Hulu was tagged as a YouTube challenger, but one visit to its site tells me that is not the case, and that was confirmed by CrunchBase , which wrote...
Hulu is NBC Universal and News Corporation’s online video joint venture. The site is set to launch in the Fall around October and will focus on professional content and not take on YouTube directly as a viral video destination. The site raised $100 million in financing from Providence Equity Partners.
Hulu videos will be played in their own embeddable branded player. Content from at least a dozen TV networks and two major film studios is promised. Initial distribution partners include AOL, Comcast, MSN, MySpace and Yahoo.
Jason Kilar, hulu’s CEO, explains “Objectively, Hulu is short, easy to spell, easy to pronounce, and rhymes with itself. Subjectively, Hulu strikes us as an inherently fun name, one that captures the spirit of the service we’re building.” However, we’re not so sure it was the wisest name to pick.
It's rumored that News Corp./NBC have acquired Bejing-based startup Mojiti and will use its platform for the basis of Hulu.
NBC has always tried -- and failed -- to capture the Internet for it's use. This is the latest go around. NBC misses the boat because it is trying to use Hulu as a basis for its TV shows, even charging for each episode. That news left this blogger to say...
"NBC executives are crazy if they think I am going to Pay $5 an episode for TV Shows. I live overseas, but will happily ban watching any and ALL NBC shows. $1.99 per show or less than $35 a season is not bad. I hate to see what else they are going to do."
And that's the point. NBC executives are crazy. The problem is no one's telling them so. Look, if you've got TV programs no one will see on TV, people aren't going to rush to see them in droves online. NBC was bitching about iTunes and only making $15 million but that's because few people knew NBC shows were on iTunes. Plus, for those that did go to iTunes, they had a chance to get other content, not provided by NBC. That's all NBC's fault that they didn't work to promote their iTunes presence. Tisk.
I mean how stupid is this. You have this great way to tell millions of people about something at once, and you don't use it. NBC did not tell its viewers about iTunes on a consistent basis, and so it failed. No big surprise to me. And guess what. NBC's going to repeat the error with Hulu.
In a move that's rocked the media world, Rupert Murdoch, chairman and chief executive of News Corp, which in turn is the holder of organizations like Fox, My Space, Direct TV, and of course a dizzying number of tabloids, has just purchased the Dow Jones Corporation, which in turn has the famous newspaper The Wall Street Journal.
Murdock has made no secret of his desire to have the Wall Street Journal in his basket of media companies. To better understand what Mudock intends to do, two Wall Street Journal reporters sat down to talk with the media mogul about the then-in-progress deal to by Dow Jones and by relation, the WSJ. But before I get to that, here's my take on what Murdock's purchase of the WSJ means.
Quite simply, I don't think he's going to try to mess with the journalistic integrity of the paper. But I do think the WSJ's Internet presence will improve dramatically, with (perhaps) blogs and social networks and perhaps video. It's at the very least a logical move. PBS Commentator Bill Moyers has a take as well, one more onminous than my own. Here it is on video:
Now, here's the WSJ interview, which I took from WSJ.com.
WSJ: We have a lot of things to ask you about in your whole career -- it would be a good opportunity for you to talk about your role as a newspaper proprietor and your philosophy and how that has evolved over time.
Mr. Murdoch: I've been a newspaper person since I was a baby, practically. I found it riveting. I just love newspapers, and that's not any exaggeration. And the frustration of my life has been as the company has grown bigger, and we've taken opportunities, I've had less time to pay any detailed attention to them.
We've just had two miserable weeks or three… doing budgets for every single division of the company.
But my father wrote in his will that… he had gone to the trouble to buy [the paper in Adelaide, Australia, the Adelaide News]… so that I would have the opportunity to do good. The quote is available. I've tried to bring up my children with that sense, too. And none of them, certainly the three middle ones, have never thought of a career other than somewhere in media, just because they saw the sort of the life I've led and the excitement of it. And they're all very hard workers, so I'm pleased about that.
How do I see newspapers? You have the opportunity to make a difference. But any difference we make today is providing more choice. We've kept papers alive for years or part of them… took the losses for 15 years or more to develop franchises to give people alternatives.
We've done it with the Australian, the Times in London -- and no one can say that they're not today very, very fine newspapers.
WSJ: Some have described that in the '60s, you were in the newsroom of the Australian and talking to reporters about a story and saying, "That was a great story today and why don't you look at this angle?" I talked to somebody who said to me you're like an enthusiastic news editor who sometimes would get an idea in his head, and it's sometimes hard to persuade him the story wasn't there.
Mr. Murdoch: [Laughter] That's probably true. A long time ago. That was 40 years ago when we started the Australian. And I managed to spend for a few months, about half my time there. Even there I spent half the time on the phone talking to people at other parts of the company. We made plenty of mistakes trying to find our way at the Australian. Plenty of mistakes.
WSJ: At the New York Post you were editor in chief. Wasn't that your title when you first bought it in '76 or so?
Mr. Murdoch: I was going to say it is now, but it's not. It has been at some stage.
