Murdoch, Fox News and the digital demographic cancer

English: FOX News Channel newsroom

English: FOX News Channel newsroom (Photo credit: Wikipedia)

For many observers, Rupert Murdoch escaped the UK phone hacking scandal in good shape. He split his empire between television entertainment from his newspaper and publishing.[1] The split appeared to improve both companies and increased profits. Yet, a cancer was metastasizing. A digital demographic cancer is eating away at Fox News and News Corp. Despite the desperate pivot to digital, News Corp’s earnings are being driven increasingly by non-news and information related areas.[2]

Rebekah Brooks and the digital dilemma.

Rebekah Brooks returned to News Corp to reverse declining circulation.[3]  She was to provide a digital strategy to improve News Corp’s position.[4] The Sun [5] is losing the digital battle with the Daily Mail [6] The charts tell the story.[7] News Corp digital strategy reflects an inability to see the news media differently than it is today. Murdoch missed the digital news shift and the rise of social media platforms. Twitter and Facebook are the preferred news platforms for younger viewers.[8] Who has time to watch Fox News when social media content is packaged and pushed via algorithms? Ailes was correct that people watch TV because they are too lazy to think.[9] What he and Murdoch missed is that algorithms will do the thinking.

Roger Ailes and the demographic decline.

Fox News is slowly dying. Murdoch and sons knew it had a cancer. The cancer was Roger Ailes. The trigger was not sexual harassment for they had no qualms about his behaviour for 20 years.[10] Instead, they faced the hard truth that he was not the future. The core audience average age is 68.[11] The channel is losing audience share and influence to media outlets who pursue a different, more radical agenda. These outlets rely on a different media/advertising model. They can broadcast more content through social media channels, with greater speed and responsiveness, as demanded by the new social media consumers.[12]

Path dependency in an age of social media platforms.

Brooks, Murdoch, and Ailes, are captives of their platforms and their thinking. Ailes believes that the medium does not matter as long as the political personalities are right. He is half right. The problem is that the politics, and personalities, have moved to a new platform. They are the vastly profitable buggy whip makers who did not grasp what the automobile was doing to their market.[13] As the market shifts, they are choosing the second or third best option.[14] They want advertising revenue without realizing that the market is now inverted. The platform does not make the material viral nor can they capture viral marketing on their platform to repackage it. Instead, it is the content that drives the advertising, which finds a platform. If it is in a newspaper, it is already yesterday’s digital news. The advertising reacts to the audience shares more than the material’s intrinsic nature or the platform. Buying an online advertiser or an online news company is not going to change it.[15]

A moderate Fox News requires Murdoch to leave.

Removing Ailes is not enough. Neither is Megyn Kelly their saviour.[16] Fox News profits path dependency constrains them. Any post-Ailes pivot will require Rupert ceding control to his son, perhaps *the* demographic problem.

 

 

[1] https://www.byline.com/column/2/article/85

[2] News Corp Chief Financial Officer Bedi Singh said in a call with analysts that domestic advertising revenue at the Journal fell 12% in the quarter year-over-year, “with declines in print partially offset by modest growth in digital.” http://www.wsj.com/articles/news-corp-reports-profit-on-book-real-estate-growth-1470691445

Curiously, this is the same message they had the year previously.

Circulation and subscription revenues fell 3% across the news unit.

However, overall revenues for the company rose 2% to $2.28bn as the book publishing and real estate divisions offset dwindling print revenue.

https://www.theguardian.com/media/2015/feb/06/news-corp-newspaper-revenue-falls-6-as-ads-and-subscribers-go-online

[3] 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/

[4] 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.

[5] http://www.newsworks.org.uk/The-Sun

[6] http://www.newsworks.org.uk/Daily-Mail

[7] The Sun

Mobile comScore Total unique visitors Total unique visitors 3,091,277
Smartphone comScore Total unique visitors Total unique visitors 2,512,828
Tablet ABC PAV (Publication active views) PAV (Publication active views)
Tablet comScore Total unique visitors Total unique visitors 637,927
Facebook /thesun Likes Likes 2,307,880
Twitter @TheSunNewspaper Followers Followers 1,160,000

Daily Mail

Mobile comScore Total unique visitors Total unique visitors

20,665,000

Smartphone comScore Total unique visitors Total unique visitors

17,412,706

Tablet ABC PAV (Publication active views) 25,433
Tablet comScore Total unique visitors Total unique visitors 4,727,789
Facebook /DailyMail Likes Likes 4,935,153
Twitter @mailonline Followers Followers 1,740,000

 

[8] http://www.journalism.org/2015/07/14/the-evolving-role-of-news-on-twitter-and-facebook/

[9] In a 1970 memo, the plan for putting the GOP on TV news seems prescient.

Today television news is watched more often than people read newspapers, than people listen to the radio, than people read or gather any other form of communication. The reason: People are lazy. With television you just sit—watch—listen. The thinking is done for you. Emphasis added

http://gawker.com/5814150/roger-ailes-secret-nixon-era-blueprint-for-fox-news

[10] https://www.washingtonpost.com/business/economy/a-big-divide-between-fox-news-ailes-sons-of-murdoch/2016/07/20/15094630-4ea8-11e6-a7d8-13d06b37f256_story.html

[11] http://www.thewrap.com/fox-news-oldest-tv-news-audience-cnn-youngest-in-2015/

[12] http://www.politicususa.com/2015/12/28/fox-news-literally-dying-age-younger-viewers-refuse-watch-fox.html

[13] The point is that the legacy issues and the path dependency doomed buggy whip industry not that it could not adapt or that parts of the carriage industry could not adapt. http://www.journalism.org/2015/07/14/the-evolving-role-of-news-on-twitter-and-facebook/

[14] https://www.news.co.uk/2016/06/the-drum-on-the-suns-digital-strategy/ This story puts a brave face on a dire digital situation for the Sun and more widely for News Corp.

[15] http://www.cityam.com/224492/news-corp-buys-london-adtech-company-unruly-media They also purchased Storyful. https://techcrunch.com/2013/12/20/news-corp-buys-storyful-for-25m-to-dig-up-verified-news-from-social-media-sites-like-twitter-and-instagram/

[16] http://www.nytimes.com/2015/01/25/magazine/the-megyn-kelly-moment.html

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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 democracy, journalism, management, new media model, public opinion and tagged , , , , , , , , , . Bookmark the permalink.

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