Know Your Enemy - for it be News Corp

The Assets

News Corp is a publically traded entertainment company run by Rupert Murdoch whose assets are valued at approximately 68 billion. A partial list of these assets includes Twentieth Century Fox, Twentieth Century Fox Television, Fox Searchlight Pictures, Fox Broadcasting Company, BSkyB, Sky Latin America, Sky Television Italy ,Fox News Channel, Fox Movie Channel, Fox Sports Channel, Fox Soccer Channel, FUEL TV, National Geographic Channel,FX Network, Speed Channel, The Weekly Standard, Gemstar (TV Guide) over 165 newspapers, and Harper Collins Books.

News Corp recently purchased My Space as part of a much larger Internet strategy and spending spree. They are in the final stages of purchasing the Dow Jones Company whose prize asset is The Wall Street Journal. This fall News Corp. is launching a 24 hour business channel which will have the look and feel of Fox News to be called Fox Business News (FBN).

Lastly, and from my perspective, most importantly, Murdoch intends "to put YouTube out of business" through its joint venture with NBC Universal for a similar recently launched concept called My Space TV. More on that later.

The Players

Although News Corp. employes a vast number of executives all over the world, power is highly concentrated into the hands of a few. Rupert Murdoch, Peter Chernin and Roger Ailes. This 3-some make all of the major decisions.

If the name Roger Ailes sounds familiar it is because he is a life long wingnut. who at one time worked for Nixon. and is a friend both of Karl Rove and the White House. Ailes shares Murdochs views that there is a liberal bias to the entertainment world that they are intent on "balancing". He is the only boss Bill O'Rielly has ever known as Bill started working for him straight out of college. He is big, blustery,and currently pissed as hell about Fox News' ratings decline . He is currently working on numerous projects but highly attentive to these 2:

(1)remaking Fox's 35 local television stations, broadcasting to nearly 40 percent of America's homes, into Fox News Channel's national image.

(2)crafting the content of FBN in tandem with the makeover of the WSJ of which Jack Schaffer of the Slate had this to say:

That rotten old bastard won’t be able to keep himself from defiling the paper. It’s in his nature to contaminate his own wells. As experienced Journal reporters and editors leave or are driven out, their replacements will owe their allegiance to Murdoch and Murdoch’s people. Will they bring to news coverage the impartiality we’ve come to expect from the Journal? Or will they pull and duck punches on his behalf? Will they skew stories about Viacom and Condé Nast and China to please the well-known views of their master? You betcha. I can’t recall any News Corp. employee who got a raise or a promotion after undermining the Murdoch empire’s interests with an honest, accurate story.

A point about the News Corp.'s working environment. I've known quite a few people who have worked there. I left the industry several years ago. But each and every time a recruiter called me about an opening there, my answer was a loud NO. It is singularly the worst working environment you can imagine. The calls I have gotten at night from grown men and women actually weeping about either a co-workers stabs at them, or the talking down they withstood at a meeting are many. I wish I had saved the many emails sent to me in secret asking my advice on how to respond to a peer's email where they are being attacked for incomptence. News Corp just might be Hell. Back to our story.

Then there is Peter Chernin - who shares power equally with Ailes - who had this to say recently about My Space TV:

We willl Crush YouTube At least that's the plan, snip

As if we needed more proof of MySpace’s intolerance of outside development, News Corp. chief operating officer Peter Chernin told investors at an industry conference today that since much of YouTube’s traffic comes from MySpace, it’s time to cut out the middle man. Chernin estimated that around 60-70% of YouTube’s traffic comes from MySpace, and as a result he wants to ramp up MySpace Video, giving users less incentive to look elsewhere. But while the 60% figure might not be totally accurate, MySpace is definitely a catalyst for YouTube’s growth - they actually reported a dip in traffic when MySpace temporarily disabled YouTube embeds at the end of 2005 (they were forced to allow them again after a user revolt).

http://72.14.253.104/...

He is actually not as evil as Ailes. It's been years since I have been in his company, but I spent many an occassion with him when he ran Showtime - and with a clear liberal bias. Perhaps the liberal part is gone,but its hard to change a basically decent person. He is no wingnut and as you will read here,it's also no coincidence that Hillary's people showed up on Fox to defend DKOS the day after O'Reilly's smear of Yearly Kos: Snip

In recent days, the word used more and more frequently to describe Hillary Clinton's march to the Democratic presidential nomination has been "inevitable." She consistently leads public opinion polls across the country by a good 10 points over her nearest rival. Hollywood, after a brief infatuation with Barack Obama, is now, according to the Los Angeles Times, consolidating its support behind the junior senator from New York. Rupert Murdoch employee Peter Chernin extracted a cool $850,000 from wealthy Angelenos for the former first lady at a recent event in

his home. A few days later, she was endorsed by the King of Hollywood himself -- Steven Spielberg

http://www.alternet.org/...

