It's funny.
Rupert
Murdoch has been saving up his pocket money so that one of his
companies, 21st Century Fox, can mop up all remaining shares in Sky.
It's
funny for many reasons, partly because most people thought he already
owned Sky, but not Fox, when in fact it's the other way around! He
actually only owns 39% of Sky, a fact that has bugged him for years. (He
lost control of it in its formative years.)
Funnier still is that
he's willing to blow £11.7bn on his new Sky toy in order to take full
control of the company, which therefore values Sky at £18.5bn. But is it
worth anywhere near that much?
The last time he tried this tack in
2010 his bid fell apart humiliatingly during the phone-hacking scandal,
particularly when it emerged that his beloved News Of The World
"journalists" had hacked the phone of murdered teenager Milly Dowler.
But
the same bid is back again, and Murdoch's son James (now CEO of Fox
& Chair of Sky) reckons there should be no real concessions required
to push it through. Offcom, the public and politicians from all sides
see this differently, so it should be interesting to see how this pans
out.
The question is: Is Rupert making the right decision?
Bob
Dylan always said The Times They Are A Changing, and Murdoch was always
good at spotting change, taking big risks, getting ahead of the crowd
and cashing in big. If he took an interest in a new technology then you
could bet he could make it work. Eventually.
Love him or hate him, Britain is a very different place because of him.
But has he misjudged the future this time?
Two things have happened in the last year that should have set alarm bells ringing at Murdoch HQ.
Firstly,
despite unrelenting pounding by Murdoch's press, Theresa May failed to
win the last election, even when starting the campaign with a huge poll
lead.
Murdoch is supposed to have stormed out when he heard the BBC
exit poll. If it was a shock to Britain, it was an earthquake to
Murdoch, and a huge body-blow. His baby newspaper, The Sun (now
bolstered by effectively merging with the dying News Of The World), had
previously "won it" for Murdoch-approved political leaders in the UK for
decades. In particular, John Major had miraculously won against all the
odds in 1992, and Murdoch & The Sun had basked in "their" victory.
But
in 2017's election Murdoch's media weren't perceived to have performed
poorly, and yet they had been all but routed. Intriguingly no one,
including Murdoch himself, it seemed, could work out what they'd done
wrong. Swaying voters with hysterical headlines had always worked in the
past, so why hadn't it worked this time, particularly with a clear cut
winner in May & an opponent they depicted as a Trotskyite
scarecrow.
So, it wasn't just May who'd missed an open goal, Murdoch
had as well. And Murdoch didn't ever miss, not like this. It sent
shockwaves through the industry. Had he lost his touch, they asked.
Worse
still, it now appears that Murdoch may have driven droves of voters
TOWARDS Jeremy Corbyn! When The Sun (or the Mail) produced outrageous
front pages (pro-Sweet-May, & anti-Trot-Corbyn), they were
reproduced widely across the other media...the social media.
But
they weren't retweeted in awe, they were retweeted in mockery. At first
caustic & cutting remarks captioned the front-pages, but then -
sometimes even before the papers hit the street - parodies would be
spread far & wide across the land, & retweeted mercilessly to
viral status. In many key areas, The Sun & The Mail were becoming a
laughing stock. The old media was being torn apart by the social media.
On
& on during the campaign the right-wing papers blindly blundered on
just making it worse for themselves & May. The more obnoxious the
papers were, the more people turned against them. In an undercurrent
that was hard to pick up, Murdoch news became fake news.
Curiously,
it went undetected by the papers who smugly believed that even if there
was a movement pitching invisibly against them it would never come out
& actually vote against them. But they were wrong about that too.
There
is a classic video of a man walking into a supermarket, picking up a
huge pile of The Sun & dumping them all in a nearby bin. Another
shows a guy casually hiding a huge pile in a supermarket freezer!
Although this was only 2 people, and less than 100 papers, the videos
went viral, and led to loads more papers being dumped and opinions
formed.
