Why Rupert Murdoch’s plan to rule the media world still needs newspapers

Rupert Murdoch’s latest bid for empire expansion has fallen on deaf ears. His offer to buy Time Warner for US$80 billion was resoundingly rejected by the owners of CNN, HBO and Warner Brothers. But despite the setback, Murdoch’s apparent willingness to sell off CNN to satisfy regulators (should a bid be accepted by Time Warner) reveals something significant about how he values news assets. It is reminiscent of a similar undertaking he made in respect of Sky News, before the phone hacking scandal got in the way of his plans to gobble up BSkyB.

The curious question is this: why is Murdoch seemingly so willing to do away with broadcast news channels that are both profitable and growing, yet so insistent on holding on to his newspaper assets dogged by scandals such as phone hacking or the collapse of the Tulisa Contostavlos drug trial and showing no signs of turning the tide of structural decline? Clearly, this is not a commercially-motivated decision. It’s more likely something to do with the perceived political leverage that newspapers continue to wield, in spite of dwindling advertising revenues.

This much became abundantly clear at the Leveson hearings when even the former UK prime minister, Tony Blair – who, like his predecessor Margaret Thatcher, managed to avoid ever falling out with Murdoch – acknowledged that “certain of the newspapers are used by their owners/editors as instruments of political power, in which the boundary between news and comment is deliberately blurred”.

But it’s not just about Murdoch, and it’s not just about the tabloids. The Russian billionaire owner of the Independent and Evening Standard wrote the following tweet after giving testimony to Leveson:

Forgot to tell #Leveson that it's unreasonable to expect individuals to spend £millions on newspapers and not have access to politicians

— Evgeny Lebedev (@mrevgenylebedev) April 23, 2012

Unlike his British peers, Evgeny Lebedev is evidently less coy about the nexus of corruption that exists between the press and politicians.

Yet in their submission to the Lords inquiry into media plurality earlier this year, News Corp noted that “the significant proliferation of direct channels of communication for information, consumers are exposed to an increasing variety of [news] sources”. Indeed, newspaper owners have long argued that they neither seek nor possess political influence through their titles. They regularly commission research by marketing consultants to “demonstrate” that media plurality is vibrant and ever more so, and the days of press baronism are a thing of the distant analogue past. Both the Murdochs and Daily Mail owner Viscount Rothermere were at pains to stress to Leveson that they considered editorial independence to be “good for business”.

Amid this rhetorical trickery, digital disruption is hailed as at once the biggest threat to the commercial news industry and the greatest saviour of media plurality. It is a kind of double speak that political spin doctors would admire and is being used to argue against tighter regulatory scrutiny of media ownership.

But in reality of course, newspapers do still wield immense power. Most national titles are reaching greater audiences than ever before courtesy of their online editions. Digital intermediaries like Google may have attracted advertisers away from newspapers, but they are not competitors when it comes to the news agenda. Rather, newspapers have become dependent on search and social media as drivers of traffic to their websites.

Measuring actual influence – rather than traffic numbers – is a very difficult thing to do in practice. Decades of audience research has consistently found media influence to be uncertain and variable. But we do know enough to know that the extent of media power cannot be ascertained from the rather shallow survey data cited by commercial media lobbyists. They tend to infer, for instance, declining influence from the proliferation of news sources. But survey respondents might cite Google as a news source even though they are actually consuming content provided by established media brands that appear as snippets on Google’s listings. Nor can such data account for subtle distinctions in the ways in which people consume news which can have far reaching consequences for the extent of influence. I might get my news first from social media but only form my views once I read about it in the Daily Mail or on the BBC. Does that mean that my diversified consumption reflects a waning of traditional media influence?

Ofcom’s own data shows that news consumption online is heavily concentrated around dominant media groups. Moreover, we know from Leveson that there is a strong perception among political actors that newspapers do still matter and continue to have, in the words of Tony Blair, “a very deep penetration” among the British public. It is simply not sufficient for newspaper groups to argue against fixed ownership limits on the basis that politicians’ estimation of media influence may not tally with their own. The damage to plurality and democracy is caused by the perception itself which is directly related to size and clearly exploited by media proprietors.

I am not suggesting that ownership limits should be imposed simply because politicians “think” that media owners have too much power. The problem is concentration itself which gives rise to the kind of endemic institutional corruption between media and political elites disclosed at the Leveson hearings. My point about perception is simply that concentrated media power can be a problem for democracy in facilitating influence over politicians, somewhat independently of influence over audiences.

The bottom line is this: there is a reason why owners of smaller media groups do not – like Murdoch – get regular invites for tea at number 10 (and leave by the back door), or – like Rothermere – get to spend “private” weekends with the prime minister at Chequers as he did last year.

The reality is that whether or not consumption or exposure diversity is improving or getting worse (and we can cherry pick data to argue the case either way), size matters in respect of media power. If we are to place any value on democratic health as opposed to just competitive health of media markets, then we need real plurality reform to address the real and existing accumulations of that power.

Author

1. 

   Justin Schlosberg

   Lecturer in journalism and media at Birkbeck, University of London