Business and the media with Rupert Murdoch

Peter Robinson: Welcome to Uncommon Knowledge. I’m Peter Robinson. On the unexpected death
of his father, Keith Rupert Murdoch became the proprietor of the Adelaide News a the
age of 22. Today, some five and a half decades later, Rupert Murdoch owns the controlling
interest in the News Corporation, which in turn owns media properties on five continents;
properties that include some 170 newspapers, dozens of television stations, half a dozen
television networks, a publishing company, and a movie studio.
The number of people who everyday receive news or entertainment from a property owned
by the man seated across the table from me is some 200 million. Rupert Murdoch thank
you for joining me.
Rupert Murdoch: Thank you Peter.
Peter Robinson: We’ll talk in a moment about your underlying approach to business, but
first one perfectly straightforward question. When in July 2007, the News Corporation purchased
Dow Jones, you paid $5 billion or $60 a share which was premium of about two-thirds over
the share price before news of your offer became public. Why was Dow Jones worth $2
billion more to you than it was to the market? Why did you see value that the market didn’t
see?
Rupert Murdoch: We saw in the Wall Street Journal, and in the whole business of financial
information. You know, a great central franchise there, and something that we could develop
as a national newspaper that could be unique in this country. And that’s what we’re
still working at very hard. And the fact – but the price was it was a bit of it
– like us, a bit of it was held by, in voting shares.
Peter Robinson: Right.
Rupert Murdoch: By a tight family that turned out to be not quite so tight. And we, to get
them to break or to move, you know, $6.00 was the sort of magic number.
Peter Robinson: I see.
Rupert Murdoch: Per share.
Peter Robinson: But, well of course, since you purchased, the advertising world has collapsed
and….
Rupert Murdoch: Yes, it was different times.
Peter Robinson: Of course it was different…
Rupert Murdoch: I mean today they would have been giving it to you probably.
Peter Robinson: So, but no regrets about the purchase or the price you paid at the time.
Rupert Murdoch: None at all.
Peter Robinson: All right. Segment one: On the Cusp. Rupert Murdoch, February 2010. I’m
quoting you. “The News Corporation is on the cusp of a digital dynasty. Content is
not just King, it is the Emperor.” Explain yourself.
Rupert Murdoch: It’s funny, because see, Steve Jobs was in yesterday sharing his new
iPad. And I went through that with him again. I said, “Look you’re going to invent all
these things. And they’re wonderful, brilliant, but they mean nothing if you haven’t got
content to put on them.” And he agreed completely.
Peter Robinson: It’s…
Rupert Murdoch: Yes, you’re going to have iPods, anything you like, if you can’t do
all these – someone’s got to supply.
Peter Robinson: Right.
Rupert Murdoch: The information.
Peter Robinson: Okay. So, I want to get back to the digital world, the electronic world
in a moment. But first let’s go to, to the business to which you’ve dedicated most
of your life. Newspapers, two sets of figures. September 2007, just over a month after your
purchase of the Wall Street Journal. Total paid weekday circulation for the Wall Street
Journal – 2,011, 882. Total paid weekday circulation for the New York Times, 1,000,665.
October 2009, the figure for the Wall Street Journal is 2,024,000, up about half a percent.
Circulation for the New York Times, 927,000, down more than seven percent. And the New
York Times wasn’t alone. Of the ten biggest newspapers in the country, over that period
only one, the Wall Street Journal, increased circulation. How did you do that?
Rupert Murdoch: I think we just kept improving the quality. We didn’t do any special promotions.
In fact we put the price up for subscriptions. But we slowly brought in – widened the paper
and it made it better and more, I think, more reliable. I think I had much greater judgment
now in coverage of foreign news. We have wonderful correspondents. We’ve made – improved
our Washington coverage greatly. We got a long way to go in a lot of areas yet. But,
we want to widen this audience, and specialize in some other areas too, such as health and
so on.
Peter Robinson: And that doesn’t place at risk the franchise of the business information,
the business audience.
Rupert Murdoch: Um-hum.
Peter Robinson: You believe you can retain that audience while broadening it to make
it a truly national newspaper.
Rupert Murdoch: Absolutely. You know, it’s got, it’s called the Wall Street Journal.
Peter Robinson: Right.
Rupert Murdoch: But for 50 years they’ve been saying, “It’s the Main Street Journal.”
It is for the small business owner, or businessman, or person involved in business in anyway,
all across the country. It’s not just for Wall Street bankers.
Peter Robinson: David Carr, writing in the New York Times. Carr says that Robert Thompson,
the managing editor of the Wall Street Journal. And Jerrod Baker, the Deputy Managing Editor,
quote, “The two men have had a big impact on the papers in Washington coverage, adopting
a more conservative tone and editing and headlining articles to reflect chronic skepticism of
the current administration.” Closed quote. Fair?
