News Corp's Chorus Of Complaint


News Corporation’s hierarchy have made a number of key speeches this year, and taking them together we can ascertain what they see as the most immediate threats to the company in a shifting media landscape.

John Hartigan’s speech in early July attacked bloggers at the National Press Club, claiming that their work was entirely dependent on mainstream news organisations, and that it lacked intellectual value. Last month, James Murdoch attacked the BBC at the Edinburgh Television Festival, claiming that they were capitalising on troubled times in the news business to further their chilling ambitions. And last week, in a major speech in China, Rupert Murdoch attacked "aggregators and plagiarists", which has been widely interpreted as an attack on Google and other services that abstract content from news providers.

Independent commentary on blogs, public broadcasters and search engines — the common denominator is that they offer free content (or access to it), as they are sustained respectively by enthusiasm, public funding and innovative advertising models that obviate the need to charge for a core service. What’s interesting is that together, and along with News Corp’s results, the speeches paint a picture of a company that is, after decades of global buccaneering, suddenly on the defensive.

It’s worth thinking about the audience in each case to precisely calibrate their various messages. Hartigan’s Press Club speech was in some respects a pep-talk for those working in the industry, not least those working for News Corporation. He was reinforcing the prejudices of a sizeable minority of journos regarding those interlopers in the blogosphere, and bolstering what we might call their professional ideology, which embodies the faith that theirs is a craft with special skills, and that amateur hacks on self-publishing platforms were no substitute for their own investigative capacities.

Predictably, Hartigan was roundly criticised in the blogosphere, though he was right to the extent that there is still a marked reliance on the reportage of the mainstream media in blogs, even if it is a negative one — mainstream journalism is often what political bloggers define themselves against in producing their meaning and identity.

But if Hartigan really thinks that political commentary on blogs is universally vacuous, he’s simply underestimating the problem his organisation faces. A cursory look at commentary in Australia’s political blogosphere would reveal a reservoir of analytical talent and expertise that any of his own papers would have trouble matching. I doubt that he’s so poorly advised. But apart from boosting the self-esteem of the troops, the headline message from this speech was that bloggers should prepare themselves for much more restricted access to the output of news organisations.

James Murdoch’s speech was nothing less than a declaration of war upon the BBC, and was mainly directed at what everyone presumes is an incoming Tory government in the United Kingdom. It might be difficult not to smirk at the News Corporation heir-apparent chipping the Beeb for its ambition, but it was really all about trying to hobble a credible, globally trusted competitor in online news, ahead of News’s own apparent plan to corral its services behind a paywall.

Young James is clearly hoping that the Tories will agree to circumscribe the BBC ‘s activities to the extent that commercial, paywalled news will be a more attractive proposition to consumers. This might be politically difficult, as the BBC is a valued institution for the British electorate, but it’s interesting to note that since the speech, News Corporation’s market-leading tabloid, the Sun, has definitively switched its support to the Conservatives. It could be that wheels are turning within wheels in Old Blighty.

Finally, Rupert, speaking in China, attacked "aggregators", and basically accused them of stealing content. That sentence or two of the speech have been widely reported, but it’s worth noting that the criticism was just part of a talk in which Murdoch lavishly praised China and its leadership, and asserted that it was central to the future of global media. Murdoch’s moralising criticisms of Google and other aggregators is entirely disingenuous in the light of current arrangements — as Margaret Simons points out, a simple line of code would deny Google access to News’s online news services. Yet News still allow all of them to be searched and even aggregated to Google News. But talking where he was, and with one eye on the future, knowing the keenness of the PRC leadership to control flows of information, and knowing too that China’s information policies will be more and more crucial to the shape of the global media market, it’s possible that Murdoch was spruiking a future where paradigm-shifting competitors like Google are restricted in their operations in China.

It wasn’t so long ago that Murdoch himself was the great paradigm-shifter, although it must be said he only ever did this in a context of mass media, and that his business was largely built on paid content. In Australia he launched the first, and currently only national newspaper, and also innovated at the tabloid end of the market. The biggest, boldest moves were perhaps the international ones — the revolution in printing and distribution that came with the move to Wapping in the UK in the mid-1980s; his move into pay television in the same country; his creation of a fourth free-to-air commercial television network in the USA.

His adventures always had a cultural dimension: the Sun and the News of the World determinedly took on British habits of deference; Fox News established its openly partisan current affairs coverage as both niche market and cultural force; here he almost broke rugby league in buying it, and state governments have been very responsive to the agenda of his tabloid papers, which are market leaders in every capital except Perth.

But however swashbuckling Murdoch’s past, he was only able to pay high prices for assets, wait out the competition and get himself out of bother because of the givens: the business of packaging content for a mass audience. Murdoch’s narrative has been about catering to a broad popular audience, who could be delivered to advertisers, and which he and his lieutenants saw themselves as instinctively understanding. The model depended on a mass-mediated model of business and political communication: News would make the content, the audience would buy it or watch it, and political favours would flow to him because of the access he controlled.

The erosion of that mass model is arguably what led to the biggest, most complex mistake News made — and the one which has put them on the back foot — the purchase of MySpace. Murdoch came late to the internet, bought MySpace at the moment where its value peaked, and has been left holding what looks like an awful lot like a legacy service. Not only is MySpace not making money, it’s costing them, at least in the sense that their books have been adjusted to reflect the fact that they paid too much.

But the problem is not just the manifest drag this depreciating asset exerts on the balance sheet. It seems clear from these recent pronouncements that the failure of the business has been such a shock that News Corp’s elite has lost confidence in their capacity to adapt to changing circumstances. Clearly management feels itself to be, for the first time, on the wrong end of technological change. News are now using their influence to try to effect a circling of the wagons, and attempting to introduce an offline model to online pricing. As I’ve pointed out, this may work, but it does seem to entail a smaller business than the one they have now.

That’s not to say that it’s a zero-sum game. The evangelists and technological determinists talking about the end of newspapers badly need to engage with some media history. The oblivion of various media has been regularly predicted, and rarely happens. The whole direction of audience fragmentation and multi-channeling does not suggest a move, en masse, from newspapers to blogs (or whatever), but more media outlets with more readers who have more diverse patterns of media engagement and consumption. Also, this fight is just beginning, and News Corporation should not be underestimated.

That said, the great innovators suddenly seem to be attempting to cling to the past. The next few years will be crucial, and fascinating.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.