Will the last unindicted Sun journalist please turn out the lights?

February 11, 2012

A News International spokesman tells us Sun editor Dominic Mohan is “not resigning” in the wake of 5 more high-profile arrests of his senior colleagues.

Well, thank goodness for that. Someone has to be there to switch off the lights, and there now seem precious few editorial staff of any standing who aren’t on bail, or facing the threat of arrest.

The climate of fear at The Sun is, it would seem, being deliberately intensified by the police, in the hope of breaking NI’s culture of omerta and persuading more witnesses to squeal on each other. What other interpretation can be placed on police commander Sue Akers’ decision to organise the two waves of arrests, a week apart, as high-drama “dawn raids”, timed to coincide with Sunday newspaper interest? Whatever these men may or may not have done, they are not gun-runners, drug-traffickers or international terrorists. So why the heavy-handed police choreography, if not to a) impress the public that the police are at last getting tough on corruption and to b) create maximum distress among the people at NI?

As the web of alleged corruption spreads to more police officers, the army and the ministry of defence, it has emerged that Rupert Murdoch will be making a special pilgrimage to The Sun offices to personally reassure its staff he will not be doing unto them what he earlier did to their colleagues at the News of the World.

Maybe not, for now. But one thing I suspect we won’t be hearing much of from here on is Son of NoW, the Sun on Sunday. The Sun is a broken brand.

The latest wave of arrests will also put pressure on other parts of The Sun’s ultimate owner, News Corp. It could turn the screw on a Federal investigation into alleged racketeering. And, nearer home, it will surely rekindle calls for an investigation into News Corp being a fit and proper holder of a TV licence. Should BSkyB’s share price be seriously depressed as a result, you can be sure that – for all their stalwart support of James Murdoch up to now – the board will have no compunction in firing him as chairman.

UPDATE 18/2/12: First, some humble pie. “One thing we won’t be hearing much of from here on is the Son of NoW, the Sun on Sunday”. Er, no. Rupert Murdoch has just given his personal assurance that the launch will go ahead “very soon”. Industry experts believe this means some time in April, possibly the 29th.

However, what may play well with demoralised Sun staffers is not guaranteed to be a publishing success. Particularly if more distracting scandal damages the Sun brand in the meantime. And who, given the unbridled brief of the MSC to cleanse the Augean Stables at News International, can say it will not?

Labour MP Chris Bryant, who has been leading the anti-hacking campaign in parliament, neatly expresses the commercial paradoxof an SoS launch: ”He (Murdoch) is meant still to be ‘draining the swamp’ and yet the swamp is meant to produce another newspaper.”

As it happens, Murdoch seems to have lost his sureness of touch in the realm of newspaper launches. His foray into the London freesheet market, with thelondonpaper, certainly did financial damage to Associated Newspapers, owner of London Lite and (at that time) the paid-for Evening Standard. But News International lost heavily on the project and eventually had to close it down.

The SoS will be launching into a rapidly declining market. Ad revenue was down over 17% last year (end of January) and – even stripping out the now-folded News of the World – the underlying slide was 11%. Readers are deserting too. And their contribution, in the form of circulation revenue, is even more vital to mass-market tabloids than advertising. The only way in, it would seem, is a price-war. That may well damage the SoS’ prime adversary, the Sunday Mirror. But whether it will create a financially viable Sun on Sunday is a moot point.

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Will Rupert Murdoch really jettison James as NewsCorp’s heir?

October 19, 2011

It’s possible that Rupert Murdoch allowed himself the ghost of a smile on hearing that Michael Wolff – one of his most vociferous and tiresome tormentors – had been defenestrated from his fastness at AdWeek.

We might like to think of AdWeek as a trade magazine covering the US advertising, media and marketing scene. But for the past year it has been hijacked by Wolff’s anti-Murdoch agenda and shamelessly exploited by the former editorial director as a scandal-sheet covering every last detail of the so-called “Murdochcalypse”.

Murdoch will have been a good deal less pleased by what he read in the New York Times yesterday. Wolff is a gadfly, but the NYT is a seriously influential enemy which has taken it upon itself to drive a wedge between Murdoch and his presumed heir, younger son James.

It is not so much the content of the article as its timing that is so troubling. Murdoch and his brood are just days away from NewCorp’s annual general meeting that could theoretically see them unseated as directors. The last thing they need is another stinkbomb.