Rupert Murdoch: I don’t think it’s become a conservative – maybe a little more balanced.
I, if you read into every story, you know, very carefully. You certainly, it certainly
hasn’t become conservative. Were there, in the past, a few correspondents there who
had a bit of a left wing tinge in what, in the way they covered stories? Yes, probably.
Peter Robinson: Can I? According to the Gallup organization, 20 percent of Americans call
themselves liberals, 40 percent call themselves conservative. I think we can accept, given
the various polls that have done, been done, through the years that there is newsroom surveys
that overwhelmingly newspapers in this country are dominated by editors and reporters who
are liberal. Why shouldn’t the Wall Street Journal be quite straightforward about saying,
“We intend to be a newspaper for the rest of Americans, and incidentally that market
is twice as large.” Or is there a danger in being explicit about it? How do you think
that through?
(Crosstalk)
Peter Robinson: How do you think that through?
Rupert Murdoch: We want to be objective, as you, as one can be. And as thorough as one
can be. And we think the rest of the press is monolithically very often unfair. But you’ve
forgot to mention the 40 percent of Americans and to call themselves independents.
Peter Robinson: Yes.
Rupert Murdoch: Now, there are people who don’t like either party. They’re not about
to join the Republican party or – or the Democratic party. This country is, I’d say,
vaguely center-right in mood. And if you look at me, and a few people you might say, “We’re
a little bit more right than that.” But the paper, I don’t think it’s the –
there’s no question that the editorial writer, the opinion pages of the back of the
paper, of the front section. I consistently take a, take a pretty conservative attitude.
They’re never endorse candidates.
Peter Robinson: Right.
Rupert Murdoch: But, they look very skeptically at big government and what’s going on in
Washington.
Peter Robinson: All right. Segment two – newspapers in the electronic age. Let me
quote a golden age of freedom. This is a book based on the Boyer lectures you gave in Australia.
This is not available on Amazon, it’s only available in Australia by the way. Let me
quote you, “I have a simple and provocative proposition. Winging about technology will
get you nowhere. The more serious challenge is the complacency and condescension that
festers at the heart of some newsrooms.” Would you care to name any of those newsrooms?
Rupert Murdoch: I think, no. But I think most newsrooms are very concerned with loss of
jobs, loss of circulation, what’s happening, lots of readership to the Internet. And don’t
see really what they are. Newspapers seen as tangible tactile things.
Peter Robinson: Right.
Rupert Murdoch: I think we’ve got to look at these organizations as news organs, and
news organizations so that we don’t mind how our words are read by the public. Whether
they’re on the new iPad or the Kindle, or other things that have – are coming –
or, on paper itself. But the words should be the same.
Peter Robinson: All right. Last summer, former CBS anchor Dan Rather. Delivered an address
at the Aspen Institute, during which he actually became teary eyed. Let me quote him. “It’s
time the government made an effort to ensure the survival of the free press. If we do nothing
more than stand back and hope that innovation alone will solve this crisis, then our best
trained journalists will lose their job.”
The government is bailing out the banks. The government is bailing out the auto industries.
Why shouldn’t the government bail out the newspaper business.
Rupert Murdoch: I think you’re talking rubbish and I – and very dangerous rubbish. We don’t
government money in that we want a free press. It’s essential to the democracy that we
have a free, and as far as possible, competitive press. Or competitive information industry
if you will. And you won’t get that if you start having government dollars coming in.
Peter Robinson: Now, you, I am to quote again from the Golden Age of Freedom, “Readers
want what they’ve always wanted. A source they can trust. In short we are moving from
newspapers to news brands.” Explain what you mean by brand in that context.
Rupert Murdoch: Well I think the Wall Street Journal, maybe the New York Times, maybe the
London Times, maybe you know, The Post for that matter are known for what they are. And
read and enjoyed for what they are. And I think they should keep that. And we’ve got
to strengthen those brands very much because as the old printed newspaper becomes less.
Peter Robinson: Right.
Rupert Murdoch: And the new electronic newspaper becomes much more, the cost of entry in the
competition….
Peter Robinson: Right, right, right.
Rupert Murdoch: Is going to be a lot easier.
Peter Robinson: Right, right.
Rupert Murdoch: Which is a great thing for the country, isn’t it. It’s not so good
for companies like mine.
Peter Robinson: Well, that…
Rupert Murdoch: I’ve always said we have to protect ourselves by getting better, and
better. And being trusted in just 100 percent.
Peter Robinson: So, that – I’ve got here today’s New York Post, and The Journal.
