What to Expect as News Corp. Dives Into Business of Education

Hearst Magazines Chairman Cathie Black got most of the attention last week when she was named the next New York City schools chancellor, succeeding Joel Klein as the head of a $23 billion public-education system with 1.1 million students. But Mr. Klein's new job at News Corp., advising Chairman-CEO Rupert Murdoch on getting into the education industry, may eventually prove more captivating, both for education and the media business.

Ms. Black, after all, is going to build on eight years of work by Mr. Klein and Mayor Michael Bloomberg, who will still make the big calls on public education. But Mr. Klein is going to seek opportunities in education, an occasionally polarizing area where some people don't like to see private companies tread, for News. Corp., an occasionally polarizing media behemoth whose assets include Fox Broadcasting, Fox News, 20th Century Fox and The Wall Street Journal.

Hearst's Cathie Black Named New York City Schools Chancellor

Succeeds Joel Klein, Who Jumps to News Corp. as Special Adviser to Murdoch
Although the Washington Post Co. set a precedent for a big media outfit getting involved with education, News Corp. is likely to do it very differently. The Washington Post Co. makes most of its revenue, 62%, from its Kaplan education division, and most of its education revenue from higher education programs offering bachelor's, master's and other degrees and certificates.

But the higher-education business is poised to contract as a result of government regulations focusing on excessive student debt loads, said Ariel Sokol, an analyst covering the Washington Post Co. for UBS. "I sincerely doubt that you're going to see new entrants in this space any time soon," he said.

And, of course, Mr. Klein has spent his tenure as schools chancellor working on education from kindergarten through 12th grade. So it's most likely that Mr. Murdoch and News Corp. are eying the same turf, where the business opportunities include charter schools, virtual schools and technology-based teaching and learning aids.

The immediate best bet is that News Corp. will seek possible investments in technology platforms that schools, public or private, can adopt to help students learn -- a kind of paid-content business, which is one of Mr. Murdoch's big media priorities.

Mr. Klein referred to those kinds of products last week during the press conference introducing Ms. Black as his successor. "As recently as yesterday I was in Brooklyn, looking at a really great learning platform that our kids are engaged with and that our teachers love," he said. He was visiting a kindergarten in Brooklyn that uses Time to Know, a digital curriculum system offered by a private company of the same name.

"To me that's the future and I want to be at the center of it," Mr. Klein said. "That's why I've accepted an offer from News Corp. to become an executive vice president in the chairman's office and a member of their board of directors."

Whether outsiders will welcome News Corp. into the education business is another question. "There is a reasonable debate to have on education, about what we need to do, about the federal government's role in the process," said Ari Rabin-Havt, VP-research and communications at Media Matters, so relentless a critic of Fox News that George Soros gave it $1 million last month explicitly for that reason. "Fox News as an entity gets in the way of those debates."

Fox News host Glenn Beck has certainly criticized the school system. "Sell a car if you have to," he told viewers earlier this year. "Get your kids out of this indoctrination or our republic will be lost."

News Corp.'s James Murdoch Bets on Paid Model

James Murdoch has no use for the Internet-is-free crowd. The CEO of News Corp. Europe and Asia said finding a business model for news in the digital era isn't all that complicated.

"If you're going to monetize something, you should probably not give it away for free," he said during a Q&A at the Monaco Media Forum. "I think digital newspapers' economics will look a lot more like cable channels."

It's a long road to get there. The Wall Street Journal has been able to charge for access because most of its subscribers are using corporate credit cards. But the jury is out on subscriptions elsewhere in the empire. The Times and Sunday Times were put behind a pay wall in July. News Corp. last week crowed it has sold 105,000 digital products, a roll-up that doesn't break out monthly subscriptions. Some estimates put that figure at just 10,000 per month at the expense of most of its Web traffic.

Murdoch said publishers need to be willing to sacrifice wide reach in the process. The upside is those that pay tend to spend much more time with the publication, he added.

"We're happy to invest more and price it fairly and accept the fact that not everyone will pay," he said.

The belief in free is an article of faith for the tech world. Chris Anderson, the editor of Wired, even wrote an entire book on the economics of business models based around technology enabling free services. Those views aren't in tune with reality when it comes to media, Murdoch said. They rarely, for example, take into account the chain of professionals that need to get paid along the way for the production of quality content.

"There's no new technology that makes athletes less greedy," he said.

The invitation-only Monaco Media Forum, which continues through Nov. 12, gathers approximately 300 global leaders in traditional and new media for discussions about the future of online, broadcast and print.

Innovate or die says News Corp. chief

CAMBRIDGE, U.K. — News Corp. topper Peter Chernin has urged British TV chiefs to adopt innovative, risk-taking strategies and embrace new media -- or risk extinction.

Speaking at the Royal Television Society’s Cambridge Convention, president and chief operating officer of News Corp., said that traditional media companies must embrace digital media or risk extinction

News Corp. No. 2 exec Peter Chernin added that, "To dismiss user-generated content as crap and blogs as unauthoritative is not only unproductive, but a waste of time."

Chernin said the world of multi-platforms had created a truly Darwinian entertainment industry where only those fleet of foot would thrive.“There are huge rewards for those who innovate and death to those who do not,” he said.

“There has been a fundamental shift that has completely democratized our business,” he said. The News Corp. chief said there was a “golden opportunity” for media companies to make money from this new consumer-driven model.

“We possess the world’s most recognized and loved brands, and have the opportunity to leverage them in new ways.”

He added, “To dismiss user-generated content as crap and blogs as unauthoritative is not only unproductive, but a waste of time.”

Big Media Web Acquisitions Disappoint

Several traditional media companies are busy acquiring Internet start-ups. But more than a few of the recent deals are viewed as letdowns. Conde Nast purchased Reddit last year, only to see it eclipsed by rival Digg. Even News Corp.'s buy of MySpace is "showing signs of uncertainty."

CNet has more.

Murdoch invests in the Baltics

Rupert Murdoch’s News Corp has bought two Latvian TV channels to extend its footprint into the Baltic region.

The company’s subsidiary News Corp Europe has acquired Latvian Independent Television (LNT) and a 70% stake in TV5.

Chairman of LNT Andris Ekis said: “LNT and TV5 are the beginning of the development of News Corporation's network in our region.” He added that the media giant was interested in developing a presence in Estonia, Lithuania and Belarus.

Murdoch Sends Second Letter to Bancroft Family

AdAge announced today that Rupert Murdoch has sent a second letter to the Bancroft family trying to earn their support for his $5 billion bid to buy Dow Jones.

In his letter to the Bancroft family, Rupert Murdoch writes: 'I would like to express my regret if you have been placed in an uncomfortable position.'

"In the weeks since our proposal was made public on Tuesday, May 1, there has been much written about a potential combination and News Corporation's intentions," he writes later. "I would like to express my regret if you have been placed in an uncomfortable position by the events of the past week."

A News Corp. acquisition of Dow Jones would have no effect on the journalistic independence and integrity that belong to company brands, including The Wall Street Journal, he said. To provide some assurance, he would give a Bancroft family member a seat on the News Corp. board and create an independent, autonomous editorial board to ensure the integrity of Dow Jones properties.

Read the full article here

Murdoch Woos Bancrofts With Flattery, Not Higher Bid

Rupert Murdoch is trying to persuade the Bancroft family to sell him Dow Jones by offering appeals to their pride -- but not more money. "We admire the Bancroft family," he says. Wall Street firms are becoming pessimistic that Murdoch will succeed. A competing bid is seen as unlikely.

Bloomberg has the full story