WSJ: Is it a sign of how much more involved you were?
Mr. Murdoch: Look, when a paper starts to go bad and go down the drain, the buck stops with me. Shareholders don't ring the editor, they ring me. And that once or twice has led to very unhappy but necessary decisions. I made mistakes but had to change them. It's been very seldom.
WSJ: Can you specify which ones you mean? Do you mean Harold Evans, who you made editor of the Times of London when you purchased the paper in 1981?
Mr. Murdoch: Yes, specifically Harold. He'd made a great name for himself at the Sunday Times…. I was a big admirer of what he had done there, to put that sort of energy in the Times. And he has great expertise in many things -- a great editor of a story. I was warned by two of the national directors to have him not to do it. And it's too long a story, but it ended up A) costs out of control B) the paper changing its policy day by day -- atomic submarines and whatever they were talking about... and the issues were then we had which cabinet ministers had been at lunch which day. Harry is not a strong… I don't want to say libelous things. It ended up with a journalist coming to me and saying, "Look, this can't go on" and that "more than half of us are going to take a walk," and so we had to part company. And he decided to write a book with I would say a tremendous number of inventions. It's OK. People feel the need to justify themselves. Harry was and is remains a very gifted person in many ways … I don't want to defame Harry at all.
WSJ: I want to ask about the independent board in London. You said in your letter to the Bancrofts that you would set up a structure that was "exactly along the same lines" as you did at the Times and Sunday Times. You have now mentioned a couple of times Harry Evans and the independent national directorate. I want to ask you that because one of those rules that you set up was that you would not get involved in staffing decisions. That the board would have veto power over the hiring and firing of the top editor.
Mr. Murdoch: That's right.
WSJ: We talked to a guy named Fred Emery. Emery says that you called him into your office back in March of '82, said that you were considering firing Harold Evans. He said he was shocked and reminded you of this promise that was embedded in the bylaws of the paper, that the independent boards had to approve this. He says you told him that "God, you don't take all of that seriously, do you?" And he said "of course we do" and that you laughed and said, "Why wouldn't I give instructions to the Times, when I give instructions to editors all around the world." What is your response to that?
Mr. Murdoch: I don't remember. I do remember actually a conversation with Fred and it did not go that way at all, according to my memory. That he was extremely critical of Harry, and in fact, I did go to the national directors before I spoke to Harry.
WSJ: I want to ask you about the structure that existed there.
Mr. Murdoch: That still exists. I understand you've checked up with the directors themselves and checked up with the editors.
WSJ: Those who would speak to us. A number of people that we interviewed who were editors at the Times not just in the Harry Evans era, but even after, up to 10 years, describe the board as ineffective. They can't really think of anything it's ever done.
Mr. Murdoch: I guess they never had any complaints to take to the board.
WSJ: We know of at least one complaint that the board handled that I spoke with a director about.
Mr. Murdoch: Really? What was that?
WSJ: Jonathan Mirsky who was working in Hong Kong.
Mr. Murdoch: I wasn't at any board meeting about that. But I know who Mirsky is.
WSJ: He complained publicly that his stories were being spiked. He told us he didn't even know there was a board. I spoke with one of the board members who said because they learned about that, they decided to investigate. He said they called up the then editor of the Times, asked him if he received outside pressure to spike these stories. He said, "No, I did it on my own." And they said, "OK, that's it. That's the extent of our mandate. We're only responsible for protecting the editor."
Mr. Murdoch: The editors decide if stories aren't that good -- they decide that about a lot of stories they spike.
WSJ: Doesn't that suggest the board's power is quite limited?
Mr. Murdoch: Not at all.
WSJ: Since you pick the editor.
Mr. Murdoch: They have to approve. And they interview the editor before he's appointed.
WSJ: They didn't even interview Mirsky.
Mr. Murdoch: You talk to Robert Thomson [Editor of the Times of London] about Mirsky. He's got very strong opinions on the subject. You see what he has written about China in the last two or three months.
WSJ: Do you feel the board has been effective over the past 26 years?
Mr. Murdoch: They do what they're meant to do. They meet four times a year, maybe six times.
WSJ: Four times.
Mr. Murdoch: Four times. OK. You know more about it than I do…. It's quite a large board, but within it, there are six what we call national directors. They are people I haven't met before they've been on.… But basically people I don't know ... They have the right to say, 'No, we don't want that person appointed to the national directorate with us.' They pretty much pick themselves. That's my understanding. Maybe we submit names and they pick one of them or something. And they meet with the editors, the two editors, I believe, separately. There is a bigger board of which they are part of, and they get reports about circulation and trading balances and so on. That goes on for about an hour. Also on the board are two journalist directors that the editors choose, who report back to them what's been said.
WSJ: Are you on the board as well?
Mr. Murdoch: Yeah, but I don't often get there. I'm here.
WSJ: So there are two journalist directors picked by the editors?
Mr. Murdoch: Yes. And then there's a bunch who are senior executives in the company.
WSJ: Are you going to finish the thought in terms of their effectiveness?