And of course you can see in the physical object you’ve got a lot of ways of communicating
the brand. Here’s the, the New York Post, the shape of the paper, the feel of it says,
“tabloid journal.” We’ve got a, a sort of a classy broad sheet and feel. The size
of the headlines, the placement of the photos. And you can just, you can communicate the
brand – the feel of the newspapers, literally, in some ways the feel of the newspaper.
Rupert Murdoch: I love that, I love it but you see it so happens, New York Post, they
are a tabloid, for what that means in America. In fact, we are on exactly the same story,
which is the economic crisis.
Peter Robinson: Right.
Rupert Murdoch: As the Wall Street Journal is, and naturally, being a popular paper,
we’re on about the Super Bowl, which is two days away.
Peter Robinson: Right, right. But when you look at these, when you reduce this post and
the journal to the iPad that Steve Jobs was showing you yesterday.
Rupert Murdoch: Um-hum.
Peter Robinson: Same size screen. Totally flat, pixels. In other words, isn’t, isn’t
it going to be harder to communicate a feel for a paper. To communicate the brand over
the Internet?
Rupert Murdoch: No, I don’t think so.
Peter Robinson: You don’t think so.
Rupert Murdoch: We’re working very hard about it.
(Crosstalk)
Rupert Murdoch: Some people may lose it. I think if it just comes out looking like a
dotcom if you will, you’re in great danger of losing it.
Peter Robinson: So design is going to be essential.
Rupert Murdoch: Design and presentation.
Peter Robinson: The feel of the story.
Rupert Murdoch: Yes. And we’ll be in there doing a lot of work now. We’ve got people
working all over the world on it. As other people have. And there’ll be many experiments.
And we’ll see, what people, how people like to read their news.
Peter Robinson: Right. Let me – this business about the barriers to entry dropping, and
the question about branding. I’ll fumble as I put this to you but I think there is
an important question here. Say the Huffington Post.
Rupert Murdoch: Yes.
Peter Robinson: No fixed costs of printing presses or distribution, no department that
knows how to hype, how to purchase newsprint cheaply from Kent. They don’t have to worry
about any of that. Are they going to be able to develop a brand identity quickly enough?
Will they be able to catch up with the Washington Post, or indeed the Wall Street Journal? Or
brands – is it the nature of a brand that it takes decades to develop?
Rupert Murdoch: I think it takes decades but not necessarily. I think that the Huffington
Post is a non-profit organization virtually. They’re going to have to charge for it.
Peter Robinson: Fighting words? All right.
Rupert Murdoch: No, no, no – nobody makes money on the internet, depending on display
advertising.
Peter Robinson: All right.
Rupert Murdoch: They’re not going to make any real money off search and Google. And
I think they’re going to be under threat from Apple and other people. They’re going
to see some very interesting battles in Silicon Valley between the giants. But they’ll be
the two giants that will clash rather than Microsoft.
Peter Robinson: So new ventures. Your judgment then is that new ventures such as the Huffington
Post had better be on your radar because they do have a chance at it if they’re smart.
They can develop brand identity for…
Rupert Murdoch: Yes, they can if they want to, yes. I mean, we might even – we’re
looking at one of them, one of the business models we’re looking at is offering on the
iSlate a bundle of newspapers, and which would include some competitors.
Peter Robinson: I see.
Rupert Murdoch: And we’re not having, averse to putting competitors with different views.
All for one price which might be five, six dollars a week. Is that right? I think, give
people a number of newspapers.
Peter Robinson: I see, okay. All right. Segment three. The proprietor. A number of features
appear again, and again, throughout your career. One is the impulse to build. When your father
died and you took over the Adelaide News one regional newspaper within a few years, which
is to say while you were still in your twenties, you purchased the Sunday Times in Perth. You
purchased Suburban and provincial newspapers in New South Whales, Queensland, Victoria,
the Northern Territory. And you purchased the Daily Mirror in Sydney. Your father didn’t
do that sort of acquisitive building. You did in your twenty – where did that come
from? Where did that come from?
Rupert Murdoch: Well he did well because he was, I thought, a great man. But he was the,
he had built a great newspaper, group if you like. But as an editor and then a managing
editor, and onto chief executive. He didn’t own them. And was in Melbourne, and I experienced
that sort of life.
Peter Robinson: Right.
Rupert Murdoch: And couldn’t imagine any other life as good as that, as running newspapers
or being in that… so involved in current affairs and everything. And there I was into
the Adelaide, and with the Adelaide News in a, in an interesting and cheeky war against
their much bigger paper. And we did buy some things but they were all things that were
going broke. And so we’re going to try and turn things around.
Peter Robinson: Was there a moment…
Rupert Murdoch: And baffle them, and they were very opportunistic things that, in the
effort to be bigger than just Adelaide.
Peter Robinson: So, did you say to yourself as a business matter I have to build in order
to continue competing in Australia. Or did you say to yourself, equity, I want to own
properties?
