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Submission to Ofcom on News Corp.'s proposed takeover of BSkyB E-mail
Written by Jonathan Hardy   
Thursday, 06 January 2011 16:15

News Corp/BSkyB Public Interest

 

As National Secretary of the Campaign for Press and Broadcasting Freedom I fully endorse the CPBF’s submission and so will not repeat here the points made there. However, I wish to add some additional comments on the issue of cross-promotion.

 

At present, the opportunities for corporate cross-media promotion between News International newspapers and BSkyB, while extensive, are restricted in important ways. While, News Corp has a controlling share in BSkyB is it not able to dictate policy so as to maximise resources for cross-promotion. News International can cross-promote BSkyB, but the ‘reverse flow’ of promotions from BSkyB is not entirely in News Corps control. The presence of other shareholders and the role of independent board members places limits on News Corp. Total ownership of BSkyB would allow News Corporation to undertake far more extensive, and more integrated, cross-promotion.


As Lord Puttnam stated in the House of Lords debate (4 November):

With the opportunities that cross-subsidy, cross-promotion and the bundling of services would bring, we could easily see News Corp's dominance in newspapers increase far beyond its present share. It is not in the interest of a plural society for a singular mindset or entity of any kind to hold that degree of influence, political patronage or commercial power.

 

The problems of cross-media promotion

 

Cross-promotion has been a neglected issue in media regulation. However there are a range of important concerns that arise.

 

i. Market Power

News Corporation can use intra-firm cross-promotion as a tool for market advantage over competitors. There can be a very significant advantage if media outlets give editorial coverage that promotes and benefits other media or services within the company. Intra-firm advertising arrangements and rates can benefit firms over competitors. Firms may restrict the opportunities for competitor firms to use its media for their promotions. There can be various ways used, both in editorial and in advertising, to ‘lock out’ competitors. For instance in the late 1998s several reports on digital television in NI papers, particularly the Sun and News of the World, promoted Sky services but simply ignored the alternative services provided by OnDigital and digital cable.

 

ii. Media Power

 

Amongst the principal problems of cross-media promotion are the integration of editorial and advertising and the shaping of media content in accordance with corporate media interests. But cross-promotion raises problems of ‘media power’ not just market power. The example of digital TV coverage, above, concerns both. Cross-promotion may be used to promote corporate or commercial interests in editorial at the expense of fairness to competitors’ or viewers’ interests. More broadly, cross-promotion may undermine editorial independence. With the extension of ‘promotional’ speech into media content, the separation between editorial and advertising is also further eroded. Where there is lack of disclosure in editorial or other ‘media’ content, corporate or commercial interests may be disguised.

 

So, cross-promotion may increase market power and raise barriers to market entry that serve to limit the range and diversity of content available. Cross-promotion also increases the influence of media platforms, services and brands relative to those lacking such promotional resources.

 

The ‘problems’ of cross-promotion may be conceived in terms of the impact on media diversity. A second concern, connecting both citizens’ and consumer welfare, is that media content may be misleading. A third problem is that of misrepresentation or distortion in editorial content arising from the interests of those who own or control media. Here cross-promotion needs to be considered alongside broader concerns about proprietorial, corporate and commercial influence on editorial. A fourth problem of cross-promotion is the influence of commercial (‘promotional’) values on media content.  Such concerns arise, for instance,  where the dominance of a commercial, promotional ethos across media ‘serves to close down creative alternatives, offering only a narrowly acceptable range of content tied to corporate megaprofits’ (Andersen 2000:7).

 

Cross-promotion of BSkyB in News International newspapers

 

I carried out research into the cross-promotion of Sky/BSkyB in News International’s UK newspapers. This is published as a chapter 'News International: A Study of Editorial Cross-Promotion' in Hardy, J (2010) Cross-Media Promotion, New York: Peter Lang. The following is a short summary.

 

That Murdoch-owned newspapers have been used as vehicles to promote News Corporation’s other media and corporate interests is a largely accepted charge and commonplace observation. It appears in numerous academic works and student textbooks. However, some scholars and others have objected that while there is evidence of such promotion, and numerous accounts by journalists themselves, evidence remains largely anecdotal. Others object that explanations of corporate or proprietorial influence have been both analytically weak and difficult to prove.

