The News Corp. split separating the publishing arm (Wall Street Journal, HarperCollins, Times of London, etc.) from the entertainment arm (20th Century Fox, Fox News Channel, and other Fox broadcast stations, etc.) will have a limited impact on the company’s publishing business, at least in the short term.
The split makes the entertainment area look more profitable on paper, which is great for it. The now smaller publishing side will now have to face some of the same issues that other publishing companies face: feeling a greater bottom-line pinch from advertising declines and the continued need to rethink the business model, for example. According to The New York Times, the company’s many publishing properties were already undergoing a restructuring that eliminated job security.
However, with the continued support of Rupert Murdoch, the publishing business could still do relatively well. In fact, according to Vocus’ small business guru and HARO founder Peter Shankman, the move could “let up pressure from the UK regulators about them owning too much of the media there.”
But there’s still that pesky phone-hacking scandal to deal with. The entertainment side will benefit from a separation from the parts that are dealing with these issues, Shankman points out. However, that still leaves the publishing side, the weaker of the two, to deal with the repercussions.
For now, Variety is declaring News Corp. a Wall Street “darling.” We’ll see how long this lasts.
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