James Murdoch cuts the mustard

Those who saw James Murdochs performance as guest speaker at the Marketing Group of Great Britain a couple of years ago were left in little doubt that they were watching a media tycoon in the making.

Those who saw James Murdoch’s performance as guest speaker at the Marketing Group of Great Britain a couple of years ago were left in little doubt that they were watching a media tycoon in the making.

For here was no dull scion of a distinguished father, polished by a Harvard business degree, but someone very much in his element tackling difficult questions from the floor; and doing so in a way that demonstrated a remarkable and challenging mastery of the facts.

But promise is one thing, fulfilment of it quite another. It is only in the past few weeks that we have seen the “real” Murdoch emerge from his chrysalis and demonstrate just what sort of media baron he is likely to be. A series of events – two major speeches, a daring share raid and even the resolution of a convoluted advertising pitch all shed light on his style of action.

Playing Solomon

Let’s start with the apparently least important, the pitch for the £75m BSkyB advertising account, which is now making its way from WPP to WCRS. In many companies, the chief executive would have had only a passing interest in the destination of such an account. Not so here, where the personal rapport between WPP chief executive Sir Martin Sorrell and Murdoch senior, as well as junior, is well established. The temptation might well have been to leave the account where it was, using the face-saving formula of “Team Sky” in place of United. Except that James Murdoch was put in a difficult position by his marketing team, particularly Charles Ponsonby, telling him that WCRS had by far the better strategic vision. The result was a rigorous pitch in which he was able to play Solomon, finally coming down on the side of his marketing team.

Meanwhile, in rather less compromising fashion, Murdoch has been setting out his personal vision of the changing media scene in two landmark speeches. The first, at Engage, conjured up a bipolar world of niche and mass television channels in which the middle-ranging brands, like ITV2, Bravo and indeed his own Sky 3, would be condemned to “a soggy no-man?s land”, which provided neither the breadth nor depth to satisfy advertisers. The speech gave Murdoch ample opportunity to explore Sky’s proprietary solution to this dilemma. Why worry too much about fragmenting audiences when – just round the corner – Sky Plus boxes hold out the promise of “smart” personalised advertising? Many media commentators find this an attractive strategy, though they point out the technology is far from proven.

Media mogul

However, the full meaning of the speech only became apparent later that week, when the other shoe dropped. BSkyB dramatically announced that it had snatched nearly18% of ITV, the heartland of that mass television audience which Murdoch had enigmatically identified as a strategic necessity earlier.

While no one outside News Corp knows what the ultimate purpose of the stake may be, everyone (or almost everyone) agrees it is a clever tactical move that keeps potential competitors like Branson from securing an easy prize. Collaboration (for example in the broadband and personalised advertising areas) or conflict (the opportunity for a bit of destructive greenmail) are both longer-term possibilities.

Socio-economic critique

It may seem the old man?s fingerprints are all over the ITV adventure, but James Murdoch is making it very much his own. This week it formed the unspoken nucleus of a speech on regulation which he delivered at an Ofcom conference. The not-very-coded message was that the regulator should lay off any politically motivated investigation into the BSkyB stake.

But much more interesting than that, it was an occasion to set out the Murdoch vision of the media landscape. There was an almost Marxist hue in his critique of “the dead hand of history” and its role in broadcasting regulation, going back to the class-elitism of Lord Reith. Often, down the decades, this elitism had disguised itself as a “concern for standards”, but “since the 1990s, the consumer – not the powers that be – has increasingly and decisively taken charge.” And Sky has been in the vanguard of this consumer crusade.

Like father, like son: the old anti-establishment paranoia endures. Or is it paranoia?


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