Sunday, October 10, 2010

Rupert Murdoch - A threat to the world's TV viewing audience including you and me

Most are not aware of two burning disputes between one media billionaire and two others. At issue is the price of your monthly cable or satellite TV bill. It could go up 50% in a very few years.

Rupert Murdoch of News Corp, #148 on Forbes World's Billionaires list, has decided to take on Charles Ergen of Dish Network, #117 on the list, and Charles Dolan of Cablevision, #367. Rupert is trying to force the two Charles to charge their subscribers a 50% increase in monthly charges for his TV channels.

The News Corp owned Wall Street Journal article headlined News Corp., Cablevision Square Off explained:
News Corp.—which is seeking higher fees for its channels in negotiations with Cablevision— on Sunday began running ads addressed to the cable-TV company's subscribers, warning that if a new TV-rights deal isn't struck soon, viewers could lose Fox shows including football games and "Glee."

...Carriage contract talks have become more bruising as TV companies push for the first time to land monthly cash fees for broadcast networks. Cable- and satellite-TV operators say they try to withstand fee demands to avoid passing on costs to their customers' bills. As contract deadlines creep closer, each side blames each other for possible losses of favorite shows.

Ultimately, deals often are struck without programming interruptions. But this year, Cablevision customers lost the Food Network and HGTV cable channels for several weeks after a rough-and-tumble fee dispute with Scripps Networks Interactive Inc. In March, Cablevision lost access to ABC and some other Walt Disney Co. channels for nearly 24 hours, including during the first few minutes of ABC's Academy Awards telecast.
Regarding the Dish Network situation, News Corp has pulled all of its cable channels off of Dish including all its regional sports networks. And it is threatening to pull 27 News Corp owned or controlled local Fox TV stations on November 1, stations serving about 50 million TV households representing about 44% of the U.S. market.

In an article headlined Dish CEO defiant after losing Fox channels we learn:
With Fox and Dish also facing the end of their current arrangement for Fox's owned-and-operated TV stations at the end of the month, [BTIG investor analyst Richard Greenfield] argued that waiting to renew both arrangements in several weeks makes no business sense.

"What's the benefit of going dark for four weeks and losing subs, only to ultimately pay Fox what they are demanding," he asked. "We can only presume [Ergen] is prepared to be dark for the long-haul."

A Dish spokeswoman said in a response that programmers "are increasingly bullying pay TV companies into extraordinary rate increases in an effort to pay for expensive sports acquisition rights."

She said the Fox sports channels represent less than 2% of the content that Dish makes available in its most popular programming package. And of the hours that Dish customers spend on watching TV, less than 1% are spent on regional sports networks, she added.
Investment analysts generally are stupid and Greenfield is no exception. The Fox broadcast network's shows aren't doing all that well in the ratings and pulling them off of cable and satellite systems won't improve that. It is true that Dish is already losing subscribers. I know that those upset by the loss of the News Corp sports channels and cable channels don't understand the concerns of the few over the reach of Rupert Murdoch's tightening tentacles on the media, particularly TV.

Over in Britain concern is growing over his latest move. From The Hollywood Reporter:
BBC director general Mark Thompson has again spoken out against Rupert Murdoch-owned News Corp.'s bid for the remaining 61 percent of BSkyB, this time using an interview on PBS' Charlie Rose Thursday to warn against the consequences of the deal.

Thompson's comments on U.S. television come ahead of a hotly anticipated speech later this month by News Corp boss Rupert Murdoch, who is expected to give further details of the bid when he delivers the inaugural Baroness Thatcher lecture in London October 21st.
And from The Guardian/Observer web site:
Murdoch has managed to achieve what most assumed was impossible, a more or less harmonious agreement between, among others, the BBC, the Daily Mail, the Guardian Media Group (which owns the Observer), the Telegraph Media Group and the owners of the Daily Mirror. There probably hasn't been such a disparate and determined alliance since Wellington mustered Prussians, Saxons, Polish, Dutch, Belgian, English and Irish troops to confront Napoleon at a little village south of Brussels in 1815.

This isn't Murdoch's Waterloo and, after 40 years of bending Britain to his political will, the 79-year-old probably is not losing much sleep over the new alliance. Still, even he must be aware of the unprecedented strength of feeling in boardrooms against him. There is almost no one in the business outside News International who disagreed with the director general of the BBC, Mark Thompson, when he said on US television that there was a case for looking at Rupert Murdoch's media ownership systematically because of the "potential for abuse of power".

That is a glorious understatement. Give almost any politician a guarantee of anonymity and he or she will say much more but, as Peter Oborne's Channel 4 Dispatches programme made clear, most are too frightened to challenge him or his executives. Successive generations of politicians have allowed Murdoch to extend his power so, in the estimation of the respected media analyst Claire Enders, Britain has long passed the "Berlusconi moment".

No newspaper company can buy ITV because of rules against cross-ownership, but because Sky was founded after the law was enacted, these rules do not apply. The anachronism means that Murdoch can merge Sky, which has a turnover roughly three times the size of ITV's and is growing at a rate of about 400,000 subscribers a year, with his newspaper group....
This is what Americans also should know. Murdoch's media reach leaves us also with politicians "too frightened to challenge him or his executives." Murdoch manipulates political and economic power in the pursuit of his goals better than anyone else in the capitalist world, East and West, today.

For instance, we had the big uproar in June 2003 over the FCC's move to increase by 10% the number of local TV affiliates a national broadcast network could own - from 35% to 45%.

Even a Republican controlled Congress had trouble with that. But after first voting to keep the ownership cap at 35%, both the House and Senate raised the aggregate cap to 39% by attaching a rider to a massive funding bill. The 39% cap allowed News Corp/FOX to keep all their stations.

Thus I have no delusions that American politicians - liberal, conservative or moderate - have the courage to take him on. But if those two other billionaires, Charles Ergen of Dish Network and Charles Dolan of Cablevision, take him on at the same time, at least some opportunity exists to reign him in. One can hope that if the public loses it's Fox channel in New York City and Philadelphia on both the local cable system and Dish Network, politicians might take notice.

Otherwise, I have to be content with the knowledge that he's 79 and likely will die in the next 20 years. At that point, it is likely his empire will slowly lose its clout as others have done in the past.

Still, in the pursuit of his economic goals, the damage he has done to the arena of American political discourse has already exceeded that of William Randolph Hearst.

(Incidentally, this has nothing to do with partisanship. Hearst was twice elected as a Democrat to the U.S. House of Representatives. Nor does it have anything to do with Murdoch's Australian origins. Hearst's patrilineal ancestor, John Hurst settled in Plymouth Colony around 1620. These guys are/were just missing something found in billionaires like Warren Buffett - a semblance of humility.)


1 comment:

aaron said...

I do hope that Dish sticks to their guns on this dispute. Them giving in could start the domino affect ultimately raising the rates charged by all providers making monthly rates unreasonable.