Murdoch Jrs new vision for News International

James Murdoch proved he could run a pay TV station during his three successful years in charge of BSkyB.

Now, seven months after taking the helm at News Corporation in Europe and Asia, he is aiming to show he is as great a newspaper man as his father Rupert.

The radical shake-up unveiled by 35-year-old Murdoch Jr at News International this week is an important step on his way to the top of News Corporation. Though taking over from his father as overall boss may not be his avowed aim, many believe it is his ultimate ambition.

But he comes to the newspaper industry as it faces sliding ad revenues and broadly declining circulations, notwithstanding an upward blip at The Sun this year.

Where Murdoch Jr proved the sceptics wrong at Sky by increasing subscriptions, offering free broadband and improving its rather robotic marketing, he is in for a tough ride in the rocky newspaper business.

This may be why the Harvard drop-out and former Hip Hop music maestro has prescribed such strong medicine at NI. Last week he reversed the company’s dalliance in magazines, closing down the division set up three years ago which has made serious losses. News is still awaited on the fate of the magazines and many of the staff.

This week’s shake-up aims to prepare Times Newspapers (The Times and The Sunday Times) and News Group Newspapers (The Sun and The News of the World) for a challenging future.

These papers are the emotional heartland of News Corp, the lump-in-the-throat offspring of old man Murdoch. James grew up arguing about newspaper headlines with his father over breakfast, and the decisions he takes now are more than simple business expediency. The Sun and The Times are priceless family heirlooms.

In an animated, exclusive interview with Marketing Week, James Murdoch grows intense as he presents a vision for the future of NI’s iconic newspaper brands. On a personal level, he is unexpectedly retiring and private. But when it comes to the future of these newspapers, he talks in stirring terms.

He is an evangelist for marketing, which will take a leading role in the revamped NI with the appointment of a group marketing director across the titles.

“News International is a world-leading manufacturing operation in print and a very strong multi-platform digital operation. We are looking at ways of marketing those services and putting marketing at the top table in the business and in the way we earn revenues,” he tells Marketing Week.

Murdoch’s restructure of NI smashes together the commercial operations of The Times and The Sunday Times with those of The Sun and NoW. He explains: “The existing structure we have of a managing director for Times News Limited and another for News Group Newspapers has gone. It is one company, not two.”

At the new-look NI, managing director Clive Milner becomes chief operating officer. Times Newspaper’s managing director Paul Hayes will lead a combined sales operation across the qualities and tabloids as managing director of commercial.

In another crucial appointment, tabloid boss Mike Anderson becomes the parent company’s managing director of digital and development. He takes charge of the vital area of digital platforms and also the enterprise business, which includes merchandise and joint ventures.

But Murdoch plays down the idea that the restructure is simply about eliminating costs.

“This is not first and foremost a cost-cutting exercise. It is about how we design an organisation so that it is as effective and accountable as possible, with a flatter, leaner structure,” he says.

“Over the past seven months, I’ve been hugely impressed by the company and the tremendous assets, people, brands and titles it has. We want to have an organisation that can go from that and change itself to be much more aligned to our customers, our readers and our advertisers, and have a ‘go-to-market’ strategy reflected in the design of the company.”

Some believe that the restructure has not come before time and that the Murdoch papers have lost ground on digital developments to rivals such as Telegraph Media Group and Daily Mail owner Associated Newspapers.

But Murdoch responds: “The real challenge is not how a business keeps up to date, but how you get a business that sets the pace and has an appetite for change at a deeper level. Great companies like changing and do it a lot. We want a business that is nimble and flexible enough to change quickly.”

Murdoch says the appointment of a group marketing director will not obviate the need for distinct marketing operations, led by Roland Agambar on the tabs and Katie Vanneck at the qualities.

“The group marketing director’s role will comprise the key marketing functions and how our major brands work. The job will include a customer insight function, sales and circulation.

“In sales we can do quite a lot across the piece on an NI level. Newspaper marketing needs to become much more data-driven and holistic.”

It may seem a tall order to look for marketing synergies between readers of The Times and those of The Sun. But Murdoch says: “When you look at The Sun, it is very hard to pigeon hole. It has a mass-market readership; it looks like Britain. There is an overlap there with Times Newspapers. We have an opportunity to increase the frequency of readership across the board.”

He adds: “We are looking for talent and ideas and a great person to fill that [marketing] role, someone who can bring a lot to the organisation and its development.

“In the structure we envisage, we still have dedicated marketers for the key brands. We need real champions and a different approach to different brands. There is no such thing as ‘one size fits all’.”

Meanwhile, he quashes speculation that free newspaper thelondonpaper will be closed. “There are no plans. There is nothing like that on the agenda,” he says.

One media executive says the restructure raises questions over the future of the sales teams and their managers Mark Chippendale, media director of News Group Newspapers, and Dominic Carter, Times Media’s trading director. The source also expects “a lot of redundancies” with the functions merging.

Murdoch says decisions have yet to be taken: “Anybody commenting on anything like that is ill-informed,” he swipes.

The source continues: “News International is a company that hasn’t made changes for a long, long time. It is very stuck in its ways, but times are changing. It’s going to be leaner and fitter for the world. Like it or not, we’re going to be in for a tough time over the next few years.”

Murdoch Jr has shown he can keep a 21st century TV brand buoyant when it started going off the boil. The coming years will show whether he is as skillful in forging a future for the fading pages of a newspaper industry which is just so last century. Anyone who earns a crust in this business will be praying he succeeds.