Note: Published by The
Media Tank on 8/31/05
Media has its eyes on the internet. Since
backing off of major internet ventures
after a number of high-profile missteps
during the initial dot-com boom of the
1990s, the "old-line" media
companies are aggressively pursuing a
plan to lay their claim on the internet
by acquiring once-independent internet
FOX LEADS THE WAY
Murdoch's News Corporation, owner of the
Fox television network, is leading the
way. On July 15 News Corp. announced
the formation of a new internet division,
Fox Interactive Media . Just
days later the
company bought Intermix Media ,
the majority shareholder of MySpace.com,
for $580 million.
is clear: use his new web power to promote
and distribute the content created in other
regions of his vast media empire. As he
recently stated, "News Corp. at its
core is about content. The web at its core
is about personal choice. What we are aiming
to do is combine the two."
Over the past few weeks Murdoch has stated
that News Corp. would be willing to spend
between $1-2 billion on acquiring internet
properties in the near future. He was
quoted as saying, "through
further strategic and targeted acquisitions,
we can very quickly become a major player
in this industry."
Fox Interactive Media has not slowed down
since the MySpace buyout. In early August
News Corp. division bought Scout Media
, a Seattle-based company which
operates a network of over 200 sports
websites which reach 2.4 million users
News Corp. is also in the market for an
internet search engine to compete with
Yahoo and Google. They are currently
in negotiations to buy the San Francisco-based
internet search company Blinkx .
Blinkx.com is seen as a leader in online
video searches. Two other companies that
News Corp. is said to be considering purchasing
are IGN, which owns a network of online
gaming sites and other sites which target
18-34 year old men, and Skype, a website
that allows users to place phone calls
over the web.
THE WEB: NEWEST COLONY IN A VAST EMPIRE
Why would one of the world's most powerful
media moguls pay over half a billion dollars
for something like MySpace? News Corp.
plans on building a massive internet portal
to compete with sites like Google and
Yahoo. While the internet may have seemed
like risky investment territory just a
short time ago, the recent boom in internet
ad sales mean it is a medium that the
big media conglomerates will not ignore
for long. Internet ad sales are expected
$16 billion in 2009, up from $6.6 billion
in 2003 .
Much like his 2003 purchase of DirecTV,
Murdoch's plans for the internet are rooted
in his philosophy of housing content and
distribution under one roof. DirecTV gave
Murdoch his own platform to distribute
News Corp.'s many cable stations like
Fox News Channel and Fox Sports Network.
News Corp.'s ownership of DirecTV not
only ensures that whenever they come out
with a new cable channel it is guaranteed
to be launched to at least 13 million
households, but it also gives the company
leverage when negotiating carriage on
competing cable systems.
Murdoch was able to jump into the U.S.
pay-TV industry in one fell swoop with
his purchase of DirecTV because the cable
and satellite were already highly consolidated,
corporate-controlled mediums. It will
not be quite that easy on the web, although
the purchase of MySpace certainly helps
News Corp.'s plans.
With the purchases of Intermix and Scout
Media, News Corp.-owned websites now reach
nearly 50 million unique users a month,
up from 16 million. This gives Murdoch
the sixth-largest audience on the web,
which future acquisitions would only add
Unfortunately for us, Murdoch's idea of
personal choice is probably something along
the lines of choosing between Fox News and
Fox Sports. No matter what he says about
personal choice, News Corp.'s foray into
the web is, at its core, about one thing:
profits. Just like his approach to every
other medium, Murdoch intends to bend the
internet to his profit-driven will.
One advantage that MySpace gives Murdoch
beyond ad revenue is the ability to track
trends and find out what people are talking
about online, all in the name of better
marketing strategies for other News Corp.
content. MySpace gives News Corp. an inside
look into what young, tech-savvy people,
one of the most sought-after demographics,
are interested in and discussing online.
MySpace not only gives News Corp. access
to watch trends as they evolve, but more
startlingly, it gives them a desirable population
to experiment their own "trends"
on. MySpace may begin to look less like
a vibrant online community and more like
a corporate petri dish.
Targeted marketing campaigns are nothing
new. We know that advertisements are placed
on TV shows based on what type of people
watch them. You probably won't see a 50
Cent ad on 60 Minutes, but you probably
would on MTV. We also know that every time
you turn on the TV you are going to have
millions of different products pushed on
you by way of advertising and product placement.