As it happens, the NYT article fails to come up with anything stunningly original. Provocatively titled ‘In Rift Between Murdochs, Heir Becomes Less Apparent‘ , it dwells on tensions – real and possibly imagined – between the two men in the hope of creating so much further bad blood that Murdoch père will eventually perform an Abrahamic sacrifice of his son’s career prospects in order to save his own skin.

Certainly Murdoch senior has been performing a skilful dance of the seven veils to protect his reputation. First he closed News of the World, and abandoned his cherished bid for BSkyB.  When that didn’t work, he sacrificed his faithful retainers Les Hinton and Rebekah Brooks. The tide of effluent still failing to ebb, he contributed millions, individually and corporately, to the Milly Dowler Fund.

For a while, the NewsCorp share price appeared to bounce back. Then came the hammer blow: a major shareholders’ revolt, partly sustained by new evidence of malpractice in the NewsCorp empire, this time at The Wall Street Journal.

Something like 25% of investors are expected to vote against the re-election of the Murdoch board on Friday. In almost any other public company that would mean curtains. But not at NewsCorp, where – unluckily for the institutional rebels – nearly 40% of the voting shares are owned by the Murdoch family.

So not much is really going to happen in the short term. Except some searing humiliation, fanned by the NYT. The worse it is, the poorer James Murdoch’s chances of eventual survival.

And that’s before his return for further grilling by the House of Commons media select committee, over the porkie pies and half-truths uttered during his last appearance.

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AdWeek’s Michael Wolff on the Murdochs, an everyday tale of Mafia folk

August 9, 2011

Reading AdWeek these days, I’m irresistibly reminded of Spike Milligan’s old bestseller: “Adolf Hitler: My Part in his Downfall.”

It’s not Spike’s obvious irony I’m talking about here, either. Michael Wolff, a talented enfant terrible now editing the venerable US trade magazine, is deadly earnest in trying to slay single-handedly the apotheosis of all evil. Only, for Hitler and the Third Reich read instead Rupert Murdoch and his Evil Empire.

Media don Rupert Murdoch

“Pugnacious”, “relentless” and “fearless” are words often found in close proximity to “Wolff” on the printed page. His anti-Murdoch crusade does not disappoint in any of these respects.

Wolff established his credentials as chief Murdoch-baiter with a biography which, when it came out over 2 years ago, had the satisfying effect of all but sending the usually unflappable old boy into a fit of apoplexy.

Since then, every twist and turn of what Wolff likes to call the Murdocalypse (that is, the phone-hacking scandal and its aftermath) has been chronicled with gleeful and sardonic attention to detail on the pages and website of AdWeek.

Here’s the man in action, just after the Murdochs, père et fils cadet, had made their woeful appearance before our parliamentary select committee a couple of weeks ago….

James in prison in just a few days time, and the old boy himself safely behind bars by the end of next year – doesn’t pull his punches, does he? Of course, it’s nothing personal, he just hates the bastard and all he stands for. In the land of Fox News, Rush Limbaugh and Tea Party partisanship, what could be fairer than that?

I mention all this in the light of Wolff’s pièce de résistance on the Murdochs, out this week, in which the family is convincingly portrayed as a mafia clan. No idle parody this – Wolff creates some compelling parallels. Here’s a short extract that gives the flavour:

Both the New York Post and Fox News maintain enemy lists. Almost anyone who has directly crossed these organizations, or who has made trouble for their parent company, will have felt the sting here. That sting involves regular taunting and, often, lies—Obama is a Muslim. (Or, if not outright lies, radical remakes of reality.) Threats pervade the company’s basic view of the world. “We have stuff on him,” Murdoch would mutter about various individuals who I mentioned during my interviews with him. “We have pictures.”

Vito Corleone to a T. And who’s the urbane young fellah with him? Michael? er, James?

What all this may be doing for AdWeek readership I’m not sure. Wolff, whose father was an adman, has a seigneurial disdain for the dull, grubby detail of everyday adland which, if not exactly ignored, is relegated to the nether reaches of the site map. He seems intent upon recasting AdWeek as Vanity Fair, with only a nod to the business readership which has, in some measure at least, loyally supported the title these past 33 years.

