News Corp. Targets Aussie Broadcasting

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Sydney -- News Ltd., the Australian arm of Rupert
Murdoch's News Corp., has created a local unit to spearhead a new
digital-broadcasting business and, possibly, to bid for the country's fourth
commercial-television license, which may become available in 2005.

News Broadcasting Australia, the new unit, was formed
"in response to the new and exciting era of broadcasting, digital TV and
datacasting," News Ltd. executive chairman Lachlan Murdoch said. "News
Broadcasting aims to bring the full benefit of rapidly advancing broadcasting services to
Australian homes as soon as possible."

However, Foxtel -- the cable-TV joint venture between News
Ltd., Australian telco Telstra Corp. and Kerry Packer's Publishing and Broadcasting
Ltd. -- will not fall under News Broadcasting's mandate.

News Broadcasting will be headed by Jim Blomfield, former
Foxtel technology and broadcast director and current SkyPerfect TV Japan CEO. SkyPerfect
TV, a Japanese direct-to-home platform, is part-owned by News Corp.

The biggest gap in the News Ltd. stable in Australia is
ownership of a free-to-air TV network, which could give it a piece of the $A2 billion
($US1.28 billion) broadcast-advertising-revenue pie currently controlled by the
country's three terrestrial networks -- Seven Network, Nine Network and Network Ten.

News Ltd. is prevented from owning a commercial-TV license
here because it owns some of the country's major newspapers.

However, Blomfield and other News Ltd. execs have already
begun to lobby the federal government to loosen the media cross-ownership laws, which
would enable News Broadcasting to eventually become a broadcast player.

The Australian government earlier this year put a
moratorium on the licensing of any new commercial broadcasters until 2008, although an
inquiry that could advance the timetable will be conducted in 2005. The existing
broadcasters argued for the moratorium to protect them from added competition while they
invest an estimated $A1 billion ($US640 million) in converting to digital.

Blomfield said News Broadcasting is a vehicle to bid for
the fourth commercial-TV license. In addition, it will put a special emphasis on digital
broadcasting and datacasting.

"We will harness the content that we have, and find
new content for new digital products and services delivered over a variety of
systems," he said, noting that News Broadcasting is preparing to take advantage of
opportunities for digital-terrestrial delivery "when it arrives." Digital
broadcasting is scheduled to be introduced in Australia in 2001.

"Australian broadcasting has a habit of standing
still. It has been slow to embrace change and to offer the public greater choice. News
Broadcasting Australia intends to change that," Blomfield said.

News Ltd. owns the television rights to key sports, movies
and other events, and it could leverage them into a variety of services to be delivered to
homes by cable, satellite and digital-terrestrial television. Its news outlets, including
newspapers and Web sites, could provide further artillery.

"News' experience at the forefront of digital
broadcasting and content development around the world puts it in a unique position to be a
driving force in giving the public the competitive choice of programming to which they are
entitled," Murdoch said.

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