 

In November 2007 Murdoch met members of the House of Lords Select Committee on Communications (2007) in New York; he ‘insisted that there was no cross-promotion between his different businesses. He stated that The Times was slow to publish listings for Sky [television] programmes. He also stated that his own papers often give poor reviews of his programmes’. Murdoch’s denial, and coyness, in 2007 concerning newspaper cross-promotion is in stark contrast to News Corp.’s promotion of synergies and cross-promotional integration across digital media, in particular global satellite television and interactive services. In July 2005 News Corp. purchased Intermix Media, owner of Myspace.com, the fifth most-viewed Internet domain in the US for $580m (£332.85m). The social networking site, Murdoch announced, would drive traffic to his Fox TV sites. Like all the major media conglomerates, News Corporation has advanced cross-media promotion extensively both in working practices and in corporate statements. For instance, News International (2000: 4) argued it was anomalous that it:

cannot produce news programmes on licensed television services under the reassuring brand of The Times or its other titles. Meanwhile, News International and every other publisher are perfectly free to provide, via the Internet, streamed video material similar to a television service that is virtually unrestricted in respect of “masthead” and other television programming and advertising rules.

 

Murdoch told BSkyB’s AGM (BSkyB 2000: 4), that ‘[a]llied to its TV-based interactive applications, BSkyB is developing a range of new media services with the aim of providing seamless content across all platforms’. Such statements show corporate efforts to promote and capitalise on the extension and normalisation of cross-promotion.  But if promoting new services has been licit, subverting editorial independence to promote owners’ corporate interests has not. Given this tension, it is important to trace how cross-promotion in newspapers has taken place and how it has been assessed by journalists themselves and critics alike. Against this background, my research examined evidence of cross-promotion in Murdoch’s UK newspapers. It considered whether newspapers owned by News International (NI), a wholly owned subsidiary of News Corporation, cross-promoted Sky-Digital in which News Corp. had a near 40 per cent controlling share. It investigated evidence of cross-media promotion of BSkyB in NI papers primarily though a comparative analysis of newspaper content in October–November 1998, when SkyDigital and ONdigital launched digital television services.

 

The main findings of the research are as follows:

 

Cross-promotion in News International papers did not confirm a hypothesis of ‘strong’ systematic corporate control. There was evidence of extensive cross-promotion in both editorial and advertising but promotional resources were not deployed fully and consistently across News International (NI) titles. For instance, the News of the World, the paper with the largest readership, devoted less space to all varieties of BSkyB promotion than other NI papers.

 

There was also evidence of journalistic autonomy in instances of criticism of Sky in NI papers. Nevertheless, in editorial coverage, there was a clear tendency for NI papers to favour Sky. Moreover, all NI papers tolerated forms of explicit editorial cross-promotion. Here, the most unequivocal evidence of cross-promotion was the use and content of advertorial supplements deployed across all four NI titles during the period.

 

The strong identification amongst NI editors and journalists with Sky, characteristic of the 1988–1991 period examined by the Sadler Enquiry, was less evident. However, while news, media, business and financial journalists in the broadsheets tended to offer a high degree of impartiality (and disclosure of ownership interests), there was evidence of close identification with, and promotion of, BSkyB by sports and entertainment journalists.

 

The research looked beyond news content and editorial material, to content that is usually neglected in analysis, such as TV listings, reviews and critics choices. This meant attending to areas of newspapers characterised by greater anonymity. Listings in News International newspapers favoured Sky and gave disproportionate coverage to Sky channels.

 

Only the corporate commercial interests within News Corp. adequately explain the disparities in coverage between NI and comparable papers. Cross-promotion provided competitive advantages for Sky against its main competitor service (even though many other factors influenced the collapse of ONdigital/ITV Digital).

