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“It is increasingly clear that the worst is over.” On Wednesday night Rupert Murdoch joined the growing ranks of former curmudgeons now infected with a spirit of optimism. Commenting after News Corp announced results for its fiscal third quarter, Mr Murdoch is the most upbeat chief executive of this media reporting season so far. But by reporting profits that did not fall quite so far as feared, the company confirmed the more positive trend already set by Time Warner Cable and Viacom this week.

Even as confidence returns though, it is clear that the recovery will not look like the recent past. In particular, the newspaper business remains moribund, with profits almost non-existent. In the UK, even though price increases at all four titles pushed up circulation revenues, advertising dropped by more than a fifth. Some forms of ad revenue, such as recruitment, may have been lost to the web for good.

Indeed, Mr Murdoch is clearly committed to his view that the newspaper model is irrevocably broken, and sees the days of giving content away for free as limited. The Wall Street Journal, acquired by News Corp in December 2007, successfully charges its business audience for online access. However, the group intends to try extending that approach to some of its general interest titles in the next 12 months, including The Times and The Sun in the UK.

On the day that Amazon launched a new large-screen device designed to replace paper and ink, it is clear that paid digital distribution is the future (even if Mr Murdoch has no intention of allowing Amazon to control the market). But pressing ahead while its competitors remain free may well become a very costly experiment. In the past six months, shares in News Corp have halved then re-doubled twice in succession. It is not yet clear that the worst of that rollercoaster ride is over.

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