April 30 (Bloomberg) -- The Internet may cannibalize the television industry by drawing away viewers and advertisers, News Corp. President Peter Chernin said.

“I think there’s a chance the Internet may cannibalize us,” Chernin, 57, said yesterday at the Milken Institute Global Conference in Beverly Hills, California. “People don’t want to watch reruns on TV.” Traditional media companies have an opportunity to attract quality advertisers to the Web, said Chernin, who steps down in June.

U.S. television networks meet with their largest advertisers in May to seek commitments ahead of the new season starting in September. Broadcast networks may receive about $7.4 billion in advertising this year, 15 percent less than 2008, Anthony DiClemente, an analyst at Barclays Capital, estimated in an April 23 report. He expects total broadcast TV ad spending to drop 19 percent this year to $35.4 billion.

TV networks and station-owners face a steep drop in advertising as U.S. automakers, the biggest source of sales, slash marketing budgets. In February, News Corp. Chairman Rupert Murdoch forecast a 30 percent decline in local TV advertising in the second half of the company’s fiscal year ending in June.

News Corp. rose 37 cents to $8.52 at 10:11 a.m. New York time in Nasdaq Stock Market trading. Before today, the Class A shares had declined 10 percent this year.

Media companies are offering clips of TV shows and films, as well as complete versions of older programs and movies on the Internet as advertisers and viewers migrate online. Sony Corp.’s Crackle.com will provide 100 movies from the company’s film studio as well as TV shows and original productions.

Hulu and YouTube

Hulu.com, partly owned by News Corp. and General Electric Co.’s NBC Universal, climbed a spot in March to become the third most-watched Internet video site by providing prime-time TV shows from Fox and NBC.

Jason Kilar, Hulu’s chief executive officer, said at an April 22 conference in San Francisco that the site plans to add more content this year than in 2008.

Google Inc.’s Youtube.com, the most-watched Internet video site, is adding clips of programs from Disney’s ABC and ESPN sports cable channel as well as films from Sony Corp. to attract more viewers.

Both Hulu and YouTube are in talks with the four biggest record labels to add music videos, people familiar with the discussions told Bloomberg last week.

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

Last Updated: April 30, 2009 10:20 EDT