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In June 2012, News Corp. began the process of splitting into two companies consisting of its publishing and entertainment properties. The publishing division, which lost money in 2012, will remain known as News Corp. and will consist of its newspapers, Dow Jones newswire, and HarperCollins books. It will be headed by Wall Street Journal managing editor Robert Thomson. The entertainment division will be called Fox Group and will consist largely of its various television and film properties, including Fox News. Murdoch resigned from the board of News International, News Corp.’s British newspaper division, in July 2012.
In July 2011, News Corp. closed the 168-year-old tabloid News of the World, which Murdoch had owned since 1969, over a phone-hacking scandal involving the paper’s reporters and editors that also prompted an investigation from the FBI and the arrests of several Sun journalists over alleged bribery of government officials. Rebekah Brooks, the former head News International, was arrested and later charged with perverting the course of justice and conspiracy. In total, more than 50 arrests had been made in the scandals by British police as of May 2012.
In its formal report on the scandal, issued in May 2012, the British Parliament declared that Murdoch was “not a fit person” to lead the company. As of the end of 2012, the scandal had cost News Corp. more than $360 million. News Corp.’s British newspaper division settled dozens of lawsuits with hacking victims in January 2012, and more than 100 civil lawsuits have been filed over the hacking. In February 2012, News Corp. launched the Sun on Sunday to take News of the World’s place as a Sunday tabloid, though that paper’s circulation fell 28% in its first two months. The scandal has prompted much criticism of a culture of corruption at News Corp.
News Corp. made $2.74 billion in profit in 2011, and as of 2011, most of its revenue came through cable network programming. MySpace and its newspaper division have both failed to generate significant contributions to that profit. Those organizations are subsidized in part by the large profits generated by other units of News Corp., such as 20th Century Fox.
Murdoch has been an outspoken proponent of paid content online and a critic of free aggregators and search engines, such as Google. He announced in 2009 that his newspapers would charge for online access within a year, and threatened to block Google’s access to his news sites. In 2012, however, News Corp. restored the content from all of its newspapers to Google’s indexing and reached a deal with Google to put its movies up for sale or rent via YouTube.
The Times and Sunday Times put up paywalls online in June 2010 and removed their content from Google. (News Corp. would allow previews to be indexed in 2012.) Four months later, the News of the World tabloid went behind a paywall, as well. In early 2010, News Corp.’s British newspapers also pulled out of the Nexis news archive. The Sun is set to go behind a paywall in August 2013 that costs £2 per week and includes Premier League highlights.
Beginning in 2010, News Corp. attempted to take full ownership of the British pay-TV network BSkyB. The bid drew initial resistance from News Corp.’s competitors, and in July 2011, faced with increased scrutiny in the wake of the News of the World phone hacking scandal, News Corp. dropped the takeover bid. The following year, however, BSkyB was declared “fit and proper” and allowed to keep its British broadcasting licenses.
News Corp. also bought the software platform for the Skiff e-reader in 2010 and invested in the online paid-content service Journalism Online, both moves regarded as a ramp-up for a large paid-content network.
News Corp. bought MySpace in 2005 with plans to extract as much marketing value as possible from the social network, but the social network has failed to deliver on those goals. The site’s new leadership talked in early 2010 about returning MySpace to its roots as a pure social network and developing more mobile features. News Corp. is currently trying to sell MySpace.
In 2008, News Corp. cofounded the online video site Hulu, which contains licensed television and movie content. A joint effort with NBC Universal and The Walt Disney Co., the site was free to users at its launch, and fully ad-supported, but in June 2010 its executives revealed plans to charge for content on other devices, including mobile. In November 2010, Hulu Plus came out of previews, charging users $7.99 a month for access to its premium video content.
In early 2011, News Corp. launched The Daily, the first tablet-only daily news publication. News Corp. initially invested $30 million in The Daily, with a weekly production cost of $500,000 and a reported staff of about 120. The publication costs 99 cents per week, or $40 per year. It was initially launched on the iPad, with reported plans to expand to Android-based tablets in mid-2011. The publication was reported in mid-2012 to be losing $30 million per year and to be “on watch” for possible closing in late 2012.
In 2013, the company announced the launch of two 24-hour sports networks — Fox Sports 1 and Fox Sports 2 — to compete with ESPN.
OpenFile was a user-driven local news site based in Toronto, with affiliates in five other Canadian cities, Montréal, Calgary, Ottawa, and Vancouver, and Halifax. OpenFile was founded by Canadian journalist Wilf Dinnick in May 2010. The site relied on users to direct its news coverage, inviting them to start a “file” (the site’s founders chose the term to…