News Corporation (NASDAQ:NWSA) Q2 2017 Earnings Conference Call - Final Transcript

Feb 09, 2017 • 05:00 pm ET


News Corporation (NASDAQ:NWSA) Q2 2017 Earnings Conference Call - Final Transcript


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Robert J. Thomson

we acquired with Harlequin which has given us greater access to authors and readers in a broader number of languages and regions.

The last month, we announced that we were achieving full ownership of HarperCollins Brazil. And we're more digital because of strategic investments in our news platforms, as well as the influence of our innovative acquisitions including Storyful, Unruly and Checkout 51. Our Digital focus has helped the News and Information Services segment garner 27% of its revenues through digital, up from 22% last year. We are also testing our own digital ad network, which will provide a measurable high quality audience for advertisers. We are increasingly wary and rightly so about the murky, tenebrous world of digital advertising. Thanks to this strategy. We believe we are far better positioned than our perceived peers to weather the storms buffeting the media and publishing landscape.

We continue to emphasize the importance of cost control and collaboration between and among our businesses. We faced similar challenges and are sharing expertise and insight. Our masters are committed to producing high quality content verified by a talented breed of fact checkers called journalists. We are in an era in which integrity is priceless, yet digital distributors have long been a platform for the fake, the foe and the fallacious, highlighting an issue, which we have long stressed that they have eroded the integrity of content by undermining its prominence. Put simply, content distributors are profiting at the expense of content creators and at the expense of veracity. There are clearly social as well as commercial consequences to this contradiction and the issue is far from being resolved, a tweak to an algorithm or fact check here or there does not address the basic problem.

Ad agencies and their programmatic networks are also at fault, because they have sometimes artificially aggregated audiences and these are then applied with content of dubious provenance. The agencies win, the fabricators of fake win, and advertisers and society both lose. Affinity and integrity are core elements of a sustainable relationship between advertisers and consumers and yet affinity and integrity of far too often missing in the modern marketplace. Audiences are craving integrity, which is why so many of our markets have reported strong growth in readers and subscribers. As an example, The Wall Street Journal experienced a significant increase in paid digital subscribers through the election, adding more than 110,000 in Q2 compared to Q1 and surpassing 1 million, now representing more than 50% of the total subscriber base.

This reflects an increased appetite for quality journalism in an era of remarkable upheaval and in the ad market, there has been an awakening and there will surely be a reckoning. Advertisers want reassurance that their products are displayed in suitable surroundings. They don't want modeled metrics and they don't want digital platforms and ad agencies arbitraging ambiguity. The dangers of Chief Marketing Officers chasing fashion rather than function was highlighted in The Times of London today. Some of