A very high-impact player.
Lest we forget, up until 1986 there were but three TV networks. when murdoch announced Fox's initial offering, the Joan Rivers Show," skeptics howled and called him insane. But with "The Simpsons," "The X-Files" and NFL footbar, the Fox network is surely a player now, nipping at the heels of the former "Big Three."
Fox now looks like its major rivals--save for the lack of a national news organization. But that is about to change. Murdoch told an audience in April that he has ordered Fox to build a news operation to compete with NBC, ABC and CBS.
Murdoch has hired Roger Ailes, formerly of CNBC and before that of the Reagan White House, to create not only a broadcast news operation but also a 24-hour-a-day cable network to rival CNN.
And Murdoch is willing to spend. In an unprecedented move, Fox is offering to pay cable operators $10 per subscriber to carry his new 24-hour news service, which debuts this fall.
Typically it is the other way around, with the local cable company taking a cut of the subscribers fee and sending it back to the programmer. Even for, start-ups of new networks the ante is closer to a $1 Per subrcriber.
But Murdoch is facing a stiff challenge. CNN is strong and soon will merge, the FTC willing, with the nation's second largest cable operator, Time Warner.
General Electric's NBC is set to launch its version of CNN, called MSNBC, in July, backed by the deep pockets of partner Microsoft.
Typically, Murdoch has assessed the competition and thinks Fox can do better. CNN is too "liberal," and moving "further and further to the left," Murdoch says. "I don't know whether it happened with my friend Ted marrying Jane Fonda or giving up lithium, but one thing or another, [CNN] has changed very greatly in the past couple of years." He bragged: "We'll provide objective news coverage."
The Fox news operation need not lack for ready funds if Murdoch is willing. According to Forbes, Murdoch is worth in excess of $3 billion; last year Murdoch's News, Inc. took in $9 billion in revenues. Murdoch still owns one-third of all the newspapers in Great Britain, nearly half the newspapers in Australia, TV Guide, the Harper-Collins book publishing house--a seemingly endless list.
But he wants more. So, despite what he calls "terrifying costs," Murdoch has also squarely cast his lot with high-definition television. He estimates that it will cost Fox $8 to $12 million per TV station to enter the high-definition digital era. But he believes that such technical change, which will provide a clearer picture on the screen and is necessary to remain competitive, is the proper defensive strategy to retain ownership of over-the-air TV stations well into the next century.
Conquering the world may be easier. Murdoch's Star TV satellite service claims to already reach 220 million Asians. The one billion in China are the next target.
But Murdoch does have problems. Last year he barely survived an FCC inquiry aimed at stripping him of his TV stations. Currently his satellite Sky channel is facing an investigation by Britain's Restrictive Practices Court because of "excessive" market power.
Short term profits are not what they might be, as Murdoch deals in the long run. News, Inc.'s latest financial report saw profits slide because of weak book sales, lower magazine advertising revenues and upfront costs for Star TV.
And he is mortal. At 65 it appears he has begun to think about a successor. This past February he named his twenty-something daughter, Elisabeth, to become the general manager of Sky TV, fueling speculation that she would take over when her father retires.
Few celebrate his achievements or recognize his limits. Former CBS executive Howard Stringer has called Murdoch the leader of a new Napoleonic era' of communications. Murdoch does not help when he tells reporters, "The only good regulator is a dead regulator."
This past February Murdoch began to redefine his miage by bemg the first to offer candidates free air time during prime time next fall. Thus, while former Washington Post reporter Paul Taylor, with support from such luminaries as Walter Cronkite and John Chancellor, had to spend two more months lobbying ABC, CBS and NBC to match Murdoch's offer, he already had taken the high road.
Rupert Murdoch has proven a most skilled player in the changing world of communications. And he has a clear vision for the future: His media empire, embracing all technologies and content forms, dominates mass media markets the world over.
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|Title Annotation:||The Economics of Television; Rupert Murdoch's effect on global communications|
|Publication:||American Journalism Review|
|Date:||Jul 1, 1996|
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