Mr. Murdoch: Well, they're pretty limited in what they can do because it's a subsidiary board. We don't go to them to say we want to spend $200 million in putting in a new color plant in order to satisfy the color demands of Sunday Times. We'll tell them about it.… They don't get into business judgments.
WSJ: What is their role?
Mr. Murdoch: They're there to protect editors if the editors feel they need protection. From me or from anyone of the management.
WSJ: Lord Biffen approved…
Mr. Murdoch: He wasn't on the board.
WSJ: He was the British government official who approved the deal -- he was the one who decided not to refer your purchase of the London papers to the monopolies commission -- in exchange for this resolution…
Mr. Murdoch: No. Well, yes and no. All these things had been in existence, they were put in by Thomson [the Thomson Corp., the previous owner of the Times and Sunday Times of London]. What he did was he made actually part of the law of the land. He put it through Parliament.
WSJ: We talked to him and he described it as a political "fig leaf." And said the only reason that this was done was to shield the government from criticism that it was giving you too much power by giving you the two most prestigious papers in the country, given that you already owned two other papers. They didn't consider these very promises important. He said he was ordered to do it by a civil servant. It was really a political cover and that's why they did it.
Mr. Murdoch: I can't comment on that. I don't know.
WSJ: How would the Journal board work? Would it be exactly the same?
Mr. Murdoch: That's what I'm suggesting. I'm told they'd come in with suggestions to me, so I don't know.
WSJ: Who would appoint the members?
Mr. Murdoch: I would have thought that it would be part of negotiations almost, who the first board would be, right? And then it would just roll on from there.
WSJ: What are you looking for?
Mr. Murdoch: People with absolutely no business connections to me nor the family. The family's selling out. They can't sell it and keep it. I have all the respect in the world for them, but you can't have it both ways. I can't put down $5 billion of my shareholders' money and not be able to run the business. That doesn't mean changing the editorial. We have no plans to change anything in the editorial.
WSJ: Do you mean the news side?
Mr. Murdoch: Both. I think the two-headed arrangement works fairly well. There are obviously -- sometimes when they're on different sides, but that's all right. It's part of the character of the paper.
WSJ: You wouldn't change the editor?
Mr. Murdoch: No. Or the news editor. I don't know [Managing Editor] Marcus [Brauchli], but I know he's a friend of Robert Thomson [editor of the Times of London]. And I've heard very high recommendations.
WSJ: What would you do with the paper? The New York Times quoted you as saying the stories on the front page are too long.
Mr. Murdoch: I didn't. Let me say this. I said I was frustrated by the fact that so much of the good stuff I just didn't get time to read, I found myself keeping, putting sections of the paper aside to read when I got home at night, and not getting around to it. That's my incapacity as a slow reader, perhaps.
WSJ: But you are spending $5 billion to buy the paper.
Mr. Murdoch: I think it's a big opportunity in the digital area…. We've never seen such an expansion globally around the world.
WSJ: Norman Pearlstine said you had said that if you succeeded, you would give up your job here for a year and spend the time at the Journal. It was in the Los Angeles Times.
Mr. Murdoch: I have said in the past, you know what I'd love to do is retire and be the full-time chairman of the Journal for a few years… but I've got too many responsibilities here and everywhere else.
WSJ: Tell us what you would do… Are there changes you would like to see at the Journal, improve it?
Mr. Murdoch: Not at all.
WSJ: Some people would say the front page might be boring.
Mr. Murdoch: The front page is not boring. Absolutely not.
WSJ: Then what's the opportunity for you? Digital?
Mr. Murdoch: I think it's in the digital area, digital and TV. And I think we've got to pour some money into digital. We've got to do a lot of things there… There's so much going on on the Internet. We've got to find new ways and new business models to get revenues. Or else the world is going to be owned by Google. I was asked at this investment thing I had to go to, what competitors I see I would have in five years time. Globally. I said I'm sure they'll be a lot of them. I know one is Google. It's just getting so strong, so powerful. And I know the guys, and like them. They're friends of mine. But it is a big fact of life. They sort of just hit the mother lode of search advertising and they're just destroying Microsoft search, hurting Yahoo's and making others irrelevant. I don't understand the technologies but whatever their technology is, it seems to be producing a much higher margin of profit. What are they going to do next? I saw in the New York Times today they're devising certain, a lot of computer applications which would directly challenge Microsoft, which they'll give away. So it's going to be very interesting. Four or five years ago we were all convinced Microsoft was going to take over the world. Now we're all convinced it's Google. But that's another subject.
The Internet is a great leveler. All newspapers count for less these days. So … as far as I'm concerned, I want to drive News Corp., as I've said, into being the greatest content company, whether it's in news, opinions, writing or whether it be film or television. I mean there are so many new pipes in how you deliver these things. And so on. We'll just have to use them all and see what's economical. I had a study done, and I think you've had many more studies done down there. What if they made The Wall Street Journal free instead of charging 80 bucks?
WSJ: You mean WSJ.com?
