James Murdoch Attacks BBC’s Global Ambitions
James Murdoch spoke out against the BBC during his Alternative MacTaggart speech at the Edinburgh TV Festival. Son of Rupert and CEO of Asia’s Star TV, he derided Greg Dyke’s insistence that the BBC was a “leading global player”.
“Indeed, no one working in media outside of Britain regards the BBC as a competitor”, he said. His comments came during a speech emphasising the shortsightedness of many media companies in the west which fail to look outside English-language-based programming and markets.
Alternatively, he said, media firms should look beyond their home markets if they wish to truly compete in a global marketplace. “While media firms do and will continue to thrive in their various home markets, if they aspire to compete in the global marketplace, as many say they do, they must focus real resources on the four largest language groups of the world. Prioritizing development within the Mandarin, English, Hindi, and Spanish language markets, will be key to continued, sustainable growth, well into the foreseeable future.”
The following is an edited version of the speech delivered by James Murdoch at the Guardian Edinburgh International Television Festival, on Sunday.
The last decade of media industry navel-gazing seems to me to have been dominated by two major themes. The first one is that the era of “Big Media” – consolidated, multi-national, multi-service corporate powerhouses – has ushered in a rash of exploitative, lowest common-denominator content that is destroying the cultures in which it is disseminated.
The second is that the internet has changed everything, resulting in new vs. old paranoiac fantasies about every traditional media firm suffering the same fate as Time Warner, that of being gobbled up.
Americans are worrying about declining standards. Europeans are worrying about their standards becoming American, and everyone is worried about the internet. But the obsession with the above comes at the expense of a broader discussion that shouldn’t be given such short shrift. Modern, so-called “Big Media” needs to grapple with the basic worldwide demographic trends that will shape our industry, and all others, over the next century, and indeed, well beyond it.
The pressing problem is that most media companies have failed to understand what it means to be a global company. No where is this more true than in the Anglo and American countries that have assumed that simply broadcasting around the world, CNN-style, or exporting English language films, is a sufficient global strategy.
As an illustration, let’s look at language. It is clear that the world is moving towards four dominant language groups: Mandarin, English, Spanish, and Hindi. Furthermore, the advent of a connected media marketplace is accelerating and compounding this reality in a very real away. These four language groups have emerged as the leading forces in the world for the foreseeable future.
If you are competing in the global media business, these forces are irresistible, and one ignores them at great peril. They define our audience quite clearly. They are more powerful than geography or politics. And they create markets far broader and more dispersed than anything we have ever seen in any one region. Some might argue that what I am really talking about is cultural affinity.
I am not. I would argue that language grouping is an ultimate enabler and that cultural affinity, in contrast, is a relatively proximate outcome, though still a crucial force. This is not to say that these are the only audiences that matter. Of course, secondary language groups provide the audience base for strong businesses across the globe.
But while News Corporation may be active, for example, in the Tagalog market, with two 24-hour entertainment channels in the Philippines, or with our investments in Germany and Italy, these businesses can not, by definition, constitute global enterprises in their own right. The uniqueness of the four primary language-delineated audiences is that each are global, spoken by a worldwide audience from Edinburgh to Wagga Wagga, in the case of English, or from Mumbai to Silicon Valley and back to Edinburgh in the case of Hindi. Again, the point is so obvious that few seem to take it seriously, despite occasionally mentioning the subject of globalism to the Street or the City, depending on the mood of the analyst community.
The problem is especially acute in the U.S. and Britain, where the notion of cultural imperialism marches onward, unaware of surging non-English markets, or worse, quite aware of them but still believing that the lingua franca of the modern age is and will continue to be English. “Why bother with anything else?” seems to be the prevailing attitude.
Because the audiences in these language groups don’t necessarily care what the BBC or America Online, or any other foreign media exporter, has provided them. They are looking for information and entertainment specifically crafted for them. If the existing global media giants won’t provide it, there are dozens of smaller, enterprising companies that recognize the importance of these language groups. Unlike their established competitors, they are actually catering to the demands of the fastest growing media markets in the world.
Let me return to a BBC speech I mentioned delivered here in Scotland, four years ago, when Lord Birt, then director general of the BBC, was invited to give the MacTaggart Lecture. His speech was titled, predictably, “A Glorious Future – Quality Broadcasting in the Digital Age.”
An imposing title, but as far as I could tell from reading it, Lord Birt was really just asking for more money from British taxpayers. Curiously, I think that’s what all the speeches I read were really talking about. To make his case, Lord Birt suggested that there were two dangers the BBC faced.
One of them was something irrational about electronic program guides. Describing the other one, he said: “The easy availability of programmes and services worldwide will encourage the emergence of a single global culture – and that the huge increase in competition that the digital age will bring will result in a drop in programme standards.”
Furthermore, he added, that: “A single global culture will mean an Americanised world culture. That is not because the United States is wicked – but rather because of the power and vitality of its economy and the worldwide reach of the English language.”
I believe the good Lord made two fundamental and all-too-common errors. The first is that there is some sort of causality implied between global cultural homogeneity and programme quality. Which I would argue, perhaps on another day, is false.
