Summary:

For investors wondering if there are still any opportunities in media, former News Corp (NYSE: NWS). COO Peter Chernin has some advice: focu…

Peter Chernin at USC

For investors wondering if there are still any opportunities in media, former News Corp (NYSE: NWS). COO Peter Chernin has some advice: focus on digital and look to developing countries. In a panel discussion with Gordon Crawford, managing director of The Capital Group Companies, at the USC Annenberg School for Communication, Cherin also offered a warning — not that most investors needed it. “You stay out of the U.S., you stay out of western Europe, and you stay out of broadcast, newspapers and traditional media.”

China’s media industry, despite being less affected by the global recession than the West, is no oasis, he said. Offsetting the attractive growth opportunities are massive barriers to entry. “You can pretend to do a lot of things in China, but you can’t really make money there.” He prefers other Asian countries, such as India, Indonesia and the Philippines for doing business. (Webcast of the conversation is available here but slow to load.)

Crawford, who is a large investor in Yahoo (NSDQ: YHOO), agreed. “Where I have to own U.S. companies, I like ones that have large revenues outside of the U.S. There’s no question that in the next 25 years — pick a number — 75 percent of the incremental growth of the global GDP is going to come from emerging markets,” he said. “That’s where the people are, that’s where the unmet needs are, that’s where the flow of capital is going. And they’re not over-leveraged.”

Since they were speaking to a roomful of budding U.S. journalists, Crawford turned to the business of newspapers and the effect on reporting. Crawford apologized for his “dour outlook” and tried to muster a bit of cheerleading, but ultimately his tone was downbeat. He spoke about the importance of journalism as an essential public good, but right now, he mostly sees a media landscape pockmarked with hyperbolic pundits and frenzied bloggers. “I despair sometimes when I watch Fox News” — he pauses to poke Chernin, who adds, “So do I!” — “and MSNBC and I see people yelling at each other and talking over each other. They’ve become entertainers and not real journalists.”

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