Mr. Murdoch: You'd have 10 times as many visitors and lets say five times as much advertising. But you'd lose the other, it works out at about a push…. So, the problem with a regular newspaper is how do they replace or hold their revenue models. It's not all been about the Internet. Change of lifestyle, people's time. Circulation really has been going down for 20 years before the Internet. And on top of this, in this country you have the impact of the discounters. The Targets and the Wal-Marts and what they've done to the department stores… So what's happened at papers like the LA Times. Used to see pages and pages of five different department stores. Now you get a couple of pages from one … We'll see how Mr. [Sam] Zell handles that.
WSJ: So no changing of editors then and you would leave existing management in place. Would you call them up and talk about the news of the day?
Mr. Murdoch: I'd love to wander around. I'm not going to have much time to do it. I find people quite like it if I show an interest in their work.
WSJ: How do you view the business side and the news side, and whether there's a separation or a wall between them so that when The Wall Street Journal covers News Corp., would that change?
Mr. Murdoch: There's an absolute wall. I just ask you to spell my name right Have a look at the reviews of Fox films in the Post. You can be sure that every one gets slammed ... Do they try to help our business interest or not? The answer is no.
WSJ: There seems to be other examples. The Daily Telegraph in Sydney a few weeks ago devoted most of its front page to your announcement that News Corp. would reduce its carbon emissions. The company logo was in the headline and there was an editorial that suggested you were a visionary.
Mr. Murdoch: [Laughter] I don't know anything about that. And we sure didn't do that in the Post, which I'm closest to, hardly got them to notice it. Actually, it's interesting. It caused huge excitement among our staff in Australia and in Hollywood. And a fair bit in London. New York was pretty cynical.
WSJ: Isn't this shilling for News Corp?
Mr. Murdoch: That is, absolutely. Shouldn't be. That's bad.
WSJ: The editor told us he was proud of it.
Mr. Murdoch: They're all crazy greenies over there … Don't say crazy. Extreme greenies. They're also coming out of a 10-year horrible drought.
WSJ: There was the famous 1996 New York Post headline: "Ted Turner: Is He Nuts?"
Mr. Murdoch: Page one? Well, we were in a war …. We're making up at the moment, heavily.
WSJ: Are these editors doing this to get on your good side?
Mr. Murdoch: I don't know who pulled which string, which made Gerald Levin go back on his word, on his promise that he was going to carry Fox News -- and when he walked out on us … We went to war with Time Warner. Why shouldn't Fox News be on? Why shouldn't any news be on? I even put Al Gore's news on DirecTV for which I suddenly became his world's best friend, I think. Because he bought this little thing and that was the only contract they had. He's made it and now he's got it going on Comcast. He's got it everywhere. I believe in a variety of opinions, we're not trying to push one side.
WSJ: You said you went to war with Time Warner. But is using your papers to campaign on your behalf appropriate?
Mr. Murdoch: Probably not. I think it's OK. You're talking about the daily New York Post in same breath as The Wall Street Journal. They're not the same.
WSJ: Do you agree that you were using them?
Mr. Murdoch: You seem to be reminding me of things. I didn't certainly write that headline or doing anything. I am guilty of making jokes that it was time for Ted to go back on his lithium … That's when he called me Hitler or something.
WSJ: You also went after New York Daily News owner Mortimer Zuckerman with the Post. He had that Coliseum dispute with the city. The coverage was a bit excessive and very negative. One headline called him "Suck-up Zuck." It did seem like a campaign against him.
Mr. Murdoch: It certainly wasn't me… there may have been a very worthwhile campaign, that he was taking the city for a ride. I don't know. I've completely forgotten the details. It was a genuine public issue.
WSJ: Another one was U.S. Sen. Ted Kennedy in Boston, when he tried to stick in that amendment to get you to unload the Boston Herald.
Mr. Murdoch: He didn't try, he did.
WSJ: They ran headlines calling Ted Kennedy "Fat Boy." I talked to Ken Chandler who said that this was basically your cause -- that he was the general in this campaign. He said you both share the same world view. He conceded it got personal. A Herald columnist still calls him "Fat Boy" to this day.
Mr. Murdoch: Don't blame me for that what they're doing today. Look, a knock-around tabloid calls a lot of people things. We don't harbor any hatred of Teddy Kennedy or any Democrats.
WSJ: One thing to address, you obviously have a great love of newspapers, but you're also a business man…
Mr. Murdoch: Had to be. I mean, if they're not viable, the papers die.
WSJ: Do you think there is a dividing line -- or ought to be -- between the business side of a news operation and editorial side?
Mr. Murdoch: You've got to try and keep politicians at arm's length as much as you possibly can. When I go to London I'm courted by the leader of the Conservatives and I'm courted by Blair and so on… It really gives you an insight into people. But you mustn't be drawn into a feeling of closeness on a personal basis because they have too much influence on you and your judgment. And that goes for an editor, as much or more for a publisher.
WSJ: Seems to me as a proprietor, you have every right to tell them who to endorse.