Rupert Murdoch: No, in order to compete because so much we could – there was so little we
could do just in Adelaide. You know, we were buying cartoons and stories from features,
from bigger newspapers, and bigger cities. And I said, and that one later my same motivation
in television from a little television station in Adelaide. Having to take programs from
bigger things. And then, finally, I got bigger. I finally had to take him to Hollywood and
it all led to me taking the opportune – when it came, many years later – the opportunity
to actually have a studio where you make your own product.
Peter Robinson: All right. I still think there’s something exceptional there even though to
you it all felt like a natural progression.
Rupert Murdoch: Um-hum.
Peter Robinson: It’s a striking progression…
Rupert Murdoch: Well it was opportunistic and then it was like London. I worked as a
cadet almost.
Peter Robinson: Right.
Rupert Murdoch: After I left Oxford for a year on the London Daily Express and just
loved every minute of it. And knew all the people there. And 15 years later in the midst
of coming to the end of a huge war.
Peter Robinson: Right.
Rupert Murdoch: Tabloids in Sydney. I couldn’t understand how three of us could survive in
Sydney if only just and there was only one in the whole of Britain.
Peter Robinson: Right, right.
Rupert Murdoch: So, you know.
Peter Robinson: Right.
Rupert Murdoch: I took the first opportunity I had to jump in there.
Peter Robinson: Here’s another feat – you’re leading to another feature of your
career which is taking on the establishment. Taking on various establishments. I, you become
proprietor of your father’s paper, the Adelaide News. And the big newspaper in town, the Adelaide
Advertiser leans on you and sends your mother a letter.
Rupert Murdoch: Um-hum.
Peter Robinson: Pressuring her to sell to them. And what did then, 24-year-old Rupert
Murdoch do? He published the letter on the front page of the Adelaide News and started
a circulation war with the Adelaide advertiser. And did pretty well out of it.
Rupert Murdoch: Right.
Peter Robinson: Years later you’re in Britain. The printer’s union is choking the newspaper
business in Britain. You see Critley begin putting state of the art printing presses
in a warehouse in Whopping. An undistinguished suburb of London. And then you suddenly announced
that you are moving the Times of London, this mythic property from Fleet Street out to the
warehouse in Whopping. And you just took them. In fact, you tell what happened as a result
of that move? The unions did not like it, to put it mildly.
Rupert Murdoch: We had a horrible strike. We always had the London Sun and a different
pub, which was printing four million copies a day and to some respects less. Those are
the times….
Peter Robinson: The Sunday…
(Crosstalk)
Rupert Murdoch: The Sunday Times was a big property.
Peter Robinson: The Sun was and I believe still remains the biggest circulation English
language newspaper in the world. Is that not so?
Rupert Murdoch: Oh, yes – yes, certainly.
Peter Robinson: Correct? All right.
Rupert Murdoch: And his dinks still very, very well. But what happened was. I mean the
unions – I can’t begin to describe. The old craft unions and how they behaved, and
continued to behave. We all are newspapers. There wasn’t a newspaper that didn’t miss
an edition once a week or so something.
Peter Robinson: Right.
Rupert Murdoch: Or appear full of mistakes because people are fighting for anything.
And the publishers at Worth, always get together once a week as they were going to stand together.
And then, before they got back to their offices, someone had broken down and given into it.
So, I just waited until I thought I was big enough and strong enough. And things changed
but we, but out of a labor government or conservative government, although we didn’t get. We never
had any contact or asked for any help. They automatically did at least protect us with
a lot of police, and some.
But yes, when the contracts came to an end, we presented them with a new contract which
we knew they would reject. So we just went on printing but edited from place. And with
different distribution over the whole country, which had been planned in great detail for
a year with a huge operation and very, very nice. Because we immediately had thousands
of people at our front gates. And, uhm…
Peter Robinson: Willing to work.
Rupert Murdoch: No.
Peter Robinson: The protesting, you mean.
Rupert Murdoch: Protesting.
Peter Robinson: Right.
Rupert Murdoch: Not just us strikers but…
(Crosstalk)
Peter Robinson: He got violent. He got violent.
Rupert Murdoch: It’s amazing in the middle of the ‘80s. It doesn’t sound so long
ago. The people like their worker’s revolutionary party, the trotskyites, or whatever. They
all came out on the Saturday night and a Wednesday night. That was like a big night out for them.
And the police would be there, and the horses. And they’d be throwing darts into the back
of the horses who would rear up. And the television lights would come on. And we, what was really
interesting was the major industrial figures. People like the head of ICI, and so on, went
on the BBC and said, “This is not the British way to conduct relations.” But we couldn’t
get to those players anyway.
After a couple of weeks I had a deal with a, with the head of the union, secretly. And
he was the, a very nice lady. And I never heard from her again. She couldn’t summit
to the union at all.
