Global media giant News Corporation has taken aim at artificial intelligence companies, advertising agencies and investors after unveiling record quarterly revenue and earnings.
CEO Robert Thomson said News Corp’s U.S. publishing business Dow Jones and newspaper the New York Post had started legal action against Perplexity, a company which he believed was selling products based on their journalism.
He said News Corp was preparing for further action against other companies that “have ingested our archives and are synthesising our intellectual property”.
“We have indicated in the past that we prefer to woo rather than sue but we have reached a point where litigation is also essential,” Thomson said in an earnings call.
The U.S. election had highlighted the importance of “trusted journalism in a media maelstrom in which some journalists mistook virtue signalling for virtue”.
“Artificial intelligence recycles informational infelicities and it is critical that journalistic inputs have integrity, which is why our partnership with OpenAI is so crucial and why we intend to sue AI companies abusing and misusing our trusted journalism,” Thomson said.
He said News Corp, which is about 40% controlled by Rupert Murdoch and his family, was also appealing against the blatant biases of ad agencies and ad associations.
He said they were boycotting some “mega properties” on the basis of personal political prejudice that was detrimental to companies which advertised, and their shareholders, which were being denied chance to optimise audience reach.
“The (advertising) heavens are certainly not in equilibrium,” Thomson said.
He said the News Corp share price did not reflect the collective value of its businesses, with a clear gap remaining despite the strong increase in the price recently.
The most glaring discrepancy was how the market had assessed the value of its 61%-owned digital property subsidiary REA Group (ASX: REA) in its portfolio.
Thomson said if the stake was valued at market prices, this meant the balance of the global media group was less than $5 billion.
This included Wall Street Journal publisher Dow Jones, book publisher Harper Collins, British and Australian newspapers, British radio network, and other companies.
“This simply defies investing or mathematical logic,” he said on the call.
He also said the group’s evolution was underscored by the fact that advertising in its media business had fallen from 35% of total revenue a decade ago to 7% in the last quarter, with Dow Jones seeing a fall from 38% to 15% over the same period.
Rival media group Nine Entertainment (ASX: NEC) had a similar message at its recent annual general meeting, saying income from subscriptions and licensing had increased its share of total revenues.
At 3.15pm (AEDT) News Corp (ASX: NWS, NWSLV; Nasdaq: NWS, NWSA) class B voting shares were trading at $48.08, up $0.87 (1.84%), after trading between $47.62 and $49.30. Its market cap is approximately $25.54 billion.