Mr. Murdoch: No. I don't think so. I don't do that in London, and I wouldn't do it with the Journal.
WSJ: You did it at the Post early on.
Mr. Murdoch: That's different. I wouldn't at the Journal and I do not do it at the Times. The Times [and Sunday Times], in the election two weeks ago in Scotland came out for opposing parties. The Sunday Times had gone crazy. I didn't know they were going to do it. I wouldn't have spoken to them.
WSJ: We get the sense there's not as strong a dividing line in this area as there is in other companies. Editors feel like they are part of the corporate group. One example in Australia, some of your papers guarantee space to the Australian Football League in exchange for certain advertising rights. Generally it helps them with their relationship with the AFL, and it was mentioned when Foxtel and News as a group bid for TV football rights and won in 2001. The idea of guaranteeing anybody editorial space in exchange for some sort of business relationship is something unusual.
Mr. Murdoch: I have no knowledge of that at all. We certainly would never do that. I didn't do it. If you're saying it happened, I'll take your word for it.
WSJ: We want to talk about how you've changed your role -- in 1972 you helped design ads for the Labor Party in Australia that during the campaign ran in the Daily Telegraph.
Mr. Murdoch: I never got too close to [former Australian Prime Minster Gough] Whitlam, and they would have made a terrific difference, we really poured it on. One of my lessons in life not to get too close to politicians.
WSJ: You don't recall writing the ads?
Mr. Murdoch: I'm not denying it, I just have no memory of that. I might have written an editorial, but I don't think an ad.
WSJ: Why was that a lesson in your life?
Mr. Murdoch: Oh, I think we went a bit overboard [in supporting him].
WSJ: What about in '75 during the very contentious election.
Mr. Murdoch: I think we did a good job of covering it … The whole thing was falling apart… The government and everything was just getting terribly out of control. Gough was always going on extended trips to Crete to look at ruins.
WSJ: The 1975 campaign got a lot of attention. There was a strike.
Mr. Murdoch: …There was a lot of emotion from all sides.
WSJ: Some people have made allegations that you directed people to write certain anti-Whitlam things.…
Mr. Murdoch: No, but there was a very strong editor at the paper, Bruce Rothwell, who was anti-Whitlam. He certainly spiked a lot of people's copy… Reporters, everyone got so emotional they had reporters writing "Whitlam bestriding the nation like a giant" and so on. And he was down to about 30% in the polls and Bruce tried to bring balance into it…
WSJ: Paul Kelly told me he was replaced as political correspondent during the campaign because he had gone public opposing the company's point of view. You had rehired him in '85 to be the chief political correspondent at the Australian and that he went on to edit the paper.
Mr. Murdoch: I didn't personally replace him. I was living here. I remember he did leave and then I remember him coming back.
WSJ: The fact he had to be replaced...
Mr. Murdoch: I don't bear grudges. Not at all.
WSJ: Do you think Rothwell went too far?
Mr. Murdoch: I think he may have been too inflexible. He really was trying to bring balance. High emotion on all sides.
WSJ: The Australian wrote that the campaign set back the readership by 15 years.
Mr. Murdoch: Not true … What set back the readership was that I wrote a story that was a terrific scoop….
WSJ: The Iraqi loans affair?
Mr. Murdoch: Yeah. Absolutely true word for word… My source disappeared when it came to court. But my secondary source lied and later became prime minister, I won't name any names. [Laughter]
WSJ: How many times did you write stories yourself?
Mr. Murdoch: Very seldom. But that caused such an uproar that there was actually an organized boycott and all the schoolteachers, Labor Party members canceled the paper. We lost 10-12,000 circulation and that did take a long time to get back.
WSJ: The controversy was over the story, not that you wrote it?
Mr. Murdoch: It was daring to suggest that Gough had any blemishes.
WSJ: This is before the elections?
Mr. Murdoch: It was way after the election. Because there was a crisis, he'd been promised, he was given cash, which they'd spent, and was promised that they'd get another quarter of a million and they spent that too. Then the ad agency was going to go broke because they couldn't settle with the newspapers which they were under a legal contract to do. That caused a panic, and the guy who organized the meeting, decided to tell me about it. I hardly knew him. I didn't know how to check it out… and I found a secondary source on the story. He was visiting Israel, and he said it's exactly true. I've got to fly home now and get a loan from the bank.
WSJ: Did you put your name on the story? Was it "By Rupert Murdoch?"
Mr. Murdoch: The byline was special correspondent but everybody knew.
WSJ: But that wasn't the only time you wrote a story, or was it?
Mr. Murdoch: Yeah, [the only time] that I can remember.
WSJ: I want to ask about this Birmingham Gazette incident in England. Apparently, you wrote a letter after your internship to the paper's owner.
Mr. Murdoch: All at the age of 19, yeah.
WSJ: Denouncing the Gazette's editor, Charles Fenby, as incompetent, urging that he be fired. His son told us this. He said Fenby kept his job and laughed off the episode. Do you remember writing it?
