leader in Quality
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