Adweek’s current publisher, Prometheus Global Media, appears to be 100% behind Wolff’s mission to expunge “robotic trade journalism” from the title in the cause of creating broader readership.

Which is just as well, because the danger is the title will lose all relevance outside those interested in Wolff and Wolff’s chosen hobby-horses.

Personally, I hope Prometheus has very deep pockets. Long may it subsidise Wolff’s zealous mission to excoriate, educate and entertain. But I rather imagine the commercial department is tearing its hair out as it watches the last vestiges of market share trickle over to humdrum old AdAge.

Coming shortly: The Borgias – A modern-day makeover, with Lis as Lucrezia.

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Wizard of Oz loses his magical powers

July 19, 2011

True, there were some neat forensic jabs from Tom Watson and Louise Mensch MPs, and a beautifully executed left hook from Wendi Murdoch. In the end, though, we were little wiser about why James Murdoch signed a £700,000 cheque to silence Graham Taylor without quizzing his lawyers over the price being so unfeasibly high. Which is surely the unanswered question on which Murdoch Jr’s career hangs.

Yet that’s not to say we learned nothing of importance in today’s culture, media and sport select committee hearing. On the contrary, the theatre of the occasion spoke volumes. It was rich in symbolism; a microcosm of the scandal that threatens to pull down NewsCorp.

First, there was Plod, ineptly struggling to protect Rupert Murdoch from harm’s way. Although this time it was from the smear of a white substance hurled by a protester, rather than any allegations of corporate malpractice.

And then there was the Wizard of Oz himself, spooning the egg-white (or something very like it) off his face – a crumpled paper bag of a man diminished, like his fictional counterpart at the end of the Yellow Brick Road, by having the veil of mystique unceremoniously ripped from his self-created smoke-and-mirrors illusion.

As Watson pointed out, it was what Murdoch père didn’t know, rather than what he did, which should most concern us. Gone for ever was that image of the all-powerful micro-manager who used to roll up his sleeves and appear unannounced on the floor of the Sun, confounding the staff with his mastery of encyclopedic detail.

What we saw instead was a patriarch verging on senility, propped up by his family and wife (what an oriental tiger she is); and held prisoner in his ignorance by deceitful footmen. His answers were halting in delivery and lame in content. As he himself admitted, he’s got no one but himself to blame: “No one kept me in the dark. I have been lax in not asking the right questions.” Quite – especially of Les Hinton, Jon Chapman and Tom Crone.

Maybe this image was deliberately fashioned, or at least hammed up, to give his son James a better stage part. If so, it was a sorely misconceived idea. Institutional investors in NewsCorp watching the proceedings (as they surely will have been) can have drawn only one conclusion. They have a choice between an old man who is clearly out of touch, and a young one who can’t be trusted. Perhaps they’re better off without either. Perhaps that’s what they are already thinking…

My penny’s worth? Fast-track Lis Murdoch. She is the family’s last chance.

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Bad news for Rebekah Brooks, but good news for BSkyB’s Jeremy Darroch

July 6, 2011

Jeremy Darroch, chief executive of BSkyB, now looks in an even more powerful position to inherit the News International mantle of power (should he wish to) than when I flagged up his significance to the Murdoch empire in my last Marketing Week column.

Rebekah Brooks, NI’s current chief executive, is terminally damaged goods, in the wake of ‘Millygate’. Not to mention ‘Jessica-and-Hollygate’ and ’7/7-gate’.

For the moment, of course, it’s Andy Coulson, ex-News of the World editor and David Cameron’s former director of communications, who has been thrown to the lions. Thanks to some NI emails which have mysteriously surfaced just in time, Coulson is now a proven liar. He procured, or authorised procurement of, paid information from the police while he was News of the World editor – something he has previously strenuously denied. And for good reason: it is quite illegal.

It’s an astute, if cynical, sacrifice, and proves the Murdochs are still thinking on their feet. Coulson’s disgrace tarnishes both Cameron (by association – after all, he picked Coulson, despite his dodgy reputation, and then backed him to the hilt in his hour of need) and Knacker of the Yard (assistant commissioner John Yates, once the officer in charge of investigating the phone-hacking scandal at the epicentre of the Murdoch crisis, who is now looking woefully ‘under-informed’ and incompetent, after previously vociferously denying the merest scintilla of police complicity in the matter).

