News says Australian online subs at 50k; Fairfax ‘will not close Age and SMH’

News Corp told investors at a briefing in Sydney last week that the company was optimistic its newspapers would have a solid future following the upcoming restructure.

The global giant will split in two on 28 June: News Corporation will retain all the Australian media assets, including News Limited, as well as international mastheads such as The Times and The Wall Street Journal and publisher HarperCollins. The rest of the assets will be held by 21st Century Fox.

Despite his optimism, News Corp chief executive Robert Thomson conceded there were "challenges facing some of our newspapers", reported the Australian.

"The advertising market has been volatile and print sales have certainly declined in Australia. We are in the midst of a transformation in those businesses. Costs are being confronted and the mastheads are being reoriented," he said.

"But we are also candidly and decidedly optimistic about the medium-term prospects of the company, in revenue growth and in margin expansions. And we have a very strong balance sheet that will be a very strong cornerstone in future investment."

[Related: Murdoch predicts newspapers' demise]

News Ltd chief executive Kim Williams told investors that the Australian's paywall business had been "growing strongly quarter on quarter". He said the newspaper now had 50,000 digital subscribers compared with 120,000 weekday print subscribers.

He also said News Ltd was well placed to capitalise on the growth of smartphones because "we have the biggest mobile news network here in Australia".

Meanwhile, Fairfax Media chief executive Greg Hywood told investors at a separate Sydney briefing last week that the company's cost-cutting drive posed no threat to the future of mastheads like the Sydney Morning Herald and the Age.

"You’ve heard me say before that Fairfax will never be about using the profits of good businesses to cross-subsidise poor performing assets. We have been very clear that we will not produce unprofitable newspapers – and we stand by that," he said.

"However – before speculation runs rampant – let me make one thing clear. We do not have any intention to reduce the frequency of print publication of any of our major mastheads in the foreseeable future. Why? Because they are profitable."

Australian Publishing Media boss Allen Williams said Fairfax had run a successful test of its paywall in March ahead of the official launch on 2 July.

Digital-only subscriptions start at $15 per month; the full digital and print package is $44.

[Related: More news about newspapers]

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