Surely this is a glimpse into the News Corp. world. Chernin supporting Hillary. Ailes egging O'Reilly on.

The Enemies

Murdoch has a lot of enemies, amongst them Ted Turner, Richard Branson and most importantly John Malone. Let me caveat enemies. These real power brokers if asked, would never own up to such a thing as "enemy" - well Ted would. They would praise Rupert instead. They actually play a much more sophisticated and nasty game. And the king of this game is John Malone, in whose organization I honed my own skills. The man is sheer genius.snip

Ted Turner - Ah, Murdoch's first big American kill. One could lay the blame for CNN creator Turner's ultimate biz demise more properly at the feet of Time Warner, but Turner vs. Murdoch was too classic a matchup not to believe in. The conservative, rapacious Australian tabloid mogul versus his bizarro-world counterpart -- an American redneck news hawk with liberal, philanthropic delusions of grandeur. These days, Turner can only seethe about Murdoch's lack of charity, when it's pretty certain that Turner would be more than willing to cross the street to kick him. John Malone - Perhaps the first serious challenge to the Murdoch family's dominance of News Corp. came via John Malone's Liberty Media. The American company had amassed a considerable though not yet controlling stake in News Corp., which Murdoch interpreted as a threat; Malone's complaints about Murdochian "empire building" at the expense of shareholder return also didn't help. The threat evaporated with a deal trading the News Corp. shares back as part of an $11 billion asset swap, including the transfer of a controlling interest in DirecTV over to Liberty. Malone and Murdoch are talking sweetly of each other and the deal now, but the Malones are probably off the Christmas card list for a year or two, at least.

What its really all about

Money, plain and simple - specifically advertising dollars. In recent days there have been a lot of articles surfacing not just about YouTube, but its owner Google. Google is a very serious threat to News Corp. but also to other media giants whose cable network holdings rely on advertising budgets:snip

Representatives from Google's growing list of competitors say that unless checked now, Google will ultimately control most of the interactive advertising revenues for broadband. Industry insiders understand that control over ad revenues will give Google tremendous clout over the future of content online, since it will have the resources to fund whatever it desires. Consequently, Viacom's legal action against Google is less about copyright infringement over clips from The Daily Show appearing on YouTube than about cutting the search and advertising behemoth down to size.

http://www.alternet.org/...

While NewsCorp, and others, are out to kill YouTube Malone is sitting at the opposite end of the table watching and planning. Unlike Murdoch he moves slowly and strategically,and with the respect and solidarity of those that work for him in lock step behind him. As noted above his recent acquisiton of satellite giant DirecTV from Murdoch is an example of how he moves. To me, it would be utterly suprising if Malone was not working on a large strategic relationship with Google while the rest of the media moguls were trying to crush them.

And thus when I read this today, I was not surprised. Snip

DIRECTV Next for Google Ad Deal?

Just a short week after internet giant Google announced a partnership to sell TV advertising time for EchoStar, the online search company is rumored to have reached a similar deal with the country's largest satellite TV provider DIRECTV. Industry reports this week have said the deal is taking more time to finalize than the one inked with DISH Network because DIRECTV is managing its ownership change in the much-reported asset swap of News Corp. and Liberty Media. According to Silicon Valley venture capital newsletter VentureBeat, citing an unnamed source close to the talks, the DIRECTV deal with Google will eventually go through. DIRECTV spokesman Robert Mercer confirmed to SkyREPORT that the company is always looking for ways to increase ad sales revenue, but the satcaster "is not commenting on what's being reported in the press" regarding any new partnerships. Google declined to comment on the story. Coupled with EchoStar's footprint, a partnership between Google and DIRECTV would be significant, to say the least, giving the internet company's advertisers access to more than 25 percent of U.S. TV households. The move could push Google into unchartered territory, being the first to forge an alliance with both satellite providers and creating a unified advertising powerhouse bigger than the largest cable TV operation - Comcast

http://www.skyreport.com/...

My Prediction: Watch for an escalation in deals between Malone and Google. WHY? We Are coming to the point of this diary. Net Nutrality.

If you have read this far you know where most of the big media companies stand on this issue: they want to be the GATEKEEPER and that means limiting access to Internet Content through deregulation. And by now you have probably guessed who is on the other side of the table, pushing for open access.

"High-speed Internet will open up access that might be slowed down by traditional media ownership concentration," Malone says. "Anybody who wants to set up an Internet broadcast can do it. And there will be cross-platform convergence between the television and the personal computer."

Turner agrees the regulators may need to step in to protect the public interest. "There is no company out there — not Viacom, News Corp. (which owns Fox) or Disney, the big television powers — that really has the public interest primarily at heart," he says. "They have their own selfish financial interest at heart, and they would do just about anything for a buck. I hate to say that, but it's true

Here's A Surprise Barry Diller weighs in:

Diller says that's why he not only opposes deregulation — he wants some re-regulation. "If you have this kind of concentration, then you must have rules and regulations for behavior," he says.

http://www.usatoday.com/...



