Cheer up – the recession (depression, according to Gordon Brown’s most recent Freudian slip of the tongue) has some green shoots. You wouldn’t have noticed unless you were looking hard – the company in question is hellbent on global media domination and now owns the Dow Jones Wall Street Journal- but on Thursday, 5 February News Corporation (Rupert Murdoch and Sons Inc.) announced third quarter losses of £4.4 billion ($6.4 billion) compared to a profit of $832 million in the comparable quarter in 2008. To be fair – a term unfamiliar at Fox News or the Sun, two of Murdoch’s most strident mouthpieces – the losses included a $2.8 billion writedown for Dow Jones, which Murdoch bought for $5.8 billion last year, a 65% premium on its then current stock value. Write downs on other ‘assets’ ($185 million, allegedly against the New York Post, a perennial lossmaking nasty tabloid in the mould of the London Sun) accounted for a further $800 million, leaving over $2.8 billion in operating losses. Revenues from BSkyB and Murdoch’s stable of newspapers apparently fell by over 8 percent in the quarter. Rupert Murdoch agreed that these losses, the first in three years, place the company in a very dangerous position. The (Matthew Freud?) PR machine has been in overdrive, with articles and commentators saying that due to the recession (depression?) people will stay at home more, watching Sky Television, of course.
Dumb and Dumber. MySpace, Fox and the Wall Street Journal, not forgetting Sky and the soaraway tabloid Times
Another view is that there is a flight to quality in recessionary times. Sky Television, a paid-for indulgence serving up bland, formulaic tabloid TV, aiming for a virtual monopoly on TV sport (in the UK at least), increasingly demanding a paid premium to the subscription when the events are actually worth watching, may be a bridge too far when it is a choice between finding cash for the groceries or watching endless repeats of The Simpsons. In the UK, the BBC is surrounding Sky’s wagons with its (compulsory) paid-for offering that matches Sky in dross value (Jonathan Ross, car crash TV, celebrity game shows, endless sweary TV chefs etc.). Its impressive deadly embrace of the intellectual space between the ears – it does serve up some excellent and well-made middlebrow programming on BBC3 and Four – now also includes free add-ons such as iPlayer, offering internet viewers the opportunity to replay and watch recent and archive TV and radio programmes on demand. Sky Movies, another add-on whose bill of fare rivals the bargain bin at the now defunct Woolworths, has surely been hard-hit by the facility to legally (or illegally) download current movies on demand, and innovators such as Lovefilm.com, who offer very cheap DVD subscription packages.
Circulation, but more importantly, advertising revenues at Murdoch’s marquee news titles have been hit by the global advertising recession, paper price hikes and the availability of first class free information from diverse sources on the web. In a US election year, FoxNews in particular should have defied the recession – except that their blend of neocon vitriol and unstinting support for the deeply reviled losing side might have put them at a disadvantage. Murdoch’s $500 million plus purchase of MySpace looks like the year-before-the year-before last’s dotcom vanity purchase. The Wall Street Journal, Barrons, Dow Jones et al rely heavily upon corporate bank, mutual fund and pension advertising for their staple revenues. Merger and aquisition and IPO announcements are the cream. All these streams have narrowed to a trickle, for obvious reasons. The WSJ brand relies on its integrity, probity and impartiality. As part of the Murdoch stable, it might be difficult to maintain that reputation.
News Corporation embarked upon a bold experiment to create and corner the world market in information, entertainment, infotainment and, in passing, political influence. To do so profitably required dumbing down its audiences. Over the years, as paginations on its titles quadrupled, numbers of journalists and researchers were dramatically cut, leading to the rise of the ghastly PR-driven phenomenon of ‘churnalism.’It is a mark of Murdoch’s power (and journalists’ collective job anxiety coupled with a tendency not to defecate where they might eat) that the news was spun or elided. News Corp’s shares only fell by 6.3% on US markets, though they have steeply fallen over the past 12 months. Murdoch grew rich on never knowingly overestimating the public’s appetite to be patronised – he may be proved right again. On the other hand, a positive outcome of the recession might be that the inexorable rise (to the lowest common denominator) of Murdoch and Sons will be at worst postponed, at best halted, as people realise that paying to eat garbage is a dubious luxury that they can well afford to forego.
John J Kelly
3 Comments
While I spent a year in Australia I worked for Rupert Murdoch – as a wool roller – a more precise job description would have to be a shit picker – on his sheep station in New South Wales. I was fired after about 5 weeks. The work was hard and sweaty and I was not fired for my lack of energy or skill, but due to some regulation in sleeping arrangements for females on the property. I was even complimented on my speed and energy for picking through the shit. They should have kept me on, by the look of things: they have collected so much shit since I left. Man builds an Empire then destroys it. Control freak.
How right you are to say the box is so clogged up with sweaty chefs, and reality and makeover type crap.I have lived without a TV most of my life and since moving to Spain I have not had one in the house. While holed up in the snow in London last week I saw some odd stuff on the TV, all completely valueless: uninteresting people with nothing to say.
Perhaps now people will sharpen up their minds and wallets make a firm decision to what they need and what they don’t. In an ideal world, ‘celeb’ mags, along with the ‘Common and Coarse’ glossies, and gossip-filled rags lacking any integrity should shrink with a growth in publications that offer thought for your money. A return to quality, and questioning.
The News Corp losses for 2008 signify the beginning of the death of the advertising industry as we know it. For the last 50+ years multimedia advertising has led the consuming world into a cycle of addiction to object possession. The ingenious marketing of dangling tasty carrots fed a consumerist cycle which is now grinding to a halt. More and more and more carrots led us to this point, carried in a bag that also contained our news, our information and our entertainment. The bag now needs to be recycled after the consumer has been milked dry. Simplistically, nobody can afford to buy and those GM (Great Murdoch) carrots can’t sustain our basic needs so they aren’t on the menu anymore. Therefore a lot of advertising led businesses are likely to die out. Eventually companies notice the penny dropping and just stop advertising. No advertising,no mass media, no market, no newsprint, no Junk TV.
The real good news is long live freedom of speech. Long live the sustainable online blog. Let’s make do and watch consumer compromises go minimal, low-consumption and virtual-digital.
Hell’s teeth this recession’s depressing! First the bread goes and now the circuses are threatened…and if the Ostrogoths go home we’ll have to do our own plumbing.
I’m off to watch Jeremy Kyle while I still can.
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[...] Bad as it sounds, it is a big improvement on the previous quarter’s losses of $6.4 billion (Thus passim) which were inflated by a huge writedown on the Wall Street journal. The ‘extraordinary [...]