Even so the Coulson gambit is, at best, a delaying tactic. It will make our leading politicians and policemen tread a little more carefully, but it will not prevent them from taking decisive action. Public opinion is now too inflamed for them to do anything else.

Inescapably, the smoking gun is pointing at Brooks, née Wade, and editor of News of the World when – it now emerges – NI’s private investigator of choice Glen Mulcaire was hacking into the phones of Milly Dowler’s distressed relatives. She says she knows nothing about it. Do we believe her, any more than we believed Coulson’s protestations of ignorance? I’ll leave that one hanging in the air.

Ordinarily, implicated NI and former NI executives have been able to take refuge in prevarication, in the sure and certain knowledge that rapidly abating public interest will soon allow them to emerge from their burrows relatively unscathed. This crisis is different.

It has an unprecedented commercial dimension to it. Top advertisers, led by Ford, are boycotting News of the World, and that really will hit the Murdochs where it hurts. Ford is the single biggest advertiser, contributing about £4.5m annually to NoW’s £40m display advertising revenue. Halifax (owned by Lloyds Banking Group) has now joined Ford. Other major advertisers believed to be considering their options are T-Mobile/Orange, Vodafone and nPower. The danger, from the Murdochs’ point of view, is that this commercial contagion spreads to other NI newspapers, such as the Sun – which Brooks also edited. It could easily do so, given a swelling social media campaign goading consumers to boycott advertisers who refuse to align themselves behind Ford. (There’s a useful live update on the brands boycott at Marketing Week.)

All of which may well rapidly result in Brooks becoming surplus to NI requirements.

OK, you say, but what has this got to do with Jeremy Darroch? I’m coming to that. Whatever the backwash from the phone-hacking scandal, it will not prevent culture secretary Jeremy Hunt from giving his blessing to Murdoch-vehicle NewsCorp’s acquisition of the 61% of BSkyB it does not already own. Legally, a challenge to that assent is now well-nigh impossible. Indeed, Hunt and the Government would probably be on the receiving end of a writ it they were obstructive.

Let’s assume for a moment that the deal is done, that the Murdochs have pacified BSkyB shareholders with an eye-watering amount of money and are now the proud possessors of the rest of the organisation. What are the repercussions for NewsCorp and in particular its UK-centric arm, NI, in the wake of a full takeover?

BSkyB is one of the UK’s most powerful companies with, just to give the flavour, a marketing communications budget of £1.2bn a year. It is phenomenally cash rich. One estimate reckons that, once acquired, it would contribute 30% of NewsCorp’s cashflow. Like the Murdochs’ newspapers, it is UK-centric. Unlike the newspapers, it is highly profitable. Unlike the newspapers again, it is still a dynamic growth business, which has made good use of product innovation.

In short, it would be the jewel in NI’s crown. Who better to manage that jewel in the new, enlarged organisation – a man of untarnished reputation who intimately understands subscription TV; or Brooks, with her yesterday’s tabloids background?

Of course, I have no idea whether Darroch would actually be interested in such a proposition. He may well take his money and run. But it’s worth thinking about, isn’t it?

UPDATE 17.30 – 7/7/11: So, The News of the World is no more. The Sunday edition, shorn of advertising, will be the last in the newspaper’s 168-year history. Nothing could more graphically illustrate the gravity of the crisis engulfing NewsCorp than that its chairman and chief executive Rupert Murdoch should take the drastic step of closing his most profitable newspaper and the one – to boot – he started out with back in 1969. The suspicion lingers that a skeleton NoW staff will be retained to flesh out a 7-day version of The Sun. “The Sun on Sunday” has long been rumoured as a cost-cutting project. How typical of Murdoch that he should turn a disaster into a publishing opportunity.

UPDATE 7/7/11: Determination not to be the last advertiser at the News of the World has now reached frenzied proportions, as Vauxhall, Virgin Holidays, O2 (£1m), Boots (£800,000) and  Sainsbury’s stampede to the exit with Ford, nPower and Lloyds Banking Group. Morrisons next, I suspect. Will anyone be buying the paper anyway? Newsagents expect a boycott on Sunday.