Mr. Murdoch: Absolutely… I wrote sort of an around-town gossip column type thing… it was very respectable… and the last of my three months there or six months there … but no one ever saw Fenby or anything. I should never have wrote that letter. It was 57 years ago, give me a break. [Laughing] It was correct mind you, what I wrote. I won't take it back.
WSJ: We want to ask you about an episode about Frank Giles, the former Sunday Times editor. This has been recounted many times in books. Even before the deal was closed on buying the Times and Sunday Times, there's this episode where you go in the composing room and you see the editorial being written up and it fails to mention one of the papers that Express newspapers owned. And you pencil it in, and they take great offense. Evans wrote that he scolded you and you apologized profusely.
Mr. Murdoch: It was so ridiculous. We're in a hot metal room… I could see this factual error and I gave it to Harry and said, "Look, there's a mistake in here." This thing that I was seen putting a pencil on a proof. Come on, I was trying to improve it.
WSJ: He also says that despite one of the promises that you would not have anything to do with staffing decisions, that you ordered him to sack the magazine editor.
Mr. Murdoch: No. Frank's gone nuts. He really is losing it. I saw him over the summer. He was very nice. Never. I don't even think we had a magazine at News of the World at the time, that long ago. But certainly, I never did that. A color magazine was sort of the big winning thing that Thomson [Corp., the previous owner of the paper] did. He thought they have them in America, let's have one here. It crippled us financially a little bit … It jumped the circulation of the Sunday Times a couple of hundred thousand. I never did that. Never, never, never.
WSJ: Frank Devine says Ken Cowley, when he ran News Ltd. in Australia, tried to pressure them to not run stories that would hurt News Corp.'s other businesses and Ansett, the airline, is the example that several people bring up. Devine said he thinks he was fired because he wouldn't agree to what Cowley wanted of the coverage of the pilots' strike in '89.
Mr. Murdoch: I don't know about that. At all. I know why Frank Devine was moved, but that's another matter. Frank was a mistake of mine. I love Frank.… I got to know Frank here, Frank had been one of six editors at the Readers Digest… And to put him right into a daily paper. You've got to adjust to the pace…
WSJ: Then why did you also make him editor of the New York Post and the Australian?
Mr. Murdoch: I don't know. I really forget that time. Whether Frank asked to go back to Australia or I thought it was a good move that he was a more cerebral sort of person … I've honestly forgotten.
WSJ: Do you think maybe there was too much of a culture where some of these executives thought they could pressure editors about things that related to other parts of the company?
Mr. Murdoch: No, certainly it wasn't set by me. No and I'm not sure that's true about Cowley. I'm not sure at all. I wouldn't defend the practice.
WSJ: Andrew Neil of the Sunday Times told us when he was the editor, they had a story about British officials preparing to bribe to win a construction contract in Malaysia and this offended the Malaysian prime minister. At the time he said you were trying to sell satellite dishes for Star TV in Malaysia. He says you called him up and told him the coverage was boring.
Mr. Murdoch: I never tried to sell any satellite dishes in Malaysia. I remember the story which they tried to run and run and run. I said, "Are you sure of your facts? Have you gotten a smoking gun here?" I might have asked him that. But I never tried to stop it or anything else. I was surprised at Andrew…. He certainly came out against Thatcher and tried to kill her without a word to me.
WSJ: Do you think that was that a mistake on his part? Should he have asked you first?
Mr. Murdoch: No.
WSJ: Why were you questioning those stories? Why would you care about those stories?
Mr. Murdoch: I want everything to be accurate. I want to produce good newspapers.
WSJ: So there was no business interest for Star in Malaysia?
Mr. Murdoch: No.
WSJ: He says he left his job over this.
Mr. Murdoch: Bull----. Who? Andrew? Bull----. Andrew left years after that … And then he wanted to come to America and do TV here… We made pilots of shows … and showed it to focus … I said to Andrew, "Listen, I'll support you as to the quality of your stories … but you can't be the star and the director. You can be behind the camera or you can be in front of the camera, but you can't have both. And he said, "If that's the case I'll have to go back to England or my public will forget me."
WSJ: Your criticism was over accuracy? Did the Malaysian prime minister complain to you?
Mr. Murdoch: No.
WSJ: We want to ask you about the South China Morning Post. We talked to Seth Faison. When the paper first started the Beijing bureau, he and another reporter say you never interfered, but they say Clarence Chang, who was on the business side of the paper -- in 1988 he was the managing director -- did. They say he was going to Beijing for a business meeting and while there he met with the reporters and complained to them about a column they wrote that was critical of a spring festival covered on Chinese television. And Faison says Chang told them they should write more upbeat stories about China. He said to them, it's "good for me, for you and it's good for Rupert." The reporters said they ignored the appeal.
Mr. Murdoch: Good.
WSJ: You don't approve of telling reporters to write positive stories?
Mr. Murdoch: No.
WSJ: Why did you sell the paper?
Mr. Murdoch: Because I saw what was coming… There would be pressure from Beijing every day. And I think it's just about driven the poor guy who bought it mad although he's got big interests in China… they've now got someone from Xinhua sitting outside their office…. It was a very profitable paper.