So What Does This Have To Do With O'Reilly and Kos

Again, this is my opinion, but I hope you will agree with me that its at the very least a well informed opinion.

Daily Kos is a problem for NewsCorp. They don't want to buy it because they can't monetize it - could you see people sticking around if it was 50% advertising.

And they can't control it.

Its members are progressive Democrates, easily mobilized, and from a recent media industry report not going anywhere soon, in fact DKOS is a "success story" studied by media companies for its "stickiness" - or ability to maintain users, something main stream media struggles with daily. For example. Comcast announced TODAY a net loss of subscribers for the 2nd quarter.

Daily Kos' successful stickiness lies in the fact that it doesn't rely solely on the voice of the masses to dictate what is interesting. Unlike Digg, which is so mass market that it is often less than useful, Daily Kos's editorial voice helps sort content internally, based on what its editors know of the needs and desires of its readers. This can be a useful tactic for companies to borrow from, particularly those that know they can't rely on their visitors to take the time to create content or share ideas.

http://www.imediaconnection.com/...

So to put it as simply as possible - DKOS must go away, be crushed for it doesn't fit neatly into any grand News Corp. plan and its annoying in its opinions and ability to call out Fox whenever it deems fit. Its merely a convenience to stick the words in Bill O'Reilly's mouth because as a loud mouth he will be heard and that means the word will be spread. O'Reilly is just a sockpuppet serving the NewsCorp master.

But it is a problem not likely to go away. Like a dog with a bone, News Corp. will keep at this.



So Here's a Suggestion for what to do about it

Since by now you know I have a great deal of respect for John Malone - here's a page out of his book. Learn where they are vulnerable. Then slowly move in and take yout first bite. And it better hurt badly enough for them to notice. Don't eat away at everything all at once. Take several bites off that apple until their foundation starts to tumble a little. Then make your move and NEVER loose site of your objective.

Where They Are Most Vulnerable And What You Can Do

About It

Murdoch etc. is planning on both Comcast and Time Warner Cable for the roll out of FBN to approximately 30 million cable households. Both of these companies (I imagine because that is their way) have cut deals that have lessened their fees to carry FBN in exchange for signing on to distribute My Space TV - which will in turn hurt YouTube. Why? 2 very important reasons:

(1) Cable Operators programming fees cut right into their bottom line so horse trading is a common ritual. (2) Like Murdoch they yearn for a Gate-keeper world. Or putting it another way - they are seriously anti net nutrality.

Luckily there is one thing cable operators hate more than bloggers - hearing from their subscribers.

So here is the recommended plan:

(1)Stop focusing on Bill. If nothing else I hope I have put into perspective how small he is realative to the world spinning around us.

(2) Time Warner, Comcast and Charter intend to roll out FBN on their digital tier - you know the tier YOU ARE PAYING EXTRA MONEY FOR. Let them know now you will DROP THE TIER IF FBN IS CARRIED ON IT. This tier is where a big piece of their profitability is coming from. They charge 5 dollars, they pay 1 dollar in fees. 30 million x 4. You do the math. FBN CANNOT LAUNCH WITHOUT THESE ROLL OUT COMMITTMENTS

(3)Its not just TimeWarner and Comcast. If you are not a subscriber to either of these but are to another, you can call your local system and tell the customer service rep you have heard about FBN and then state your intentions.

(4)As a next step tell the cable industry exactly what you think about My Space TV and that you are considering dropping cable TV altogther. Everyone here can do that. I've supplied the contact info. This has to be done more than once and by a lot of people. And you have to mean it. I KNOW I DO. The cable industry's marketing organization is called CTAM. info below

(5) Do what we do best - blog about it. But not just here - there are good sites (list provided) that are adjuncts to some of the cable industries best trade magazines. I know the people who run these companies. They will listen - especially the ones I am providing info on. They share many of the feelings represented here even if during their daily lives they can't show it.

In closing, we have a lot to say. Now lets take it to the right people and say it loud and clear.

additional links:

www.tvweek.com

email: char@ctam.com

to learn more about CTAM the cable industry's marketing arm:

www.ctam.com

Contacting TimeWarner Cable and Comcast

To be most effective, contact the Heads of Corporate Communications

http://www.timewarner.com/...

The above link will take you to Edward Adler Time Warners head of Corp. Communications. You may or may not be able to email him from there. If not email INVESTOR RELATIONS on same page.

For the system level, include a note in your next bill telling them what your intentions are or call them. Their customer service reps are required to report all complaints

For Comcast the contact is:

D'Arcy F. Rudnay

Senior Vice President, Corporate Communications

Comcast Corporation

http://www.comcast.com/...

In the effort to get this out please forgive any typos