Rebekah Brooks’s return: a poisoned chalice or a burning throne?

Some commentators view Rebekah Brooks’ return as CEO of News UK as a success.[1] She has returned from New York, where she had moved after her acquittal of phone hacking charges. In New York, she worked on digital opportunities as part of Murdoch’s digital strategy. Her main success was she helped acquire Storyful. On the surface, her return appears triumphant. Is it?

Loyal retainers for key posts in the game of thrones

The Murdoch Empire is crumbling. His recent health scare[2] forced him to confront the company’s future and stabilise a clarified line of succession and control. However robust those arrangements, though, he needs loyal retainers to make sure his family’s control. Although her post is less important than first order posts at Fox News and Fox entertainment,[3] she provides loyalty, and talent.[4] He does not want other people to succeed on his money, which is why loyalty is more important than talent.[5]

If you cannot make it in NY, then try London?

Despite her talent and loyalty, she had limited impact in NY or LA. In NY, the sons do not trust her and the family blame her for the phone hacking fiasco. More importantly, Roger Ailes will have had no time for her in Fox News. In LA, she would not have the entertainment background to take charge.

Focus, energy, and profit are the questions, does she have the answers?

She has returned to manage the company’s response to declining print sales and lack of strategic energy. The company [6] is losing readers at an accelerating rate. Digital subscriptions have not offset the loss as well as hoped.[7] Mired in the phone hacking scandal, Murdoch lost focus on the emergent digital news ecosystem. His approach to digital news reflects a print perspective that forces him to play catch up and hinder an effective response.

Old players do not make for a new team

The Sun’s recent decisions reflect old thinking. They rehired Kelvin McKenzie, a relic of their past. His most infamous headline “The Truth” reminds readers, like an open sore, of tabloid toxicity. Is the Sun unable to nurture or attract new tabloid talent? Even Louise Mensch and Katie Hopkins, who are talented, reflect a previous era.

Will she bring News Corp to the digital age?

The Sun’s subscription paywall initial success has not solved the problem. The paywall hinders strategic flexibility, as content and brand are problematic.[8] Storyful[9] is not working as planned.[10] It is still losing money[11] and it only redistributes, rather than produces the news. The business model, repackaged user generated content (UGC) redistributed to marketing firms, is not integrated.[12] The company’s digital news vision is uncertain and Circa’s fate shows the challenge.[13]

The brand‘s toxicity, Katie Hopkins response to the refugee crisis is indicative, limit sharing. Users are not sharing News Corp content. People want content they can share. Yet, the company’s model hinders them.[14] The strategic focus is muddled and contradictory.

Is London a reward or punishment?

Rebekah Brooks has returned to a burning throne. As the overall empire prepares for a civil war, she as the unenviable task to put out the fires and create a viable digital future. Is London a poisoned chalice for a retainer who has failed or a platform to demonstrate her prowess?

[1] See http://www.ibtimes.co.uk/rebekah-brooks-triumphant-return-murdoch-empire-news-uk-chief-executive-1518188 and http://www.nytimes.com/2015/09/03/business/media/rebekah-brooks-to-return-to-news-corp-on-monday.html?_r=0

[2] Rupert Murdoch fell and had a hairline fracture on his spine. He has recovered, yet it showed his fragility and the uncertainty over succession and control of his companies. http://www.afr.com/brand/boss/what-happens-after-rupert-murdoch-falls-20150115-12qsal

[3] The post is a strategically important one. Rebekah Brooks is an important corporate officer. It is central to the UK market with a strong global influence although not as powerful as FOX news. Roger Ailes is Chairman and CEO of Fox News and the Fox Television Stations Group.

[4] Too many commentators under estimate or downplay RB’s skills and experience. She has not succeeded in the newspaper business because she is arm candy or charming. She understands power, relationships, and how gain access to the UK’s politically powerful. However talented and skilled she is, her skill set and experience do not, yet, extend beyond the UK.

[5] Rebekah Brooks is incredibly talented and capable as a corporate officer and a newspaper professional. Too often, critics underestimate her skills and experience. However, she is not is an innovator who will provide the company’s digital vision. She can deliver projects it remains to be seen whether they will be the right ones to save the company.

[6] https://econsultancy.com/blog/66002-newspapers-and-subscription-barriers-what-works-best/ The article during the early apparent success of the paywall subscription service paints an upbeat message that masked the deeper problems. Issues such as customer service remained a hidden problem. https://econsultancy.com/blog/65424-the-sun-on-customer-service-and-life-behind-the-paywall/

[7] http://www.theguardian.com/media/2015/feb/06/news-corp-newspaper-revenue-falls-6-as-ads-and-subscribers-go-online and http://www.themediabriefing.com/article/the-sun-news-uk-dinsmore-duncan-digital-subscriptions This shows low share rates for News Corp papers. They are playing catch up. Old thinking reflects pervious business models. The subscription model for cable and newspapers are based on the model where a company can hack a rival’s system and offer free hacking tools to sabotage a rival’s profitability. http://www.theguardian.com/technology/2012/apr/01/bskyb-itv-ondigital-hacking-nds All charges that News Corp have denied.

[8] The Sun has bowed to the market and scaled back its paywall. http://www.theguardian.com/media/greenslade/2015/aug/20/the-suns-boost-in-online-browsers-proves-paywall-strategy-was-wrong

[9] http://www.dailymail.co.uk/news/article-2974020/New-York-job-lures-Rebekah-Brooks-moves-Oxfordshire-new-offer-Rupert-Murdoch.html

[10] https://storyful.com/ For more about the company see this Reddit thread. https://www.reddit.com/r/IAmA/comments/2sam66/we_are_storyful_we_help_content_creators_and

Because the newswire is a private subscription-based tool, we don’t usually offer access to non-clients.

About 80% of the content in the newswire is cleared for use by the content creators with credit to them – and that’s typically all they want, especially on videos of news value. The other 20% or so, where there is commercial value in the content, we enter into revenue arrangements with them. If a content creator doesn’t want us to make their content available for download, we will make it so our clients can contact them to negotiate their own usage rights and payment situations.

[11] http://www.irishexaminer.com/business/storyful-losses-rise-in-first-year-of-murdoch-reign-348342.html

[12] http://www.ibtimes.com/news-corp-using-storyful-help-brands-find-viral-cat-baby-videos-1909282

[13] http://circanews.com/news/goodbye Circa news is a different business model. However, it shows the perils of digital news. News Corp has more resources so it is not going to disappear. What is happening though is that it is losing readers who want news they can share. More importantly, they want a platform they can return to repeatedly beyond the headlines. The issue is not in-depth reporting so much as reporting that more than ephemeral. Readers will return to it and use it as a resource.

[14] http://www.theguardian.com/media/greenslade/2015/jul/08/the-sun-lowers-its-paywall-allowing-free-access-to-many-stories

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About lawrence serewicz

An American living and working in the UK trying to understand the American idea and explain it to others. The views in this blog are my own for better or worse.
This entry was posted in journalism, management, politics, reputation management and tagged , , , , , , . Bookmark the permalink.

One Response to Rebekah Brooks’s return: a poisoned chalice or a burning throne?

  1. Good article although I have yet to spot any talent from Mensch or Hopkins other than self promotion which uk readers Are less responsive too than across the pond. I have also started to notice both have lost their “shock value” already and are already jumping sharks in order to retain some semblance to it.

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