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Wednesday, October 13, 2010 

Why Vince Cable needs to block Murdoch taking full control of Sky.

While it is rare for either the entirety or vast swathes of the British media to work together, it is not unprecedented. What is unprecedented is that the target of the group formed this week is not the government of the day, as has always been the case previously, but another media group. Such it seems is the existential threat posed by News Corporation acquiring BSkyB in full, already owning as it does a 39% share in the company, that political differences, allegiances and much else have been cast aside for the greater cause.

This isn't quite the abandoning of the mentality in Fleet Street which has long held that dog doesn't eat dog, at least when it comes to general journalistic ethics, most recently broken by the Guardian's investigation into the phone-hacking at the News of the World and which has been almost entirely ignored by the nation's tabloids if not the former broadsheets, but it is highly significant. It's not often that either the Daily Mail or Telegraph see eye-to-eye with the Guardian, let alone the BBC which both of the former continue to pillory when the opportunity arises. The list is if anything more marked by those who haven't given their support, which amounts to Northern and Shell, the owner of the Express group, Richard Desmond presumably either not rocking the boat having recently acquired Channel Five with little adverse comment, as well as perhaps harbouring ambitions of one day rivalling Murdoch in the media ownership stakes; the Independent; Virgin, having recently sold Sky its main channels and ended the war sparked by the removal of Sky 1 and other services from their packages back in 2006; and ITV, in which BSkyB has a 7.5% share, having been forced to sell some of the stake it acquired as part of a gambit to block Virgin, then NTL from attempting to take full control four years ago.

Undoubtedly self-interest is purely behind the appearance of BT on the list, having formerly been a monopoly itself, and which has only very recently attempted to begin to attempt to compete with Sky. Indeed, it's difficult to know just how many of those on the list genuinely do believe, as their letter to Vince Cable, the business secretary has it, that the "proposed takeover could have serious and far-reaching consequences for media plurality". The Mail and the Telegraph certainly haven't been quick to let their concerns about Murdoch's previous predatory behaviour come to the fore; if anything they actively cheered some of it on. Only now that it could possibly affect them have they begun to cry foul. Simon Jenkins also has something approaching a point, although some his analysis is dead wrong, such as his suggestion that without Murdoch there may have been only 3 newspapers by now as in most other "unionised" countries (this ignores the fact that as a country we have always bought newspapers in far greater numbers than almost anywhere else on the planet) when he says that other organisations have opposed his "innovations" only then to take advantage of them without the risk he took on.

The other main problem with his argument is that even if the end of the union control over Fleet Street resulted in massively increased pagination, it most certainly didn't result in a corresponding increase in quality. As others in the comment thread also point out, it was the creation of the Premier League and Sky's stranglehold over the live football market which continues to this day which was the true making of him in this country. Mark Thompson recently pointed out that despite having fifteen times the turnover of Channel Five, Sky spends about the same as that broadcaster on home-grown original content, just £100m. Its marketing budget, by contrast, is the same size as ITV's programming one. It's that massive turnover of almost £6bn which those who signed the letter fear becoming fully under the control of News Corporation; the kind of money which can outspend all of them put together, consolidating Sky with his newspapers and HarperCollins, creating a behemoth of an organisation which will be the first port of call for those using the new technologies which Murdoch is eager to get into, starting with the iPad.

Increasingly, it's the BBC which stands in the way of this vision, as has been made more than clear by James Murdoch and other Murdoch employees and devotees. As Roy Greenslade says, subscriptions to the Times and Sunday Times have been disappointingly low since they took the plunge, Murdoch led, of charging for access to their websites. One suspects that when the News of the World and Sun eventually follow suit that sign-ups to those high quality sources will be even lower: it's one thing to pick up a tabloid for between 20 and 40 pence to flick through during lunch break or when commuting (yes, I know the Screws costs more than that; Sunday papers have always been different); it's another to subscribe to them online when you can get far superior content for free elsewhere. Blaming the BBC for the failures of the Times and Sunday Times is perverse while the other broadsheets provide their content for free, yet increasingly it's clear they cannot afford to do so in the long-term, with paid for physical sales in almost certainly irreversible decline. Reduced to say, a choice between the Guardian and the BBC for free content, it will be far easier to point the finger at the corporation as to why the private sector can't make money.

It's no wonder then that with so many other potential targets, the Times picked only on Mark Thompson and the BBC in a leader this morning. Taking the moral high ground when you're a Murdoch paper may be difficult, but the Times still attempted it, making clear that it couldn't objectively comment on the proposed full takeover of Sky for obvious reasons. It accused Thompson of acting as any other business organisation would, despite calling for the corporation to be treated differently, and making a serious error in compromising an issue that the corporation would wish to report on without being accused of self-interest. Far less convincing was its claims that this was still about potential BBC expansion, when it ought to be abundantly clear that the only thing the BBC is going to be doing in the short-term and almost certainly in the long-term also is the old impossibility of trying to do more with less. In an almost certainly unrelated development, Sky also complained to Ofcom and the Office of Fair Trading about the BBC's proposed YouView service at the very last minute.

Whether there will be any material difference made by News Corp and Murdoch wholly owning BSkyB, at least in the short-term, is dubious. Murdoch has always controlled the broadcaster regardless of owning only 39% of the shares. What Vince Cable really needs to consider should he have to rule on the matter is two things. Firstly, that Murdoch owning vast swathes of the British media has never resulted in anything other than a race to the bottom. The best that can be said is that he saved the Times and the Sunday Times for the nation, hardly the greatest of achievements. His partnership with the Premier League resulted directly in the pricing out of the game completely those on low incomes, unable to afford either his coverage or to attend matches, while contributing directly to the massive rise in player salaries and short-termism which now rules the day. The best his satellite services can be said to offer on the cultural front is the Sky Arts channels, and they were only relatively recently brought in house from outside control.

Second, is that the power he already has is immense: nothing illustrates it better than than the MPs who were frightened of the potential consequences should they continue pushing the initial phone-hacking investigation. Politicians have to woo him, not the other way around. While his influence in an online world can and is exaggerated, the fear which comes from having the biggest selling newspaper in the country pouring the journalistic equivalent of a bucket of shit over you, deserved or not, is total. When the police could well be curtailing their investigations because of their links with the real power in the land, it ought to be more than apparent that giving those who wield it even more revenue without the corresponding responsibility is a disaster waiting to happen. Stopping Murdoch from taking complete and total control of Sky is the only way to ensure that it doesn't.

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