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News Corp to charge for online content -

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ELEANOR HALL: Rupert Murdoch this morning sounded a grim warning for traditional newspaper
operators when he announced a fourth quarter loss of more than $US200 million earlier today.

But at the same time he issued a challenge to Google and other internet operators saying that the
days of free news content on the internet are numbered and that within the year he'll be charging
anyone who wants access to News Corporation stories.

And the chairman and chief executive of News Corporation was adamant that his company would survive
the current industry turmoil and win the battle on how to make a profit from the internet.

Here's our business editor Peter Ryan.

PETER RYAN: News Corporation's fourth quarter loss of $US203 million was in line with expectations,
given the impact of the global financial crisis and deep falls in revenue across the business with
the exception of cable television.

But the numbers are staggering when viewed over the full year - a net loss of $US3.4 billion down
30 per cent on the previous year, prompting this gloomy assessment from News Corporations chairman
and chief executive Rupert Murdoch.

RUPERT MURDOCH: The last year has been one of the toughest we've faced in our history. And results
they've just outlined for fiscal 2009 clearly reflect the sour economic environment that affected
our businesses throughout the year.

PETER RYAN: News Corporation has been battening down the hatches still reeling from huge declines
in classified advertising revenue while fine tuning a blueprint for future media models that make
money like the old.

Rupert Murdoch is optimistic but realistic about the challenging digital frontier he's planning to
conquer.

RUPERT MURDOCH: The tumultuous and unprecedented change affecting the entire media sector and
particularly newspapers and free to air broadcasters cannot be ignored. I think that the worst may
be behind us but there are no clear signs yet of a fast economic recovery.

PETER RYAN: Mr Murdoch says that changes are rapidly evolving and that traditional options of cost
cutting are not going to work.

Instead he's laid down a challenge to digital competitors and the online giants Google and Yahoo
who pluck news content from the internet that the days of a free ride are almost over.

RUPERT MURDOCH: The digital revolution has opened many new and inexpensive methods of distribution
but it has not made content free. Accordingly we intend to charge for all our news websites. The
Wall Street Journal's WSJ.com is the world's most successful paid news site. We'll be using our
profitable experience there and resulting in unique skills throughout News Corporation.

Quality journalism is not cheap and an industry that gives away its content is simply cannibalising
its ability to produce good reporting.

PETER RYAN: Rupert Murdoch took a multi-billion dollar gamble when he bought The Wall Street
Journal but the online subscription model is now a world beater as the only publication to expand
in both print and online during the recession.

It's a model that's being finetuned here in Australia at the News Corporations subsidiary News
Limited which publishes major mastheads such as The Australian, Daily Telegraph, Herald Sun and the
popular news.com.au website.

GREG BAXTER: We've been working towards this for some time. Integration you know is the buzz word
in journalism I guess for the last couple of years. We've tried to pick up the pace on it.

PETER RYAN: Greg Baxter is News Limited's director of corporate affairs.

GREG BAXTER: Eventually as you alluded to we are looking to produce content and ultimately we'll be
able to generate some additional revenue in addition to the revenue that we can get from
advertising.

PETER RYAN: So you're just waiting for the order to press the subscription button?

GREG BAXTER: No we're not waiting for any orders. I mean we're just pressing ahead. I mean it's
part of the business plan for most of the editorial operations in News Corp around the world are
heading down this path.

PETER RYAN: But Harold Mitchell chairman of the media buying company Mitchell Communications says
Rupert Murdoch could be in for the fight of his life.

HAROLD MITCHELL: Rupert Murdoch has quite rightly accepted the challenge of now getting people to
pay for content. Very difficult because for more than a decade of course it's been given away free.

PETER RYAN: Harold Mitchell says News Corporation is already preparing a legal battle to prevent
Google and Yahoo from taking its news material and using it free of charge.

HAROLD MITCHELL: The fight is on two fronts. One is to stop people like Google and organisations
like Google simply taking the information and making it available and using it inside their
product.

And the second thing is to get the product in such a way that subscribers are prepared to pay. But
it's a fight that has to be won.

PETER RYAN: But do you think that culturally the world has changed so much that people are used to
pretty much cherry picking their own news?

HAROLD MITCHELL: The world has changed completely. There's 400,000 different ways that people can
now get information. That's however many sites we've got available that we can advertise on and
therefore the consumer can go and get. And of course it can be done at a click of a button. And
we've got a generation of people who've simply grown up with all of this.

But the challenge is there but in the end content will win.

ELEANOR HALL: That's the media buyer Harold Mitchell ending that report from business editor Peter
Ryan.

And we did ask Google executives here in Australia and in the United States to respond to Mr
Murdoch's comments but the company declined our invitation.