Rupert Murdoch's Expansionist Plans Rile British Media
RUPERT Murdoch has launched a twin-pronged bid to expand his already formidable global TV satellite holdings and force rival British newspapers out of business.
The chairman of News Corporation plans to offer British viewers a 14-channel TV service, viewers in Germany a six-channel service, and mass audiences in Asia an electronic ``open university.''
In addition, he will purchase Delphi, a Boston-based company specializing in the technology of producing electronic newspapers.
On the print media front, Mr. Murdoch has declared a newspaper price war in Britain with the aim of boosting the readership of the London Times and the mass-circulation Sun - at the expense of competitors. Murdoch cut the selling price of the Times from 45 pence to 30 pence this week.
The two moves have prompted Britain's opposition Labour Party to call for an investigation by the Monopolies and Mergers Commission. Labour claims Murdoch's growing cross-ownership of British media outlets is ``an affront to democratic society.''
Sources at News Corp. concede that the immediate objective of the Times price cut is to lure readers away from the daily Independent, which is suffering cash flow problems, and put the Times in second place in the daily broadsheet market, behind the Daily Telegraph.
The Independent, launched in the late 1980s as an up-market alternative to the Times, last week published a front-page appeal to its readers to remain loyal. It said it could not afford to reduce its selling price.
Earlier in the summer, Murdoch ordered a 5 pence cut in the price of the Sun. This produced an immediate 300,000 rise in sales, largely at the expense of a rival tabloid, the Daily Mirror.
Murdoch already owns five British national newspapers and has a 50-percent stake in Sky Broadcasting, the main supplier of satellite TV programs in Britain.
Under its expansion plan, Sky will offer nine new channels in addition to others that have been available in its first five years of operation. News Corp.'s global holdings already include the Fox network in the United States, 63 percent of Star TV in Asia, and 15 percent of the Seven Network in Australia.
Starting in October News Corp. will provide a satellite news service to southern Africa. Fox is launching a cable TV service for Latin America.
Speaking in London last week, Murdoch said his controlling interest in Star TV, based in Hong Kong, opened the way to ``a wide range of new planning.''
``Our ambitions include the creation of new channels with worldwide reach,'' Murdoch said. ``We will aim to create and cover global events, such as the search for the world's best young opera singer.''
In Britain his TV expansion plans and aggressive newspaper price-cutting campaign have angered leading Labour Party politicians. Ann Clwyd, Labour's media spokeswoman, accused Murdoch of ``dangerous and monopolistic expansionism.''
Murdoch rejects this view, claiming that his newspaper and TV initiatives are legal and that they will promote consumer choice and create jobs.
Will Wyatt, managing director of TV for the British Broadcasting Corporation, warned that Sky's plans would ``change the TV landscape'' and lead to more American programs being shown in Britain.
Murdoch's expansive approach to global television will bring him into bitter competition with Ted Turner's Cable News network and the BBC's TV World Service.
Raymond Snoddy, a British media analyst, says Murdoch is running a huge risk in Asia. Problems there include providing satellite dishes cheap enough for viewers in developing countries to afford. Mr. Snoddy predicts Murdoch will face charges of cultural imperialism.
Adversaries in the British newspaper industry say they are prepared to hold out against Murdoch's price-cutting campaign. Conrad Black, proprietor of the Daily Telegraph, says he has no plans to lower the paper's price. Frank Barlow, managing director of the Financial Times, insists that the FT price will stay at 65 pence.
At the offices of the Independent there is deep concern about the paper's ability to withstand a sustained price cutting campaign by the Times.