Peter Robinson: Um-hum.
Rupert Murdoch: So they stayed out. And a year later they settled that they’d never
come back and take one week pay for every year they’d been working for me. And, which
was half of what I’d offered a year before. And that was it.
Peter Robinson: You tricked them on.
Rupert Murdoch: And there’s still a lot of bitterness around but not much.
Peter Robinson: Right, right. You faced them down.
Rupert Murdoch: We faced them down.
Peter Robinson: You faced them down.
Rupert Murdoch: And it was yes.
Peter Robinson: What establishment…
(Crosstalk)
Rupert Murdoch: That was an epic battle. It was the first major in fifty years or certainly,
40 years – industrial dispute that had been won in Britain by the, a private employer.
Peter Robinson: And if…
(Crosstalk) Peter Robinson: I would argue that it’s,
that it teed up Mrs. Thatcher’s battle, the decisive battle with the TUC over the
coal mines, you know.
Rupert Murdoch: It followed that.
Peter Robinson: It followed that?
Rupert Murdoch: It followed that.
Peter Robinson: Oh, okay.
Rupert Murdoch: That was somewhat of a cue to me.
Peter Robinson: Oh, I see. All right. So what establishment are you taking on now?
Rupert Murdoch: Oh? Nothing like that. But certainly I would say the somewhat monolithic
liberal press here. I can’t buy any newspapers here – and to buy them, any number, for
next to nothing. But my shareholders would be in revolt. Not that they can throw me out
but it would be very destructive of values. But, no, we’ll get there. And have, I –
we believe by making far the best newspaper in this country it will rub off onto others.
Peter Robinson: Is there room for two national newspapers in the United States?
Rupert Murdoch: There should be.
Peter Robinson: The Wall Street Journal and the New York Times.
Rupert Murdoch: With New York Times. We outsell the… outside New York, we outsell the New
York Times, by about three and a half to one. In New York, they outsell us by about two
to one. So we’re starting a new edition, all right, in New York with an extra ten pages
or so. I don't know how many pages, I think ten pages, or – of just New York years.
Peter Robinson: You just can’t resist a flight. Segment four, liberty. As an undergraduate
at Wooster College, Oxford, you attended meetings of the Communist Club of Oxford. And you kept
a bust of Lennon in your rooms. Three decades later, you’d become a friend and champion
of Margaret Thatcher and Ronald Reagan. Explain yourself?
Rupert Murdoch: right, I grew up. But I say it wasn’t the communist party. And there
was, it was a labor…
Peter Robinson: Were you just playing at it when you were…
Rupert Murdoch: It was the labor club.
Peter Robinson: Labor club for it. All right.
(Crosstalk)
Rupert Murdoch: And, uhm…
Peter Robinson: But you supported labor when Clement Atlee was Prime Minister. Clement
Atlee was in his final year if I remember it correctly. He was Prime Minister….
(Crosstalk)
Rupert Murdoch: Oh yes, I remember all my tutors were lecturing me, that, you know,
that the world had changed. And the welfare state was the new thing, and so on and I’m
done. Yes.
(Crosstalk)
Peter Robinson: So at the age of 21 you’d bought it.
Rupert Murdoch: And Kevin Atlee wasn’t all that bad a Prime Minister. It so happened,
it was his cabinet that it was his problem. But, you know, things are different in those
days. The conservative party was pathetic. We didn’t have the real philosophical things
going on that you have today.
Peter Robinson: Okay, but.
Rupert Murdoch: You know, I’d yes, you know, I’ve. I guess being in business and, uhm,
just growing up.
Peter Robinson: Just growing up. All right. Prime Minister Thatcher privatized one industry
after another between her taking on the TUC, your taking on the printers’ unions.
Rupert Murdoch: We supported her all the way through.
Peter Robinson: All the way through. Ronald Reagan cuts, cut taxes and reduced regulations,
and in both Britain and America today, two decades later, the impulse is just the reverse
toward expanding this state, toward rolling back the Thatcher achievements and the Reagan
achievements. Are you surprised? Did you think Thatcher and Reagan had made permanent progress?
Are you surprised to see it?
Rupert Murdoch: I thought they had and I still think they have.
(Crosstalk)
Peter Robinson: You’ll have to do.
(Crosstalk)
Rupert Murdoch: I mean just look at what’s happening here and what the mood of this country
is today. The western part of the world, if you will, right? North America and Europe
are questioning all the precepts of capitalism. The two countries that are screaming for more
capitalism are China and Brazil. And, I think we’re getting into some very dangerous territory
here where, with these deficits, and where China is now our greatest creditor and let’s
us know every week, and as rudely as they can.
Peter Robinson: Right, now you right – you’re right again and a golden age of freedom.