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Shining example – Elisabeth Murdoch sets up a mirror to James

February 22, 2011

In Outcasts, a Shine Television production currently airing on BBC1, the mysterious comeback-kid Julius Berger has managed to weasel his way onto the governing board of the Carpathian colony, armed with a silver tongue and a bulging power agenda. What will he do next – overthrow president Tate?

It’s hard to believe that James Murdoch isn’t – like Carpathia’s president – feeling the teensiest bit paranoid. Having his sister Elisabeth back on board (literally) after a decade’s absence from News Corporation is a mixed blessing.

On the one hand, the £415m acquisition of Shine makes News Corporation that much more a creative content and entertainment company, and that bit less a TV platform with a legacy newspaper business tied in. Then again, Liz is clearly an asset. She has won her spurs as a talented entrepreneur and manager during her near 11 years of independence from NewsCorp. Even if £415m is a tad generous (but hey, what’s wrong with a bit of nepotism if you can afford it?), no one seriously doubts that Shine is a good business, operating in the right place. How different her standing from the year 2000 when she quit as managing director of Sky Networks, apparently in mounting frustration over her father’s reluctance to give her full executive responsibility for BSkyB.

On the other, that’s just the problem for James. As someone with credible executive experience gained outside the family business, she must now pose a subtle threat to his role as heir presumptive to the Murdoch empire. Not an overt threat, of course. Merely a reminder that Rupert Murdoch, now nearing 80, has other options when it comes to handing over the reins of power.

Significantly Liz, 42, will not report to younger bro James, 38, but to Chase Carey, NewsCorp’ US-based deputy chairman, even though her business is centred in London.

Every time James makes a club-footed move from now on, it will be contrasted (fairly or not) with the more circumspect and reserved behaviour of his sister. And James has made a few club-footed moves, hasn’t he? The dawn raid on ITV shares, so audacious at the time, now looks less well-conceived. Then there was that intemperate raid of another kind – on the offices of The Independent’s editor-in-chief Simon Kelner, driven by blind but misguided rage. And finally, we have the ongoing News of the World bugging scandal, in which James’ handling of the situation has been called into question.

I mention this because the issue of James’ character and leadership qualities has just been raised (at some length) by an authority more eminent, and certainly more informed, than me: Tim Arango in The New York Times. Arango concludes: “James Murdoch is trying to succeed at the company his father built, but he is a very different character: more blunt, more bureaucratic and less able to smooth ruffled feathers. He has his father’s aggressiveness but not his tactical sense or temperance.” Just in passing, I suggest that his sister, though arguably less aggressive, is also less blunt, less bureaucratic and a lot more able to smooth ruffled feathers. I’m not sure about her “tactical sense”, but more so about her “temperance”.

All this would matter less if James’ leadership qualities were not about to undergo their supreme test. If the current chief executive of  NewsCorp Europe and Asia can shepherd the other 61% of BSkyB’s equity into NewsCorp’s stable, his future looks assured. He will then be in charge of roughly half the media empire’s revenues.

But what if he doesn’t? Suppose, for example, that the takeover is referred to the Competition Commission after all, and that Murdoch père decides the matter is no longer worth pursuing. How would that leave James’s leadership credentials looking? Impaired to say the least.

Which leads me to one last thing. The timing of the Shine deal seems very odd. Why was it concluded shortly before culture secretary Jeremy Hunt reached his decision on whether to invoke the CC, rather than afterwards? Having Shine – a considerable presence in British TV programme production – on board can only heighten anti-Murdoch paranoia, and put more pressure on Hunt to refer.

UPDATE 25/2/11: Silly me. Jeremy Hunt had already reached his decision, and it’s not to refer. That’s the gist of a report in today’s Financial Times. The FT suggests that Hunt and Rupert Murdoch have agreed to remove Sky News from a fully Murdoch-owned BSkyB, while at the same time guaranteeing its financial security. Strictly in the interest of ‘media plurality’, you understand. Mind you, the Murdochs still have to launch a successful takeover bid.

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Digby down, but never mind. ITV bonanza on the way – CRR is going too

January 13, 2011

Say what you like about him, veteran ITV sales director and professional rough diamond Gary Digby will be sorely missed.

One rival, reported in the FT recently, put it this way: “Media buyers will now see ITV as an easier place to do their negotiations and will expect to save millions.”

