Opinion ‘We have one of the most creative and vibrant media business in India,but it’s only a fraction of the size it should be’

Murdochs are pilloried for changing the rules of the game,sort of negatively,for destroying journalism,etc. Your father is truly passionate about journalism. He’s actually a journalist in the garb of a businessman,a publisher.

Our family and this whole company fundamentally believes in journalism. We believe in bringing stories from around the world in a way that is straightforward and adds something. We started as one small newspaper in Adelaide in Australia and everywhere we went,it was always about investing in our products,investing in journalism,in particular the newspaper business or the television news business,and trying to create new things out of that. So for us,journalism is at the very foundation of the whole company and really the foundation of what we’re trying to do,which is provide something of real utility to our viewers and our readers everywhere.

That question sometimes comes up in India now. People who build the media,then try to build other businesses. What I call mixing…’fourth estate with real estate’. It’s funny that the Murdochs haven’t quite got seduced by that idea. Because you’d rather make your money from the media instead of oil refineries.

Maybe we’re just not clever enough at doing all those other things,but we’ve always found that actually having an independent media,where all you do is the media business…it keeps you very,very accountable to your customer,and also your customer understands that you’re not part of some other faction. And one of the big problems we have in the business is that you have a media springing up that is factionalised,that’s part of an industrial or political faction and seeks those out. So for us,as an independent company,this is one of our great strengths.

The faction you seem to hate,detest most of all,is the BBC. To sort of question the BBC in the context of trust is both audacious and creative,I would say.

Oh no. First of all,the BBC has done some incredible stuff. The output of the BBC is often very inspiring,of extraordinary quality. But I do think that in a free marketplace,and particularly in a democratic marketplace,we have to be very,very careful when we think about state intervention in the media sector,subsidy and things like that. And I think it is worth raising those things.

That lecture (the MacTaggart lecture he delivered at the MediaGuardian Edinburgh International Television Festival in 2009) was an inspired piece of writing and speaking. The line that you used there,you said that “profit is the only durable,permanent,verifiable guarantor of independence.”

The issue is of being self-sustaining. It’s about being self-sufficient. That really is a guarantor of independence. Because the absence of being beholden to a faction is something we should all strive to create.

Elaborate on that a little more—the lack of profit,lack of self-sustaining ability becoming an impediment to freedom.

I think a good example is when you have a huge rush for people to get into the news business. Today in India,we have what…80 plus television news channels,right? All of them are not going to be able to run a viable,profitable enterprise. And you do sometimes have to question: what are the motivations? And who’s rushing into this space?

Many of these now are a case of real estate to fourth estate. Not the other way round.

Exactly and there’s risk in that. Now,you don’t begrudge anyone investing,and trying to create jobs. But you also have to think it through…what that means to the sector and how important it is to have a few self-sustaining,large-scale broadcasters or enterprises. In our sector,here in India as well,one of the key issues is how do you free up the environment for investment,that’s rational investment,around making independent and self-sustaining businesses as opposed to the example that you cited.

That,if I read correctly,is also the theme of your address at FICCI. You talk about hurdles…this great creative boom that’s ready to happen but is not allowed to happen.

It’s incredible. We have one of the most creative and vibrant sectors here,entertainment and news business in India. But it’s only a fraction of the size it should be. If you look at Canada,for example,it has a sort of media and digital media sector that is three times the size of India’s today.

What does India have to do to make that happen? What is blocking the growth of the sector in India?

I think it’s probably true in a lot of industries. It’s really about removing a lot of the friction in the system. I think also you have a lot of interests who protect themselves from foreign competition and domestic competition. And I think we have to remove some of the blockages,be they investment restrictions or structural restrictions. In media,we have cross-media ownership rules. Ultimately,it’s a barrier to structural innovation. And ultimately,it creates barriers to infrastructure competition. When you have infrastructure competition,things happen very,very rapidly. Thirty million Indian families now choose to take proper,21st century digital television,with all of the choice and quality as well as transparency that comes with it. And that transparency brings tax receipts,brings jobs,brings other things. In a very short amount of time,in a decade of trying to digitise,for example,the cable industry in this country,hardly any of it has happened,less than one per cent. You have lessons there.

You’re really fretting about the domination of the cable industry.

No,I think where you have infrastructure competition,it’s making a huge impact. But we need to accelerate. Moving it beyond just thinking about the media sector. But really,it’s the sectors where we have global competition here,in software and services,for example,hospitality and other things,where we created Indian powerhouses that can really go and compete outside,globally.

What’s been your most frustrating moment in India?

There have been a few,but they have been so outweighed by the positives. There are very few markets that have welcomed us the way that India has,the way that Indian customers have.

People say that all your problems get solved in Delhi. Every bureaucrat has somebody—a mother,mother-in-law,a wife,a daughter,a daughter-in-law—who’s watching one of your serials.

I hope so. I’m thankful for them if it’s true. Probably,the frustrations are when you see a lack of predictability in the environment,so that means new tax regimes,or ownership restrictions like in the television news business—what happened with Star News a number of years ago when they put an FDI cap-in. But these things are only frustrations. At the end of the day,we’ve actually been able to build a business here that has a lot of great people in it.

Have you ever thought of print in India? Or are you still worried about the 26 per cent limitation? Your father always says “I want majority”.

