James Murdoch moves 21st Century Fox to the future

James Murdoch has emerged from the heavy challenges that plagued News Corp over the last few years with a stronger sense of leadership and perseverance he revealed at the MIPCOM conference last month. Murdoch, currently co-chief operating officer at 21st Century Fox, said, “you have to lead through those things. All of your colleagues are going through the same thing that you are, even if you’re more high profile. And you have to enable them to help you,” he said.

Citing Churchill in his travails during the phone-hacking scandal he quipped, “Winston Churchill said ‘when you’re going through hell, keep moving’. Perseverance is everything. It’s about strength of will and character.”

He also stressed the importance of taking risks particularly in the constantly evolving media environment.

In refreshingly candid remarks when asked about prior risks and missteps he said, “as a company we’ve definitely made investments that were challenging. Famously as a company with MySpace, which was a total write-off and a disaster.”

On the recent abandoned bid for Time Warner he described it as an opportunity at a moment in time, “when we thought a combination could be very attractive for both companies.”

He added that it was “an opportunistic thing” and not a bid process that they wanted to drag out.

As steward of 21st Century Fox he says the new vision of the one year old merged entity is to make it “one of the great homes for creativity and storytelling, and really take it forward many decades. We don’t always hit that mark, but that’s what we’re aspiring to do.”

“The business at the end of the day is really a digital video business. And it’s a business of ideas,” he affirmed.

Murdoch agreed that the era of rapid consolidation was clearly upon us.  “We see it at the infrastructure business of the television business: cable and satellite. We see an explosion in competition of the over-the-top business, whether they be a Sky Go or an Amazon or Netflix, and so forth. But in the upstream business, the copyright business, I do think we will see consolidation.”

He added that “a lot of the business rules are kind of breaking down. The challenges that we face in one part of a world versus another are really very similar.”

He stated that the value of programming and copyright going up and investment needed to reflect that. “You’re really shifting the value from downstream margin to upstream creators. The competition to be genuinely meaningful to customers is so intense, that investment needs to be made.”

He added that the economic of the cloud and the driver of connectivity was changing everything , “that’s an enormously exciting time for customers. So the competitive set that we all operate in is vastly larger than it has ever been before. If you make a TV show today, you’re competing with every single TV show that’s ever been made before.”

Murdoch proffered that bundling will remain but in different modes, “the stack will be re-ordered, but subscription television is alive and kicking, and it’s changing, driven by a competitive dynamic”.

Tackling the issue of windowing which is being challenged by streaming platforms Murdoch said, “the business rules that we have, broadly as a TV industry where we have these windows that are set up that are largely set up – and I’m going to get in trouble with my colleagues for this – in order to make our product more available to customers, not less. Because you had a finite amount of inventory that you could fill up.”  

He added that there will be an ‘evolution’ in windowing process allowing for flexibility and programming delivery.

“Now, serving ones and zeroes from the cloud in streaming services, the necessity of windowing from an infrastructure point of view, isn’t really there…..I think windowing will survive ultimately. It should be driven by making the content more accessible. When it becomes a tool for limiting choice, then it will be a problem. And we have got make sure we don’t suffer from that kind of incumbency challenge as we go forward.”