A back-handed compliment if ever there was one. Digby and the three senior members of his staff who also got the boot have been closely associated with ITV’s Lazarus-like commercial recovery last year. Conservatively, ITV made about £1.55bn from advertising revenue in 2010, an increase of over 15%.

Fru Hazlitt, the new ITV commercial director who did the booting, evidently sees root-and-branch restructuring of the sales department as a vital prerequisite to streamlining ITV’s analogue and digital offer. Which it may well be. But the media buying community has a different take on things: Kelly Williams (ex-Channel 5) and the rest of the Hazlitti imports are going to be a push-over by comparison with the Digby regime.

Personally, I wouldn’t like to speculate on how weak the ITV ratecard will be from now on. I make just one observation. If relief is ever needed in the ITV Alamo, then the cavalry is certainly on its way.

Yes, Jeremy Hunt – the newly empowered government media czar and part-time culture secretary – has unambiguously signalled that he intends to abolish Contract Rights Renewal – the advertiser-friendly sales corset that squeezes tens of millions of pounds off ITV’s revenue line every year. The only trouble (from ITV’s point of view) is that some waiting is involved before the relief arrives. Hunt intends to bundle repeal of the hated constraint into the Communications Bill which may, or may not, pass into law by the end of next year.

What Hunt’s motives are we can only guess. Some point to his ideological preference for laissez-faire capitalism. Others, more politically cynical, suspect that the CRR gesture may not be unconnected to Hunt’s invidious task of adjudicating the Murdochs’ controversial bid for the 61% of BSkyB they do not already own. After all, what could be more even-handed than to wave through both measures? Strictly in the interests of media plurality, you understand.

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James Murdoch’s faith in iPad ‘flagship products’ is misplaced

November 12, 2010

Here’s a sentence to savour. “Our flagship newspaper products are our iPad apps,” says James Murdoch, speaking at the Monaco Media Forum.

If that’s the case – I’m tempted to say – then we’re all in trouble; those of us in publishing at any rate. Certainly a recent study published by MediaVest, the global media buying outfit, doesn’t give room for much optimism. The 1500 people polled about their use of the iPad seemed to have a host of other preoccupations – such as reading books, managing personal calendars, watching video, accessing maps, listening to the radio – before they got round to reviewing a publication. Top of MediaVest’s Must Try Harder list were magazine publishers, but I suspect the news business was not all that far out front either.

In fairness, the survey was compiled back in July – practically a Pre-Cambrian era in terms of iPad experience; although that’s not exactly a reason for complacency. Have things moved on since then?

Murdoch Jnr clearly thinks they have. From what we now know of the Times/Sunday Times digital paywall experience, iPad users actually make up a fairly small proportion of the 105,000 paying online users: about 15,000 of them according to a Guardian analysis. Considering the newness of the Apple device and format (launched in April 2010), that’s not bad user penetration. But Murdoch’s point is a larger one.

The iPad app has certain similarities to a print product. Like a cover price, the access fee encourages people to pay for their content. Determining just how that payment should be made is a much more complex issue, and part of a broader online publishing strategy. But that’s less important for the Murdochs than the fact the iPad experience is helping them to surmount a huge psychological hurdle: the idea of parting people from their money for general news online.

Take this argument a little further, however, and we can see there is trouble ahead. The iPad news habit is attractive precisely because it so resembles the way we read a newspaper. It has a lean-back, browsing quality to it, wholly unlike the information-grubbing experience of assimilating information from a laptop or PC. As Murdoch himself says: “The problem with the apps is that they are much more directly cannibalistic of the print products than the website. People interact with them much more like they do with the traditional product.”

In other words, journalists and publishers beware – the news business is going to get a lot worse before it gets better. The iPad and its like may have the ability to supplant the “traditional product”, but – as I have pointed out before – the commercial terms under which media owners operate are not going to be nearly so favourable as they were in the print era. It is technology companies, like Apple and Google, who are the gatekeepers in this new era. They make the kit, devise or control the ad platform, license the apps and determine the profit margins.

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Laugh now, pay later if Murdoch gets his hands on the rest of BSkyB

November 2, 2010

At last, hard news from the impenetrable walled garden girdling The Times and Sunday Times these last four months. The Murdochs’s paywall strategy has harvested an astonishing 105,000 online subscribers – says News International, owner of the titles.