In late 1978 Deng Xiaopeng faced a China devastated by years Miles misrule. He made a courageous
decision to embrace the market by every measure – diet, education, life expectancy. Chinese
today are better off than their parents or grandparents. The Chinese have been liberated.
To what extent does the fantastically rapid growth in China represent an opportunity for
the United States. And to what extent does it represent a political, perhaps even a military
danger?
Rupert Murdoch: Well I hope it’s not a military danger but I – fear that.
Peter Robinson: You do feel that – you do fear it? You consider it…
Rupert Murdoch: Well, slightly, slightly…
Peter Robinson: You do…
Rupert Murdoch: I think, you know, we should be doing a lot more. I mean the Chinese navy
is already building better submarines than we are. And more of them. They’re expanding
into Africa enormously.
Peter Robinson: Right.
Rupert Murdoch: Buying anything they can get. Are they going to try and, you know, make
the Indian Ocean a Chinese lake, or the Pacific Ocean. I mean there, there are big things
to say, but…
Peter Robinson: Right.
Rupert Murdoch: I think, you know, it, within the Chinese character. They’re very, very
proud of the material progress that they’ve made. And the position where there are greatest
debtor) and they, you know, they’re making up for the bad few hundred years that the
western powers gave them.
(Crosstalk)
Rupert Murdoch: They have long memories.
Peter Robinson: Right, right. Let me take you, let me take you to the particular point
of friction at the moment. Google – Google in mid-December detects a cyber attack. I’m
quoting you now from Google documents. “Google loses intellectual property of its own. It
discovers that at least 20 other companies are targeted in this attack.” And I’m
quoting the Google document. “A primary goal of the attackers was accessing the accounts
of Chinese human rights activists.” What is Google doing about it? I quote again, “We
will be discussing with the Chinese government the basis on which we could operate an unfiltered
search engine, if at all. We recognize that this may well mean having to shut down Google
China, and potentially our offices in China.” Is Google playing this right? What do the
Chinese think they’re doing?
Rupert Murdoch: Well, I’m in a minority here. But I believe they are.
Peter Robinson: That Google is playing it right.
Rupert Murdoch: Yes, and I’m probably in a minority even if I know the people who are
running Google. But at least one of the major controllers, and earners are Google who had
his youth in Russia. Had made this a great point of principle. And I think that…
Peter Robinson: And he is right to do so.
Rupert Murdoch: Yes, and I, I think it’s very brave. I don’t think it’s, I think
they’re going to lose their business. I don’t believe that…
Peter Robinson: The Chinese will stand on it, will stand firm.
Rupert Murdoch: Oh yes, the Chinese are not going to… The Chinese are not going to lose
face and change their rules.
Peter Robinson: Okay.
Rupert Murdoch: Not, not under the glare of this publicity.
Peter Robinson: Should Google…
Rupert Murdoch: I mean, you know, I’m, in a matter of five-years time it may be quite
different.
(Crosstalk)
Peter Robinson: Could Google have handled it quietly? Could Google, should Google have
handled it more quietly. Or you, you think they’re exactly right to face the Chinese
and make a point of…
(Crosstalk)
Rupert Murdoch: I think that. Yes.
Peter Robinson: You do?
Rupert Murdoch: Yes.
Peter Robinson: Do the Chinese…?
Rupert Murdoch: I mean they could have gone and complained privately and so on. But it
wouldn’t have changed anything. And they would have had to explain why they were pulling
out.
Peter Robinson: And do the Chinese understand the repercussions of this throughout the western
where every businessman who’s doing business with China is now, now says to himself, “Wait
a moment. At the next shareholder’s meeting somebody’s going to stand up and say, ‘why
am I not being as brave as the, as Google. Where is our – where is the principles of
our?’” Isn’t that going to put everybody who’s doing business with China, including
you in a tight spot?
Rupert Murdoch: I don’t do business with China. We have a few minor events and we don’t
operate anything in China.
Peter Robinson: Oh, you don’t? Oh, all right. Everything is based outside.
Rupert Murdoch: Um-hum.
Peter Robinson: So but, do you reckon the Chinese know what they’re doing here?
Rupert Murdoch: Now, you’re going through a period in China where the regime, or the,
those who are in control of the regime, who had the majority of the regime.
Peter Robinson: Right.
Rupert Murdoch: Are clamping down very, very hard on any sort of free expression. And their
own local newspapers and everything. And, you know, they’re term will be up in about
three years. And then we’ll see. I think there are a whole lot of opinions going on,
you know, within. I’m speculating, but within the sort of central council of, the inner
central council of nine and the conservatives have the majority at the moment. But you’re
going to see when the next regime comes in. Nothing dramatic but the beginning of an opening
up.
