News International's business is based in the UK on three things:
- print, which is suffering a major advertising downturn on top of the profound disruption of digital, and needs to persuade readers to pay for news online.
- Satellite distribution, which is being undermined by the promise of broadband and IPTV and the interactivity, greater consumer choice and lower costs they offer.
- Premium content and sports rights, potentially undermined by Ofcom proposals to force it to share with rival broadcasters.
So perhaps the least surprising event of the summer was that James Murdoch would use the platform of the McTaggart Lecture to swipe out at Ofcom and the BBC. Whether or not you agree with his ideology, it was a bravura performance.
He cited Orwell's 1984 and the threat of an authoritarian future while indulging in his own form of Newspeak. Just as Fox News tries to redefine "Fair and Balanced" as meaning Pro-Republican, so for Murdoch public funding equals "state sponsored" with all its authoritarian overtones, and Independence is now equated with profit. It's more than semantics. This is how terms of debate are shifted. Though I doubt I was the only one to be struck by the Gordon Gekko cadence of his pay off line: "The only reliable, durable, and perpetual guarantor of independence is profit."
The debate over the right mix of funding and regulation for Britain's digital media will run for a year or two yet. And no-one in the BBC can be unaware of the arguments and allegations about market distortion.
What's missing so far is discussion of the public good. Because many commercial operations are struggling, the answer for some is to close or pull down the BBC's activities. A lowest common-denominator approach. Surely part of the justification for public funding and public media is to provide during conditions of market failure?
I certainly don't agree that the market, unfettered, will provide all the public require. I'm with the BBC's Robert Peston: “Having just lived through the greatest failure in history to distribute financial resources in an efficient and equitable way, we certainly shouldn’t assume that a commercial digital market in news will distribute information in a way that would support a healthy democracy."
Will Hutton put it colourfully in The Observer, "The biggest risk is not of an Orwellian state. It is that our society is being taken over by a new class of super-rich unaccountable oligarchs – in finance and in the media – with little interest in our culture, civilisation or vitality of our public realm."
The threat of a media giant distorting markets plays more than one way. Ask Virgin, BT or others trying to compete with Sky.