Well, not “subscribers” exactly, because that 105,000 includes quite a few birds of passage who have paid a couple of quid to visit the sites and then come no more. Lots of them, in fact. So the true number of subscribers? About 50,000 according to the Guardian – admittedly not the most objective of sources on the subject of paywall strategy, but probably near the truth on this occasion. Did I mention the iPad and Kindle subscribers? No, I thought not. They’re about 15,000 of this 50,000 figure. Which sounds heartening for Apple and Amazon, but less so for News International when you realise that they got an introductory two months of online access free.

I could go on, but I won’t. The figures are pretty meaningless in themselves, and muddied still further by the fact that there are another 100,000 print subscribers who receive the online version free. Even on the most optimistic viewing – that is to say 205,000 dedicated online visitors – the revenue would not amount to much by comparison with advertising lost after shutting down free access.

So what though? Never let it be said Rupert Murdoch bought The Times to make money – if he did, he’s been sadly disillusioned these past 30 years. In truth it has always been a loss leader in experimentation under his stewardship. First he tried dumbing it down, to take on The Telegraph. Now he is, perforce, reverting to a still loss-making but more elitist publication that happens to serve as an invaluable guinea pig in the post-print era.

Whatever the present cost of these lessons, it will be amply repaid should NewsCorp ever get its hands on the 61% of BSkyB it does not already own. BSkyB has total revenues of about £6bn a year; News International, the European subsidiary of NewsCorp, about £2.7bn. Forget enhanced earnings. The torrent of cash surging through the organisation alone would give the Murdochs all the flexibility they need  to experiment much more boldly with an online newspaper bundling programme for 10 million Sky subscribers. And the beauty of it would be that these self-same subscribers would have underwritten the experiment as well.

No wonder the competition are desperate to stop Murdoch’s bid in its tracks. In any forthcoming price war, he would be able to outspend the lot of them combined.

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Murdoch-bashing is the BBC’s best defence

October 8, 2010

Say what you like about BBC director-general Mark Thompson (and some do find him a bit antenna-challenged), he’s doughty in defence.

BBC's best defence?

Having got his hands on a big stick to club his bete noire and tormentor James Murdoch at this year’s MacTaggart Lecture, he’s now taken the media war to Murdoch Snr’s “home” terrain by  very publicly wading into the “Stop Murdoch getting Sky at any price” debate on America’s normally unremarkable public service television network (PBS). Thompson told the Charlie Rose programme that giving Murdoch what he wanted – the other 61% of BSkyB – would result in “a significant loss of plurality in our media market” and the “potential of an abuse of power.” In effect, it’s the old “Silvio Berlusconi” caricature – lovingly etched by Claire Enders – being given a new lease of life.

Whether a wholly-owned Murdoch Sky would really lead to an abuse of power I have no idea; beyond mentioning what people seem to conveniently forget in this debate – Murdoch’s imploding newspaper revenues. But the truth of the matter is less important than its plausible representation. And here – hats off – I must admire Thompson the tactician. Intelligently using the fewer resources at his disposal he has turned attack into the best form of defence. Like some latter-day Stonewall Jackson.

What Thompson has scented is a definitive change in the balance of UK media power which he is exploiting to the BBC’s advantage. It cannot have escaped notice that the regulatory authorities – prodded by the politicians – are spending an increasing amount of their time pursuing alleged abuses of BSkyB’s power – as instanced by investigations into its significant stake in ITV, and its control of premium sport and film content. What juicier opportunity to get politicians frothing at the mouth than pointing up the imminent prospect of Murdoch getting his hands on all of Sky’s £6bn revenues and £950m cashflow? Thompson nicely emphasised what’s at stake in his MacTaggart Lecture when he suggested Sky’s marketing budget alone dwarfs what ITV spends on its programmes. It now appears he has made common cause on the matter of Murdoch’s overweening power with some very odd bedfellows indeed: just about every other newspaper proprietor in the country.

And while the media and the politicians are diverted by the prospect of one long, uninterrupted, Murdoch-bashing fest, who’s going to be bothering with such pettifogging issues as bloated budgets, out-of-touch management, abuse of the internet media market and pension funds running amok at the BBC? Which should make for a fairly uninterrupted run-up to the next licence-fee negotiations.

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Posted by stuartsmithsblog

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