Phone hacking: despite appearances the centre of gravity has moved West

With the Murdoch’s due to appear at Leveson this week and Labour MP Tom Watson publishing his new book, Dial M for Murdoch, you could be forgiven for thinking that the UK remains at the centre of the phone hacking crisis engulfing the Murdoch media empire.

You’d be wrong.  Almost out of sight is a development which threatens News Corporation in the US, as opposed to News International in the UK and that is very, very significant.  The Dowler family lawyer, Mark Lewis, now claims that he is representing four individuals whose phones were hacked on US soil.  At least one is a US citizen.  Others are, apparently, coming out of the woodwork daily.

According to a Guardian report last week, there is evidence that Fox News, Murdoch’s US cable TV operation is now implicated.  For News Corporation, the holding company, this is a nightmare come true. 

If phone hacking has crossed the Atlantic then senior management at News Corporation could find themselves in the dock.  Federal law states that an individual who violates telecommunications privacy for commercial purposes can face five years in prison with a 10 year tariff for a subsequent offence.   What’s more, civil courts can also offer damages in relation to the profits gained by the violators with punitive damages possible thereafter.

How big a deal is this?  Let’s put it this way.  In the US, News Corporation's cable properties constitute over 60 per cent of operating income for the company.  With News Corporation making circa $1.06bn (£888m) net profit in their last quarterly filing to the SEC it is clear that any implication that Fox has been up to dirty tricks has massive implications.

However, it doesn’t stop there.  The Met Police’s investigation of bribery of public officials also has the potential to cross the Atlantic if it hasn’t already.  The Foreign Corrupt Practises Act offers the opportunity for the SEC to investigate the operations of News International in the UK but prosecute senior officials of News Corporation in the US.

The big question is, where does all this end?  My own view is that a number of very high profile people, some of whom have had access to the very highest levels of UK government (you know who I mean!)  are going to prison.  Probably for perjury, possibly for bribery and possibly for perverting the court of justice. 

Unfortunately James Murdoch, who was recently spirited out of the country to a new position in the US, in an attempt to distance him from phone hacking, may find that New York is uncomfortably close to the SEC headquarters in Washington DC.

Sun on Sunday faces a big battle for readers

I note my learned colleague’s blog from yesterday and his cautious optimism for the Sun on Sunday’s success, but I think it is worth taking a rather more sceptical view. Veteran Fleet Street watchers, like Roy Greenslade, have declared that Rupert Murdoch has pulled a rabbit out of the hat, simultaneously getting Sun journalists back on board after talk of mutiny in the ranks and reinforcing his commitment to UK newspapers.

I’m not so sure. It could equally argued that this is a short-term fix designed to appease the Sun mutineers rather than a real commitment. However, I can see the business logic in narrow UK terms, in that the new paper has the potential to do ‘massive numbers’ (as media planners are quick to tell us) and Murdoch needs a big selling ‘Sunday’ to bankroll his other loss-making UK newspapers.

But, and this is the crux, strong interest from advertisers does not always turn into strong sales and readership. Despite lots of positive vibes coming from media planners and News International, I still think it is going to be an uphill battle to get the British public to go out and buy in big numbers.

Firstly, it is going to be very difficult to get back all of the NOTW’s 2.6 million readers in an overall market for Sunday newspaper reading which is in decline. In August 1991 national Sunday newspapers collectively sold an average of 16.2 million copies. By August 2001 this number had reduced to 13.6 million. By August of last year it had fallen it had fallen off a cliff to a mere 8.3 million.

What’s more, circulation figures from last year suggest that, as my learned colleague notes, that more than a million NOTW buyers appear to have vanished into thin air. They did not switch allegiance to the Sunday Mirror or The People or The Mail - they just left the market entirely.

Secondly, reaction from competitors is likely to be brutal in terms of price-cutting and other incentives, as those titles which benefited from the closure of the NOTW attempt to hang onto their gains. News International will launch with huge promotional activity, but all of this eats into profits and cannot be sustained over the long-term.

Finally, there is one other issue which is going to make life difficult for this successor to the ‘Screws’. The NOTW made its name exposing the antics of the rich and famous, but we now live in an era of super-injunctions which can stop an invasion of privacy in its tracks. What’s more, the newspaper industry is fully aware that the Leveson Inquiry is on-going and is on its best behaviour. It will take a very brave editor indeed to splash a typical NOTW scandal story, of the type that made its predecessors name, in the opening weeks of this new venture.