 

Such cross promotion has consequences for economic competition. Sky had a privileged site for non-advertising promotion in NI papers which the competitor service, then called ONdigital, was not able to match. Cross-promotion has consequences for the quality of editorial, in this case the degree to which editorial favoured Sky over ONdigital. It has consequences as ‘commercial speech’ becomes more pervasive, and corporate interests affecting media information or opinion are often disguised, or at least unacknowledged. And it has consequences if media power can be strengthened by deploying promotional resources in ever more intensive ways to cross-promote intra-firm interests against those of competitors, as News International did in 1998.

 

News International and the Sadler Enquiry into Cross-Promotion

 

News International’s cross-promotion has been the subject of regulatory scrutiny before, most notably in the Enquiry into Cross-Promotion undertaken by John Sadler in 1989 (see Hardy, J (2010) Cross-Media Promotion). British Satellite Broadcasting (BSB) made a complaint to the Office of Fair Trading (OFT) about unfair Sky advertising, which was passed to the Advertising Standards Authority (ASA). Then, in December 1988, BSB commissioned the European Institute for the Media (European Institute for the Media 1989) to produce an independent report, which found disproportionate coverage of satellite TV in Murdoch’s papers compared to other newspapers. Further weight was given to the charges when Tim de Lisle, arts editor of The Times, resigned in protest after his page was remade without consultation to feature a prominent promotion for a production of Carmen being shown exclusively on Sky. This, de Lisle argued, undermined editorial independence and credibility. The House of Lords Select Committee in 2008 described the studies conducted into Sky’s satellite television launch in 1988/9 as amongst the ‘few systematic studies of cross-promotion’.

 

In the 1980s claims that The Times carried articles criticising the BBC, and advocating its dismemberment, as part of a campaign to further Murdoch’s commercial interests, were rejected by the papers independent directors (The Times 1985) but later research found that the ‘editorial and reporting approach to broadcasting matters being pursued by News International was having a material effect on the opinions of readers’ (Barnett 1989: 19):

 

Whatever the editorial intentions, concentration of newspaper ownership is clearly capable of being exploited to promote the owners’ interests elsewhere. Largely, it seems as a result of reading its newspapers, significant numbers of people hold views which are patently to News International’s financial advantage.

 

Research studies have shown that Murdoch' s UK newspapers have invested in extensive editorial cross-promotion for allied media interests, including BSkyB.

 

The proposed acquisition of BSkyB by News Corporation should be rejected. It needs to be rejected because of the very detrimental impact it would have on media pluralism and diversity, and it needs to be rejected because the media resources, including cross-promotional resources, of the merged firm could be exercised to damage competitors and undermine the quality of media content.

 

 

 

References

Andersen, R. (2000) ‘Introduction’ in R. Andersen and L. Strate, Critical Studies in Media Commercialism,

Oxford: OUP.

Barnett, S. (1989) Cross-media Ownership and Its Impact on Public Opinion: A Case Study, London: Broadcasting Research Unit (available from Voice of the Listener and Viewer).

BSkyB (British Sky Broadcasting) (2000) Chairman’s Statement (3 November).

European Institute for the Media (Europäisches Medieninstitut) (1989) Events and Issues Relevant to Competition in Satellite Television Between British Satellite Broadcasting and News International, Research Programme on Multimedia Concentration and the Free Flow of Information, Case Study No. 1, Manchester: European Institute for the Media.

Hardy, J (2010) Cross-Media Promotion, New York: Peter Lang

House of Lords Select Committee on Communications (2007) ‘Minutes of the Visit to New

York and Washington DC’, 16–21 November 2007.

News International (2000) Response to Invitation for Comments on the Communications Reform White Paper, London: News International Plc.

Sadler, J. (1991) Enquiry into Standards of Cross Media Promotion: Report to the Secretary of State for

Trade and Industry, Cm1436. London: HMSO.

Times, The (1985) ‘The Times and the BBC: A Statement’ (19 June).

 

 

Contact details: Dr. Jonathan Hardy 

Senior Lecturer in Media Studies and Programme Leader BA Media Studies 

School of Humanities and Social Sciences, 

University of East London, 4-6 University Way, London E16 2RD 

Tel: +44 20 8223 6266 

Email:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  

 

 

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Last Updated on Thursday, 06 January 2011 16:16