Peter Robinson: From a Golden Age of Freedom: “By 2025, about 520 million Chinese should
reach the upper middle-class. These people want the same things we do. Good housing,
a first rate education for their children. By 2025, will the Chinese also want and perhaps
have obtained some measure of democracy?”
Rupert Murdoch: 2025 is pretty soon, but yes. I believe, you know, you’ll have the communist
party like an umbrella. But there are wings of the communist party and the debates that
go on between them now behind closed doors will begin to go on, you know…
Peter Robinson: In public.
Rupert Murdoch: In the public eye. The Chinese are, you know, are very nationalistic, and
very patriotic people. I don’t see it falling apart or there being a revolution there at
all. But will, you know, political debate become more open? Yes, I think it will.
Peter Robinson: All right. Segment five, our final segment. The difficult task of getting
paid. Rupert Murdoch in his December testimony to the Federal Trade Commission, “We need
to do a better job of persuading consumers that high quality, reliable news and information
does not come free. The critics say people won’t pay, I believe they will.” You believe
because that’s a gut instinct based on all your years of business. You believe because
you’ve focus tested it. Fill me in, fill me in.
(Crosstalk)
Rupert Murdoch: Oh, focus tested it, yes but I don’t have great faith in focus tests.
Peter Robinson: You don’t.
Rupert Murdoch: But, a point – an example. Is the Kindle, which I don’t, which is great
for reading books but it is not a great newspaper experience. But almost without solicitation
about 30,000 people buy the Wall Street Journal on the Kindle everyday.
Peter Robinson: Really?
Rupert Murdoch: Yes.
Peter Robinson: With all, with no marketing effort to speak of.
Rupert Murdoch: None from us, no.
Peter Robinson: So, that’s okay. It’ll be totally different when you get the iPad.
I was going to say, “What? Is the iPad?”
Rupert Murdoch: And there will be other I-slates, so whatever, you get it in four colors. You’ll
be able to do anything on that. You’d be able to do your search, your buy – your
buy books. See what you can watch movies, television shows, and certainly any number
of newspapers.
Peter Robinson: All right. Here. Emily Bell who runs the website of the Guardian, which
is a big website. The Guardian has a big online readership.
Rupert Murdoch: They do. They’ve made a bigger, long-term investment.
Peter Robinson: Yep. And her reply to the notion that readers will pay for online comment
runs as follows, and I am quoting her: “Rubbish, bonkers, a form of madness.” Now in your
mind this is not even a debate anymore. She’s just wrong and that’s all there is to it.
Rupert Murdoch: Yes.
Peter Robinson: All right. Thank you very much. Just over a week ago as you and I talked
the Wall Street Journal went behind a paywall. You can’t get it unless you pay for it now.
Can you tell results? What’s the metric by which your going to…
Rupert Murdoch: Yes, we’ve actually had an increase in circulation, electronic. Well,
the WallStreetJournal.com.
Peter Robinson: Right.
Rupert Murdoch: Yes. Was always behind a pay wall, except for all the editorial comment
and op-ed pages.
Peter Robinson: Right. You, that’s.
Rupert Murdoch: You can put a lot of that, now, behind a pay wall. And it’s caused
a reaction upwards into, into – in people buying the W, and subscribing to wsj.com.
Peter Robinson: So, it’s working.
Rupert Murdoch: Yes.
Peter Robinson: Eric Schmidt, CEO of Google, quote: “In general, the models that require
readers to pay for online content have not worked for general public consumption. So
my guess is that for niche and specialist markets it will be possible to charge for
online content but I think it is unlikely that you will be able to do it for all the
news. So if I were to take Schmidt’s observation and play devil’s advocate, I’d say, “Mr.
Murdoch, you’re going to be able to pull it off with the Wall Street Journal because
that has such a clear brand, and because so many people rely on it for a specific kind
of information, financial information.” But although it moves me to tears to say so
because I so love it, the Post might not work online. And how do you reply to that?
Rupert Murdoch: Oh, I disagree totally.
Peter Robinson: You do?
Rupert Murdoch: Absolutely. I think people. There are certain sections of the Post, particularly,
and I think it’s a very intelligent paper in the way it handles politics, no. But what
people like about the Post, I mean, there are groups of people who just, women who live
on page six. I can’t understand that. But much, much bigger groups of people.
Peter Robinson: Page six is the gossip page.
Rupert Murdoch: Who recognize that it’s the best sports paper, and best sports coverage.
And they’ll buy it. But, you know, they might be buying it at these prices. We might
be using paper. We will not be, we won’t be using trucks.
Peter Robinson: Right.
Rupert Murdoch: It’ll come out at, on the wi-fi and be picked up on these, on these
readers. And we’ll be able to, you know, make a very economic and attractive package
to be able to…
Peter Robinson: Let me ask you a question about that then. So, this stuff isn’t expensive
print, a newsprint and the distribution.