News International will be very gung-ho about this weekend’s circulation figures regardless of what happens, but the real proof will come in March, April and May as the market begins to settle down again. I’m no media buyer, but I suspect with a print run of three million, News International will be hoping for an opening weekend north of NOTW’s final circulation figure of 2.6 million. That is an awfully tall order to sustain once the initial excitement wears off.

Just how will The Sun set this Sunday?

So, the empire strikes back! Just when his back was against the wall, the old devil finds his elixir and comes out all guns blazing. What chutzpah! 

Yes, for those of you that haven’t heard, there is a ‘new’ Sunday tabloid in town (although how ‘new’ is probably up for debate). Media oligarch Murdoch has given an octogenarian’s last throw of the dice in what’s been a turbulent 12 months and announced the Sun’s highly anticipated Sabbath day edition. News Corps’ Sunday saviour will be hot off the press this weekend.

It might be worth comparing at this point, Murdoch’s bullish announcement that the Sunday Sun was on its way with that doddery appearance before the select committee last July. But alas, this is just an aside and I shan’t begin to assess Murdoch’s flourishing acting career. The real issue at hand is will the Sun on Sunday be the rip-roaring success it is being hyped up to be?

Inspecting the numbers, probably yes. It would appear that the News of the World's demise weakened the market overall. Of the News of the World's 2.67m sales, 1.3m simply disappeared. Half the rest went to the Sunday Mirror; the rest were split between the Daily Star Sunday and the People. Initial gains by the Mail on Sunday were rubbed out, although the Sunday Express made a little progress. Clearly media tycoon Murdoch has seen an opportunity to regain market leadership.

On the other hand however, and I could be wrong here, I’d imagine that a lot of the NOTW’s readers also turned more predominantly to online – real-time gossip from the glittering twitterati perhaps? It’s not just an online liberal coffeehouse you know! Similarly, the MailOnline hasn’t been doing too badly either.

Still, based on the numbers, the Sun’s promotional power and Murdoch’s resilient, death defying nature, I’d expect the Sun on Sunday to do rather well. There are more long-term issues at hand of course, like the growing revenue threat of social media and online news, and also the very necessary decontamination of News Corps’ brands.

As a PR person, I welcome the news of a Sun on Sunday and hopefully a revived Sunday newspaper market, but how long will it last in this form? When will social news become a genuine threat to traditional media’s revenue stream? I might be inclined to argue that it already is. As far as I can see, Twitter may not have pointless helpings of page three nudity, but this can be sourced elsewhere on the net, as Charlie Broker remarked last week, “on pages three to three billion and three.” 

This all leaves me thinking; in the long-term, will the Sun on Sunday not just be a bit outdated?

 

2012 – The year of the Tweeting Twit

Let’s all be honest, when celebrities first got on Twitter, fearlessly spouting forth from the round table of life, it was quite satisfying to see the occasional fall from grace in the form of an all too honest tweet. Twitter, quite expertly liberalised us from the age of publicity-vetted blandness - note @RupertMurdoch’s most recent tirade against Obama and Google recently blogged about here. However, it would appear that politicians too are falling victim to stupidity’s tendency to go viral! 

Yes, it’s been a bit of a false start to the Olympic year for some of Britain’s more politically motivated Twitterati! There’s been a triple entente of 140 character social media faux pas’ already, ending in nationwide trending hash tags - effectively a mass digital sniggering from the online populace.

So strike one: Diane Abbot (@HackneyAbbott) tweets, “'White people love playing 'divide & rule. We should not play their game #tacticasoldascolonialism.” With racial tension resurfacing amidst the Stephen Lawrence murder trial, it’s safe to say @HackneyAbbott was justifiably the first tweeting twit of the year.

Strike two: You’d think the calls for Abbott to resign after her 140 character fail would have resulted in slightly more diligent proofreading. At the very least the party leader would make sure the messages he pushed through the channel were fitting. Well, no. Ed Miliband (or someone in his digital team) let loose a rather inconvenient Freudian slip in a tweeted tribute to Bob Holness. Safe to say, Bob won’t be fondly remembered for ‘Blackbusters.’ Tweeting twit number two.

Strike three: MP Tom Harris, the Labour party’s ‘social media guru’ or ‘Twitter tsar’ (these titles are already open to debate after strike’s one and two) tweets a Downfall parody of SNP leader Alex Salmond and is forced to resign. If there is a no go area in UK politics it is Mein Führer. You’d think a social guru would have been aware of the parameters within which to operate such digital prowess. At least we found the source of the problem - tweeting wit number three.

