Three Reasons NWS is Old News
Related Stocks: NWS, DJ
First of all, I think Rupert Murdoch’s new venture of creating a financial news network to compete with CNBC will be a losing proposition. CNBC has a loyal core audience that will be tough to steal. In the afternoon, it is the premiere real-time business news source. In the evening, their newer programming is appealing to a niche of home speculators. If Murdoch’s new business channel is anything like the FoxNews business coverage (which is moreso business “infotainment”), I don’t see it capturing the interests of serious investors.
It has been suggested that Rupert Murdoch’s venture to acquire Dow Jones (DJ) will be part of this new business network. Like many fellow devoted readers of the Wall Street Journal, I am concerned that its high integrity reporting will be turned into the “Fox News Journal.” Any changes made to the editorial oversight will undoubtedly result in a subscriber backlash. As said in this week’s Barron’s, “It particularly pains us to witness Warren [Phillips]’s and Peter [Kann]’s infinite lesser, who couldn’t run water and are journalists in pretense only, scurry out from under the rocks to besmirch their legacies.”
My second reason for dumping NWS is the decline in Fox programming quality. Have you seen the coverage at FoxNews lately? It revolves around tabloid stories like Paris Hilton and Anna Nicole Smith. It’s an insult to the intelligence of its viewers who became FoxNews fans for the unique views on political and social issues. The viewers are tuning out, as can be seen in the ratings.
In addition, the primetime Fox Television lineup has been in a decline. It’s signature 24 has aired its worst season ever, with ratings falling through the roof. The Simpsons are losing popularity. All we have left holding it together are House and Family Guy.
Finally, my third reason is the soon-to-be exponential decline of MySpace. The Internet is a quickly changing environment, and it’s only a matter of time before a new social networking site strikes. MySpace has enough people who dislike it (many of them are Facebook users). The hopes for expansion in the China market are over stated; there are too many cultural differences and that region is already dominated by competitor Cyworld.
Full Disclosure: At the time of this writing, Winston no longer holds a position in NWS.