Rupert Murdoch: You bet.
Peter Robinson: Five years from now? Ten years from now? When will this cease to be available
as a physical object? Do you have a plan in mind or at least a notional number?
Rupert Murdoch: No, no…
Peter Robinson: How long can you afford to carry those….
Rupert Murdoch: We’ll talk about it.
(Crosstalk)
Peter Robinson: … fixed costs.
Rupert Murdoch: We think Peter, we’ll be buying papers, and enjoying papers, and the
tactile experience of reading. Probably for decades but certainly for one, but at least
two.
Peter Robinson: All right, all right. Okay. Final couple of questions.
Rupert Murdoch: But we have, we will reach a vastly bigger audience. Once you see things
like the iPad out there.
Peter Robinson: You love the iPad. That’s going to make a difference.
Rupert Murdoch: Well, I’ve been sold on it because they were up here yesterday with
it. But it, and we were all playing with it. And we were all very impressed.
Peter Robinson: Okay. Umm, final couple of questions.
Rupert Murdoch: Any little. Okay, but there’ll be so many applications on it that they have,
which usually, if you have an iPhone you’ll be able to starting with it.
Peter Robinson: Right.
Rupert Murdoch: That a lot of people will go to an application like where’s the best
restaurant.
Peter Robinson: It will be…
Rupert Murdoch: The right suburb or where’s this, or that. That you’ll find, that will
eat into the Google search.
Peter Robinson: I see.
Rupert Murdoch: Which is an interesting sideline to this.
Peter Robinson: I see, all right. This year Fox News is expected to brew some $700 million
in operating profits. 20th Century Fox, you haven’t even started to book the profits
from Avatar, which apparently is going to be the biggest selling movie in history.
Rupert Murdoch: Not necessarily the most profitable, but yes.
Peter Robinson: Well, it was an expensive picture to make on the market.
Rupert Murdoch: Very expensive picture to make. Very expensive picture to distribute
and so on. And, you know, we’ll do, probably $700 million or so in this country, of which….
(Crosstalk)
Peter Robinson: $700 million net, or gross?
Rupert Murdoch: No, no, no, no. Gross.
Peter Robinson: Okay, all right.
Rupert Murdoch: Of which 60 percent would go to the, through the Fox coffers should
we say.
Peter Robinson: All right.
Rupert Murdoch: And internationally the rest is about 42 percent or something like that.
In the case of China it’s about 15 percent.
Peter Robinson: I see.
Rupert Murdoch: That thing goes into the pond. We get, we get a distribution fee on the lap.
The director gets a – a percentage. And then we lay it off to, to be those – a risky
film. We let a lot of the risk off.
Peter Robinson: Don’t tell me it would credit default swabs.
Rupert Murdoch: No, no, no. But what it means is that we were never in danger of losing
my seat.
(Crosstalk)
Rupert Murdoch: Okay. We run a very conservative studio. But we will do very nicely out of
it, don’t worry.
Peter Robinson: I’m Avatar. All right, all right. So television, film. Hugely profitable.
And yet everybody who knows you will say that Rupert Murdoch still cares about newspapers.
Rupert Murdoch: Sure.
Peter Robinson: Why is that? Why did you just say, “Oh, let’s just carry these. But
just – let’s. All our emphasis on these new, on film and television. These wonderfully
profitable new avenues.”
Rupert Murdoch: Well, I’m just a curious citizen. And I’d love to know what’s going
on in the world and be part of it. And it’s different everyday. And it’s a, it’s a
great challenge, particularly what I love about a newspaper is, you can always produce
a better one the next day or the next edition. It’s a constant work whereas, you know,
to make a film it’s often two years of agony.
Peter Robinson: Right. Your grandfather was a minister. Your father. I’m quoting once
again from a Golden Age of Freedom. This is you: “I was raised in a newspaper family
by a father who believed that newspaper was among the most important instruments of human
freedom. My father said that the press must be more than merely free, it must be fact
finding, and truth seeking to the limit of human capacity and enterprise.” I put it
to you that hard boiled businessman though you maybe. At some level you’re a missionary.
It may drive your investors mad but at some level you feel a missionary impulse.
Rupert Murdoch: Thank you.
Peter Robinson: Will you let that stand? Or will you…
Rupert Murdoch: I will let it. I will let that stand…
Peter Robinson: You will, you will let that stand?
Rupert Murdoch: Proudly and I thank you, yes.
Peter Robinson: Rupert Murdoch, thank you very much for joining us.
Rupert Murdoch: Thank you.
Peter Robinson: Rupert Murdoch, founder and chairman of the News Corporation, thank you.
I’m Peter Robinson for Uncommon Knowledge. Thanks for joining us.
Rupert Murdoch Interview
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