The question is: does it have to be the
same for the internet?
The expansion into the internet actually
takes it a step further. Unlike a television
or radio station, sites like MySpace really
are online communities .
These are the places where people go to
keep in touch and listen to music and chat
with friends. The News Corp. purchase takes
this social community and reduces it to
just another commercial venture, another
way for them to make money and sell you
stuff. These media companies have pushed
their way not just into what we see or hear,
but actually the conversations and relationships
we have with each other. It's taken what
space and turned it into their
And what they
choose to do with that space is probably
a lot different than what you or I would
GOODBYE CREATIVITY, HELLO CONSUMERISM
Murdoch, CEO and Chairman of News Corporation,
is the head of one of the world's largest
media empires. News Corp.'s holdings include
the Fox TV network, the New York Post, TV
Guide, DirecTV, HarperCollins Publishers
and Fox News Channel. Murdoch's empire also
includes major film and television production
companies, nearly three dozen local U.S.
TV stations, over two dozen newspapers and
a handful of magazines. ( For
a complete list of News Corp.'s holdings
click here. ) According to its
website (as of June 30, 2005) News Corp.
assets of $55 billion and approximately
$24 billion in annual revenues .
Throughout his career Murdoch has been criticized
for using his newspapers and television
stations as platforms for him to promote
his own business interests and distribute
right-wing political views, often in direct
opposition to journalistic objectivity.
Perhaps the most notable examples of this
can be seen in the ultra-patriotic news
coverage of News Corp. assets like Fox News
Channel and the New York Post and the far
right commentators that dominate their editorial
content. Murdoch-owned news outlets like
Fox News were accused of giving
favorable coverage to the Bush administration
and the military leading up to and during
the war in Iraq in order to curry favor
as they lobbied the government to further
deregulate media ownership rules .
This is nothing new though for Murdoch whose
newspapers have pushed right-wing causes
in the UK and Australia for decades.
In addition to promoting right-wing causes
in these somewhat-mainstream avenues, News
Corp. is also the publisher of the ultraconservative
D.C.-based publication, The Weekly Standard,
which is headed by William Kristol of the
far-right think tank, Project for a New
American Century. But perhaps what is more
troublesome than Murdoch's personal politics
are his own designs for power. In a January
2004 BusinessWeek article, shortly after
his acquisition of the leading U.S. satellite
provider DirecTV, Murdoch was quoted as
worry. We don't want to take over the world.
We just want a piece of it."
Not only does News Corp. have a dubious
political track record but they also have
a history of getting into an industry and
quickly setting trends. Much has been said
about the "Fox
Effect" that Fox News Channel had on
other TV news programs . Murdoch
first made a name for himself as a newspaperman
in Australia and the UK. In both places
his papers were notorious for their lowbrow,
sleazy approach and big banner headlines.
He brought this same style to the New York
Post in the 1980s. In the 90s he made waves
when he established Fox as a viable fourth
network in what had been a three-network
TV market in the U.S. Fox made a name for
itself through its shocking and sleazy "When
Animals Attack"-style programs.
WHAT THE FUTURE HOLDS
News Corp. is not likely to be alone among
the old-media companies laying claim on
the internet. Analysts have pegged 2005
to be a big year for media acquisitions.
As a January 2005 article in Forbes put
Internet and interactive TV are rapidly
altering the media landscape, and the old-line
companies will need some new traveling companions."
No matter what Murdoch, or any other big
media CEO for that matter, says about personal
choice or consumer empowerment, it's really
all about business. News Corp. is a $55
billion dollar company. They don't care
about internet innovation any more than
they care about objectivity in the newsroom.
What they care about is profits. If it's
profitable they'll stick with it, and if
it's not, they won't. MySpace is yet another
way for them to sell their Fox-branded products
and give their advertisers that much more
access to your eyes and ears.
While the MySpace purchase doesn't necessarily
mean the end of the internet as we know
it, it doesn't bode well. It means that
media giants are once again starting to
pay attention to the internet, and not in
a nice way. It means they'll be using all
of their corporate power to squeeze every
last cent they can out of it. And it means
that even more of what was our space, will
now be corporate space.
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