In the old days people would be more middle class about it
and actually buy the newspaper before trashing it. Now people are
sending a clear message to retailers, social media and the world at
large. If the paper's offensive, don't sell it or YOU can pay to have it
trashed.
Liverpool had already banned The Sun, and other cities
could join forces too. It could easily snowball into a crisis of
confidence for Murdoch's papers. It would be like a house built of
straw, so easily blown away.
Secondly, with his News International branch of his empire having this big question mark over it, attention switches to Sky.
The
jewel in the Sky TV crown is Premier League football. Since the early
1990s they have opened the door to widespread live football on TV,
effectively cornering the lucrative market that many (wrongly) felt
would kill the sport.
Unfortunately, they have opened Pandora's Box,
and are struggling to control it. Live Premier football has thrived so
much that fans want it more than Sky can supply it. There is now a whole
industry of illegal live streams of every match that has a camera
pointed at it!
Sky and the Premier League are desperately trying to
plug the holes, but like Corbyn's minions, there's millions more
springing up just as fast as they block one source! It's a losing
battle, particularly as it's a global problem, not just a few football
fans in the UK.
What Murdoch has failed to foresee is the potential
for this market. For example, when Virgin Media recently advertised
their TV package as having "All the football" they were inundated with
enquiries as to whether that meant ALL the games live. Yes, ALL the
football.
Of course, it just meant that Virgin offered access to Sky
& BT live games, but it just showed what fans' expectations were.
In the past after crawling through the desert & finding the oasis
dry they would have drunk the sand (i.e. bitten the bullet and bought
the Sky Sports package). Instead, they are taking on the system to get
"All the football" any way they can.
What's more these aren't
computer whizz-kids, these are just as much the middle-class fans who
used to be the backbone of Sky Sports subscriptions. They have been more
than happy to fight their way through the mysteries of Kodi and the
like to get live streams, and they are the warriors that Murdoch has to
beat. Well, good luck with THAT, Rupert! Your peasants are revolting!
Sky's
response has not impressed many. The company has been panicked into
restructuring its Sports channels. "Only pay for the Sport You Love",
they boldly claim, where the Sky Sports Premier League channel is £18pm
and offers only (only!) 126 live games. Now that might be a third of all
Premier games, but fans are non-plussed. Up until a couple of years ago
you could get the Sky Sports 1 channel (the one that showed 99% of the
Prem games on Sky) on its own for about £10pm. [You sometimes had to
search hard to find that subscription, but it was still available till
recently!] Fans in the know don't like paying for stuff they don't have
to, and even more they hate massive price hikes.
Of course, if you
add the other Sky Sports Football channel (the one with the lower
leagues, the Caraboa Cup, etc) the price rises to £22pm. All the sport
is £27pm, but if you take all that you should get a life!
Part of the
restructuring of the sports channels is to make it more difficult for
the illegal live streamers, but give them a couple of long evenings with
their laptop & a can of Carabao and they'll have worked their way
around anything Sky & the Premier League has to throw at them.
Without
a solution to this demand-for-streaming problem, the value of Sky is
really debatable. Either they must get heavy and throw everything
they've got to stamp out the illegal streaming (a tactic that shows
little sign of working), or they should offer their own
reasonably-priced streaming package.
I'd bet Murdoch would favour the latter, but the question is could he pull it off?
Fail,
and he may find he's just spent £12bn on a company, the value of which
could slip through his fingers like sand as people go elsewhere for
their TV and sport. Let's face it, there's plenty of competition around,
legal or otherwise.
Unbelievably, his Sky could (theoretically) get
squeezed out and just melt away, and he could end up like the baddie at
the end of an Indiana Jones movie, grasping at his long-desired prize
just as it crumbles into dust.
So, instead of wasting £12bn on
mopping up the past, he should look again to the future. There's money
in them-thar-hills, and if anyone can spot it then it's Murdoch.