Murdoch’s Munificence

by: Michael Curtin / University of Wisconsin-Madison

Critics roundly denounce Rupert Murdoch as the most rapacious media baron of the current era, yet few have commented upon the fact that Sir Rupert is also our greatest media philanthropist. In fact, Murdoch himself may not recognize this or, more to the point, he might not relish the fact that over the past decade News Corporation has lavished more resources on the development of Asian television than any other private concern, with estimates now running close to $2 billion. This largesse has furthermore spurred the development of competing commercial services and has stimulated reforms within state media, thereby dramatically expanding the range of information and entertainment now available to Asian audiences. Of course, Murdoch’s initial ambition was hardly philanthropic, yet in retrospect one strains to see it as a commercial venture, since both his Star and Phoenix satellite services are deeply in the red and have yet to prove themselves consistently profitable.

Murdoch stunned the media critics worldwide when he first mounted a billion dollar takeover of Star TV in 1993, putting him at the helm of the first pan-Asian satellite platform. So taken was he with the stratospheric rhetoric of satellite TV that he regaled the investment and advertising communities with heady prophecies of a new Asian millennium of three billion consumers and an end to authoritarian regimes everywhere. As one might imagine Chinese leaders didn’t share the latter enthusiasm, slapping a ban on foreign satellite services shortly thereafter and rolling out competitive cable services that were offered for a fraction of the cost Star’s services. A humbled Murdoch was accordingly reminded that his fortunes in Asia would be shaped by forces on the ground as much as technologies in the skies.

Yet one can perhaps forgive Murdoch’s initial enthusiasm, for his investment was made during an era of heady optimism about the power of satellite television to transcend national borders and usher in at long last the global village that many had reportedly been waiting to join. Maps of satellite footprints were perhaps the most intoxicating representations of this TV mania, as in the case of Star they suggested blanket coverage across Asia, from Lebanon to the Philippines and south to Indonesia. Yet today, News Corp’s Asia satellite services look more like a patchwork quilt, and a somewhat tattered one at that. Indeed, over the past decade, Star’s effective coverage was dramatically refigured by infrastructural, political, and textual forces on the ground. And the Chinese case serves as an instructive example.

At the infrastructural level, initial expectations regarding a pan-Asian market were dashed by the cultural and linguistic diversity of audiences and tough competition from local and national broadcasters. Likewise complexity of product distribution networks on the ground undermined the possibility of expansive advertising strategies in the sky, since advertisers only wanted to pay for airtime in markets where their goods were available. In the end, they preferred targeted ad buys over pan-Asian appeals.

At the political level, Murdoch found the Beijing government was far more complicated than popular conceptions of authoritarianism might suggest. Chinese leaders could initiate sweeping changes to media policy on relatively short notice, yet such policies were executed with significant discretion at the local level, forcing Star to expend considerable resources currying the favor of provincial officials in a bid to gain carriage on their new cable systems. Moreover, within the national government many factions vie for power, ranging from reformers who are bent on experimentation to guardians of Mao’s peasant revolution. In such a context, global capital can at turns be welcomed as a productive force or reviled as an exploitative foreign element. Star’s image has repeatedly shifted with the political winds and Murdoch has periodically been chilled by the breeze.

At the textual level, Star has been forced to refashion and multiply its services, carefully targeting audiences and branding its products to fit the competitive environment in local media markets. Rather than appealing to a pan-Asian audience or even a pan-Chinese audience, Star has had to content itself with carving out market niches and surprisingly, one of those niches is as a venue for serious political talk on its joint venture Phoenix channel, aiming at an audience of only 140 million viewers in the eastern part of the mainland.

These three levels press relentlessly on News Corp’s Asian satellite services, as they attempt to strike a balance between economies of scale and the local particularities of existing media markets. Star’s delicate balancing act is at work in other countries and markets, as well, such as India, Indonesia, and the Philippines. Since Murdoch first purchased the five-channel satellite platform, he has multiplied its services at an astounding rate, so that the company now manages 19 brands on more than 60 satellite channels. Rather than a singular pan-Asian juggernaut, Star instead provides a host of niche services targeted at a diverse range of viewers, and the sum of the parts still does not add up to a consistently profitable whole.

Such uneven performance is no doubt troubling, for Murdoch’s stated ambition is to put together the first viable global satellite network and then float a public stock offering in hopes of recouping his company’s massive investments. An important part of that portfolio will be Star and Phoenix, but many media executives in Asia confidentially wonder if either service will prove profitable over the long run. Indeed, to witness Murdoch kowtowing to Chinese leaders, currying the favor of provincial bureaucrats, and pandering to nationalist sentiments of Chinese audiences seems indicative of his anxieties about the future of his Asian ventures. Such uneasiness should no doubt invite revision of the cheeky characterization of Murdoch’s generosity at the outset of this essay, but it should also encourage us to reconsider simplistic notions of power that paint Murdoch as an omnipotent global media baron.

News Corporation
Media in China blog
Inside China

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One comment

  • Michael Curtin’s observations constitute the second time in two issues that Murdoch’s global media ownership has the focus of a Flow article (see John Sinclair’s article in the Volume 1, Issue 4 archive). Serving as a welcome counterpoint to the former piece, Curtin exposes how even Murdoch, who has experienced seemingly unlimited success in the U.S., is meeting with multiple obstacles when trying to make a pan-Asian TV system successful for News Corp. While this type of resistance seems promising, I wonder if it may only be a matter of time before Murdoch’s pandering to China leads to more profitable operation?

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