WSJ: Was that a problem in terms of expanding in China?
Mr. Murdoch: That was never part of the plan … The decision to sell it was to get out ahead before any pressures came from anywhere. We never had any policy pressures on us there at all.
WSJ: So you saw it coming. But was your ultimate concern down the road that to do battle with Beijing might be bad for your expansion plans in China and you wanted to avoid that?
Mr. Murdoch: No. We don't really have any expansion plans. We have a little channel in China … in Shanghai which is officially allowed onto two or three cable systems. I think we've managed to get the losses down..
WSJ: Things haven't gone great for anybody?
Mr. Murdoch: For anybody. Ask Google.
WSJ: Tell us about why you dropped the BBC in China on Star TV.
Mr. Murdoch: Totally separate issue, two different things. The BBC was very simple. We bought in a battle with Pearson, actually, because we were partners in Sky and not getting on at all. They turned up trying to buy Star and I went in fairly blindly … and it was losing $100 million a year, and they were putting out these channels over Asia all in English … So was MTV, and so was Prime Sports. And so on. I mean how are you going to get an audience in English? It's ridiculous. I said how are we going to pay BBC ten million dollars if they get billions of dollars in taxpayers' money? They're trying to kill us in England. Let them pay their own way. The service goes on uninterrupted as far as I know. But at their cost …
WSJ: We spoke with Gary Davey who was then head of Star TV in Hong Kong. He said one issue was that the BBC station identifier showed the Tiananmen Square episode and it was a constant reminder. He said you were emphatic about dropping the BBC.
Mr. Murdoch: Primarily a financial consideration. But it might have occurred to me, this might have not hurt relations with Beijing. At that stage, I had not been received by a single minister or anyone. They had a report from Xinhua that when I had the South China Morning Post that I was a member of MI6 or MI5 [British intelligence agencies]. So no one was allowed to see me. We just had a total blackout for five years.
WSJ: And the book by Chris Patten, the former Hong Kong governor?
Mr. Murdoch: Look, we reject books all the time, publish too many, not politically, don't get me wrong. Everyone's publishing too many books to get any space in Barnes & Noble or anywhere. The Chris Patten book, when I was asked about it, I said … "I just think that he was a terrible governor down there… And he was going back on everything that Thatcher had said … he was trying to change the status quo ... But the editor fell in love with it and the manager never had the guts …. It was just finding another publisher. We weren't suppressing it, in any sense. On the other hand, in retrospect, it would have made a whole lot less fuss if we just let it go on. A mistake.
WSJ: Your personal representative in Beijing said you thought the book would set you back and to "kill the f------ book." Did you think it would set you back?
Mr. Murdoch: No. No one in China ever spoke to me about it. I was never put under any pressure.
WSJ: We'd like to come back to an important point. What's the difference between the Post and the Journal?
Mr. Murdoch: I feel more restraint at the [London] Times than I would at the [New York] Post and so on. Let me give you another parallel: London. I walk around the Sun office a lot more than I walk around the Times office. And talk to the editor a lot more, I don't say do this and do that. But she'll come into me and say Gordon Brown called me today about such and such and what do you think? And I'm probably therefore a little bit more involved.
WSJ: Why is that?
Mr. Murdoch: Because they don't have any restraints on me. That's all I'm saying. That would make this more of a parallel, you know. And I'm quite unashamed, I enjoy popular journalism. I must say I enjoy it more than what you would call quality journalism. I used to bait my friends in London by calling it the unpopular papers. That's before we got the Times.
WSJ: You personally like The Journal, don't you?
Mr. Murdoch: It's absolutely my first paper, the Post is my second…. What worries me is people not reading newspapers, they have like My Yahoo… I couldn't live with that -- at least scanning three or four newspapers in a day. And my head's full of useless info, but some of it turns out useful occasionally.
WSJ: The Guardian's Sunday newspaper, the Observer, in London reported that you would appoint Robert Thomson as publisher of The Wall Street Journal. Is that true?
Mr. Murdoch: No. I haven't thought about it. New idea to me. All I've heard about [Wall Street Journal Publisher] Gordon Crovitz is that he's this brilliant man.
WSJ: So does that mean you wouldn't appoint Thomson as publisher?
Mr. Murdoch: I've never thought about it. And I would imagine that Gordon Crovitz would stay there, I don't know. I understand that they've all been given golden parachutes or something. Or change-of-control bonuses of several millions. But I don't know what it adds up to.
WSJ: DJ stock is trading at around $61. That's above your $60 offer. Are you prepared to offer more?
Mr. Murdoch: No, no. Everyone thinks that $60 is a terrific offer. Most people think I'm stone crazy….
WSJ: So you're not willing to raise it, under any circumstances?
Mr. Murdoch: No. Right. Look let's go into a negotiation and let's see. I'm not willing to negotiate it. I'm not willing to discuss it any further. I don't have any secret plans to pay more.
WSJ: But you could easily afford to pay more, no?