Fact of the matter is, these are all fairly regular, minor gaffes (bar the Hitler one from MP Tom Harris, that was plain idiotic), but with quite large repercussions online. Quite simply, when you’re something of a someone on social media the key is to remember that age old adage and ‘think before you tweet.’

Rupert doesn’t get the internet, but it doesn’t stop him hating it!

Good to see Rupert Murdoch in the news again, tweeting away with a careless abandon that must be giving News Corporation’s communications people a nervous tic every time another little missive pops up.

Rupert’s latest 140 character musing involves his current bête noir, namely Google, who have previously been described by Rupert and his lieutenants as "leeches", "pirates", “bloodsuckers”, you get the drift!

A few days ago Rupert tweeted the following, “Piracy leader is Google who streams movies free, sells advts around them. No wonder pouring millions into lobbying.”

Now Rupert is a little bit confused here as Google obviously does not pirate or serve pirated content and certainly doesn't sell advertising on it. All Google does is help you find the content, pirated or not.

However, never one to let facts get in the way of a good story (a little Leveson allusion there readers!) Rupert ploughs on. “Just been to Google search for mission impossible. Wow, several sites offering free links. I rest my case.”

Oh dear, memo to Wendi: You really do need to wrestle that keyboard off him!

Now I’m not in the habit of making fun of octogenarians but there is a wider point here. Currently going through the US Congress is a Piracy Bill which is going to attempt to put all sorts of restrictions on the web and filesharing (you may have noticed Wikipedia and other sites blacked out yesterday in protest). The main drivers of this bill are big business, namely News Corporation, the music industry etal who are being hammered by “free” information on the web.

The suspicion is that these corporations however are trying to protect increasingly bankrupt business models, such as buying a CD or reading a newspaper, when new models are being called for. In the same way that the flying shuttle tore up the rules and ushered in the Industrial Revolution, the internet is creating a new era of information sharing.

Rupert however, clings to the past and a world where the only source of information is News Corporation. His ideal customer is someone who reads The Times, watches Sky News and 20th Century Fox movies, listens to a Murdoch radio station and reads a book published by Harper Collins - possibly not even aware that these media are all owned by the same company. And, crucially, Rupert uses all these different media to cross-reference and link to each other.

The internet is breaking up this cosy little world and one suspects there is no going back unless Congress cannot see through the motives of big business.

No hacking required - Rupert Murdoch is on Twitter

Yes, the Billionaire CEO of News Corporation has joined the twitterati, amassing more than 80,000 followers in the process! Considering the humble pie that was served to Murdoch this year during the course of hackgate and with the mogul being a much-maligned public figure in the UK as a consequence, this could be quite an interesting venture! 

So, what does a press veteran say in 140 characters? Well, the majority of tweets so far come littered with slightly awkward punctuation akin only to when your grandmother battles with predictive text, covering culture, politics and day to day antics; already Murdoch is displaying his distaste for the Brits – a feeling no doubt reinforced throughout 2011. 

 

Many will suspect an agenda behind the old timers move in to social media that is more than just a pensioner’s curiosity, however, whose idea it was I’m not sure. Perhaps the most telling comment so far comes from Murdoch himself with one of his first tweets reading - “I’m getting killed for fooling around on here and friends frightened what I may really say!” 

I’m sure they are. Wife Wendi certainly wasn’t approving! I also can’t help but think of the awkward looks James was giving his old man during the Select Committee interviews back in July – no doubt he now feels like most teenagers do when their parents add them on Facebook.

Image can be a delicate thing, especially in the realm of social media. I’d therefore hazard a guess that News Corp’s PR are also wincing at the thought of the boss tweeting – particularly if we are to see more of the above!

Furthermore, whilst my sympathy for the man could fit in a Japanese thimble, I am also cringing at the thought of the avalanche of abusive tweets that will now be directed straight at the octogenarian - just yesterday the hashtag #Murdochsdeletedtweets was trending (after deleting the above tweet at the request of Wendi). Then again, perhaps right now all concerned are more pre-occupied on the possible attempts to hack his password? Oh, the irony.  

Whilst Twitter could make a mockery of Mr Murdoch, one thing is clear - as Jack Dorsey said, “With his own voice, in his own way, Rupert Murdoch is now on Twitter.” Certainly, as Piers Morgan also commented, “This will be fascinating…”

I wonder if he’ll follow @tom_watson?