It’s really a question of how much we can take on and what we can do. Right now,the opportunity is so great in digital television. To continue to drive the digital television agenda and the creative agenda in our entertainment and television news business,that’s where we really are focused on. Everybody likes to talk about “what are they going to do about print in India” and what not,etc. We have some associations and licencing and we’ll continue with that. We publish books here,we have a joint venture with HarperCollins. The bigger point is that for us,India is one of our integrated kind of markets. It’s something that stands on its own two feet,relative to our European business,relative to our Latin-American and some of our American businesses. India for us is a global priority because the business,for us as an investor,has started to show so much promise.

Is this a very different country from the one you came to the first time in your life in ‘98? In fact,you mentioned it in your FICCI speech. You came to ski.

It was wonderful,we went up to Kulu valley,flying in helicopters to the high mountains. I had no inkling of how much time I would spend in India in the future and what a big impact it was going to have. But that first experience,going into Delhi and then waiting because the planes were cancelled,going up north and then getting up there. It is only 13 years ago. But looking at what’s changed in the country,it’s like a miracle has happened.

That wasn’t much after your…sort of crazy days at Harvard? Your bleached hair and your eyebrow…

I think it’s important to get your youthful indiscretions out of the way very early. To put them behind us.

And dropping out of Harvard…because that completes the classical global businessman’s CV.

Yes,well,I have a lot to live up to there in future,given the other dropouts.

You also drew cartoons at Harvard. Is there any that you remember?

They’re all a little risque for television. I always drew cartoons…and I still draw and paint as much as I can,with my children now.

You draw and paint,you do karate,you do competitive cycling. Tell me about cartooning.

I think the cartooning business was really fun. But the thing about the cartooning business is that you lay it out on the page and then you’re immediately accountable for what happened. So now I think about my old cartoons,there was one about World War I,there were others about basketball,there were all sorts of vague things and I’m only grateful that they all seem to have disappeared. They were pre-digital,you see. So they’re gone now. My favourite was about a quiet Hun named Albright who didn’t want to fight. And it was about his resistance to all of the peer pressure,of butchery and so on and so forth. And I got into a lot of trouble for that later on.

I was reading a profile,a piece that Emily Bell wrote on you in The Guardian. She said,“What is more dangerous than Rupert Murdoch? A 30-year-old Rupert Murdoch with a 12-billion dollar company.” That’s when you came to Sky. You proved her wrong.

I’m very proud of what the company did at Sky over the years,actually. To take a business from scratch 20 years ago and create something like it is today was something that has very rarely been done in the world. The Sky business is one that has delivered an enormous amount of choice,of quality to the customers.

In another profile,a writer says,“Rupert Murdoch’s idea was to make journalism sell. And James’s idea is to make journalism pay. “ Do you remember that line?

I do remember that line. My father has been an innovator in the business of journalism his whole life. And he’s built a business that—be it electronic journalism,print journalism,or the convergence of the two now with new digital products—is something we feel is in much,much better health than a lot of people think. And I think there are a lot of people in the journalism business who are worried about it. We look at our titles and our franchises and our channels and these are very healthy franchises. The key thing is,you have to be willing to make big moves. We have to be willing to say we’re going to do things that the establishment says can’t be done. Like charging for our news online,which,we think,is fundamental.

The New York Times has decided to do it.

I know they did. They have ignored the fact that they denied that they were going to do it for so long. But the fact of the matter is,there’s nothing wrong with charging a fair price for your product. Your customers will tell you if it’s unfair.

Do you think that problem is now cracked? Of making people pay for content?

I don’t think it’s cracked. It’s not really about making them pay,it’s about what they choose to pay for. If we look at television,if we look at the Indian marketplace again,120 million families pay for television from either their cable operator or their DTH operator and most of the successful channels in the business get affiliate income as well,much like the US cable system.

Another thing that’s said is,“Ink doesn’t run in James Murdoch’s veins.” You’ve heard that before.

In this business,across the company,there’s a lot of ink running around. We’ve been investing in the quality of our products,we’ve been innovating with respect to how we actually sell our products. For example,the pay products online and things like that. And the newspapers in the UK,where I’m based,are actually having some of their best years. The Sun newspaper,for example,just had a record year. I think journalism business is really at the core of our company. But more importantly,the journalism business and the newspaper businesses are really under-appreciated in terms of their future promise. I don’t ascribe to this idea that it’s a dying business,it’s old media.

But tell me,do Rupert and James have an argument once in a while? Tell me about one. Doesn’t matter whether you won it or lost it.

I usually lose them. He’s the boss,after all,right? For me,the important thing is that our discussions around decisions that the company makes and how we move things forward,usually end up in trying to get the benefit of all of the experience the company has.

What’s the most interesting thing he said to you? That’s close to your heart?

One of the things that really stuck with me was,someone was asking him if he could sum things up in one word. And he didn’t hesitate at all. He simply said,“choice”. And for me,that was so powerful. It’s really the culture that we tried to inculcate in our whole company. How do you provide additional choice for your customers? How do you provide choice that wasn’t there? And that’s about trusting a customer. And that’s a very powerful emotion.

James,we know you now to be the India specialist in the Murdoch family. It’s wonderful to have this conversation with you. It’s taken a long time happening. But I hope we have many more.

Transcribed by Rajkrishnan Menon. For full text,visit www.indianexpress.com