Mr. Murdoch: I'm not holding a charity, I could afford to give more money to charity. But are the Bancrofts the best charity in the world, I don't know.
WSJ: We heard that you've been having ongoing contact with different members of the family since some time last year.
Mr. Murdoch: I haven't personally.
WSJ: Through representatives?
Mr. Murdoch: Various people, yeah.
WSJ: You told people last year you couldn't do a deal right then because of Liberty Media Corp. But you were trying to gauge the interest.
Mr. Murdoch: If I'd said that at the time that would have been true. I just don't remember…. I've never spoken directly but someone might have been. You won't get a denial from me.
WSJ: On behalf of our colleagues, you say that retaining the team of journalists, editors, management would be a key priority for News Corp. What would you do to retain the team?
Mr. Murdoch: Huge raises for everybody. [Laughter] I'd have to see when I get in there. But I would have thought that the editors who are there in the different areas from what I've heard have the support of their staffs and I will try and build that up. You've got to have really strong leadership and excitement and things going. That's also got to go on the business side because they've got to get some more advertising. I mean the profit of The Journal is very small if you look at the reports. Those silly little Ottaway papers make more than the Journal does.
WSJ: So you would focus on generating more ad revenue?
Mr. Murdoch: Yeah, or and electronic everything, circulation, anything. The Journal has had no money spent on marketing that I'm aware of for years. I imagine whatever we do would take the profit down in the short term… I mean of the Journal… It's got to have money put back into it, particularly on the digital side.
WSJ: If you want to raise circulation immediately some people would assume you would try to liven up the Journal.
Mr. Murdoch: No, no, no. I want to do some due diligence. I don't even know exactly how many printing plants you have. Or how many you own… or anything.
WSJ: An important issue: If The Journal were to do stories about your other interests -- and they were stories that you didn't like -- how would you deal with that? Would you expect to be informed about what we're writing?
Mr. Murdoch: No. I'd complain like hell if they were incorrect. I would imagine I'd know because you would have been questioning me like you are now. But you'd have to run what you like. The only thing I complained about is when they attacked my wife. And as Paul (E. Steiger, former managing editor of The Wall Street Journal ) said in a public statement, nothing unusual about it [my call to the paper], and nothing inappropriate, was said.
WSJ: Would you take any action against the people who wrote that story?
Mr. Murdoch: No. They're gone.
WSJ: But some aren't.
Mr. Murdoch: Well, then don't tell me what their names are. I know what motivated the story … I'm sensitive.
WSJ: Some people have said that if you buy The Journal, there would be a perception if we did a story about Viacom or Time Warner that you would be behind it. Even if we would have run a story anyway.
Mr. Murdoch: I tell you if you do a story about Viacom, I'll have … [chairman Sumner Redstone] on the phone for two days running. But I won't even tell you about it… What if you do a story on Fortune Magazine or Time Inc. or whether you do a story about the New York Times, you do it all the time, people can say the same things about you, right now.
WSJ: No one would dispute that in the history of journalism, you're a major, major figure. But there's quite a few people who feel you're not a positive figure. Does that bother you?
Mr. Murdoch: No… I've been around a long time. I've got a thick skin.
WSJ: When Fox News launched there was a double-page spread in the Post talking about this great new channel. Would that have been something that you asked them to do? Or would that have been something they would have done on their own?
Mr. Murdoch: I think they would have done it on their own. We're all in it together. We're a pretty close company. They didn't do it to say, "Let's suck up to Murdoch or this or whatever." They'd like to see it succeed probably. I don't remember.
WSJ: You wouldn't use The Journal in any such way to promote the launch?
Mr. Murdoch: No. Now I would imagine that the launching of a major news channel would get noted.
WSJ: Do you think you'll face any competition for Dow Jones?
Mr. Murdoch: Not from anybody that I've seen mentioned yet. I mean, if someone like Google comes in and starts throwing around their funny money, who knows But I don't think. Look, the country's been combed…
WSJ: So are you confident at this point that it's yours?
Mr. Murdoch: No. I'll see what demands they make at this first meeting. If they're reasonable, then they should be OK. And Then we'll see what they go into… There has been so much publicity, I don't think it's necessary to put an investment bank on this for two months looking for other bids, and I think that would create an uncertainty about the whole company which would be bad for the company. But you know, they'll do what they will do.
WSJ: The Tribune company was shopped around for quite a while.
Mr. Murdoch: Yeah, but there weren't any buyers.
WSJ: There was one in the end.
Mr. Murdoch: For $90 million. Risk. That's in the figures …
WSJ: Why didn't you do it?
Mr. Murdoch: Don't want to spend the rest of my life going through that, getting rid of people, ugly. I think they're in decline, they can fire a few hundred people everywhere, save a couple of hundred million dollars ... I guess they will have a billion a year to pay down the debt, that's what it sounds like. No, a bit less … I would have thought that, although the decline in readership … will probably go on…
WSJ: They're all going to MySpace.
Mr. Murdoch: I wish they were. They're all going to Facebook at the moment.
