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News Corp.: Constraining Content Produces Piracy

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07.24.09 Post a Comment

by Michael J. Miller At Brainstorm Tech, News Corp. digital chief Jonathan Miller seemed quite positive on both advertising and future business models for technology in the Internet world.

Miller said MySpace needs to evolve and spot changes faster, but will continue to change and focus on new things. MySpace was now going to focus internally on having small teams focused on improving different parts of the service, said Miller, and News Corp in general was focused more now on setting the directions of its existing properties, rather and acquisitions. He was particularly bullish about advertising, pointing out that we haven't yet seen the major migration of brand advertising online: Today, if 9% of U.S. advertising is online only, one-third is brand advertising and two-thirds is performance marketing. That will change over time.

In the general online world, Miller did say that he also saw more premium interactions, but there would be both free and paid services. He talked a lot about how there has been a breaking up of some companies between content and distribution, but said he thought News Corp. would continue to do both.

Among the lessons Miller said that the industry has learned is that you can't over-constrain content, or you get piracy, as happened with music. But the shift online was exacerbating the tension between content companies and distribution companies (News Corp. does both), because if there's less revenue online, you can't “split the pie" as many ways. He used Hulu as an example, as it is primarily owned by the content providers.

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