But the second, more serious error, and one which prevails in many parts of the world is that the English language is bound to dominate the global communications industry. Birt’s sentiment, still shared so widely in the media offices of London, New York, and Los Angeles, is emblematic of the prevailing arrogance of Anglo-Americanism.
It is the notion of unilateral linguistic manifest destiny, a theory that, while superficially attractive, is blissfully ignorant of what is going on around the world. Let me try to make my case by looking at the global media landscape as a series of audiences. I believe that even the most cursory examination makes it clear not only that the four major audiences dominate, but that they will continue to do so.
Mandarin is clearly the largest language group, with 835 million native speakers in 1999. English is a distant second, with 470 million, followed by Spanish at 330 million, and Hindi, at 300 million. Even if you included English as a second language, you still have the same order. Looked at this way, even the powerhouses of the Eurozone constitute modest audiences, at best: there are only 113 million native French speakers. And only slightly more German speakers.
We all take it as a matter of course that media firms need to be global. But what we need is a way to quantify that globalism, and we need to hold firms accountable against real-world benchmarks. Quantitative globalism hinges on production capacity and distribution leverage within, I believe, at least three of the major language markets. It means building efficient and robust production capacity in the very places where the audiences are largest, and growing. It means creating programming and services by, for, and of their constituent markets.
It is the key to long term growth for any company aspiring to compete in the big leagues of “Big Media.” One can only admire the Spanish media entrepreneurs who have focused on building bridges to Latin America, rather than wasting time worrying about the consequences of an integrated Europe. Telefonica’s investments in South America, for example, tell us that the company has been very serious about reaching the natural customer base of the wider Spanish-speaking world, and about branching into a second major group, English, through the merger of Terra Networks and Lycos.
The role of language in the media business is so fundamental that it is simply taken for granted. Yet language may be the most powerful force uniting communities – perhaps even more powerful than religion. While the unifying strength of language has always existed, its emergence as the critical feature of any mass group of consumers is relatively new.
Historically, geography dominated the dissemination of all classes of products. No other factor, as argued so brilliantly by Jared Diamond in his recent book, Guns, Germs, and Steel, has contributed so forcefully over the course of human history to, as Diamond puts it, “the fates of human societies.”
But recently geography has lost its sway. A thousand years ago, geography bound together groups as diverse as the Swedes, Franks, Italians, and Persians, by virtue of the river systems of Central and Northeastern Europe and the relative navigability of the Mediterranean Sea, in that case.
The proliferation of networks in society, starting with the marriage of ocean-going ships and monied patron states, combined with new technologies like the printing press, and then faster, steam powered ships, and then railways, and then telegraphy, and so on, have continually transformed the world and liberalized the free flow of information across the globe.
In the twentieth century, new networks, not of water or rails, but of wires and transmitters, have accelerated these flows, and have unhinged them from geography. And the network kowtows only to the relative size of the wallet at the other end of the phone line. And of course, to whether the person at the other end understands what you are talking about.
Thus in a networked society language becomes the over-riding common denominator, trumping both proximity and politics. Moreover, the same network has a profound impact on language itself, an impact that compounds the trend of which I’ve been speaking. In his 1999 book, A History of Language, Steven Roger Fisher writes that: “After the Second World War, television intruded far more dramatically: increased dialect leveling, contamination and superimposition have since been documented among large populations of viewers. At this moment, television is perhaps the single greatest cause of universal dialect leveling.”
Fisher argues that the dominance of Hollywood television programming in [English Language] international television markets is producing a hybrid British-American idiom, replacing International Standard English at a rapid clip. The increasing reach of mass media is accelerating dialect leveling. In my view, this phenomenon will occur increasingly within the four major language markets, compounding the inevitability of my argument. It follows that what television has accelerated within the last thirty years, the advent of mass connectivity around the world, media driven and otherwise, will further accelerate over the next thirty or more.
It is true that English has been the predominant language of the internet so far, and it is true that it will always be a major force. But as connectivity penetrates deeper into the massive markets outside Europe and the US, on a relative, or percentage basis, English will decline in use through this medium.
Perhaps you remember the prediction, confidently made by so many just a few years ago, that English would become, by default, the language of the internet and therefore the entire digital world? It is safe to assume that things will not work out that way. The rise of connected media, and all the cultural products that can be swept through it, have actually given strength to the dominant non-English languages, connecting consumers to media, to marketers, and to each other both within and across national borders.
Today half the people using the internet are American. But according to a study by the International Data Corporation in San Francisco, that figure will drop to one-third by 2004. Other research indicates a more drastic decline. Some media firms, like Yahoo are reacting swiftly, investing heavily in local content and local language to customize their sites to new audiences, and with apparently great success.
But more than half of U.S. websites are doing nothing to internationalize their offerings. While English is pervasive on the Internet today, native speakers of Mandarin, for example, will be online in vast numbers in a very short period. Furthermore, while English as a second language is used on the internet by many international media consumers, as usage numbers spread, even this current pattern will be increasingly muted.
Goldman Sachs estimated in 1999 that there would be 96.6 million internet users in China by 2002, representing market penetration of roughly 7%. To put that in perspective, in the US, there will be at the same time 120 million users, representing 50% penetration. And by the way, in 2000 the Chinese actuals are already outstripping the forecasted growth by some 25%. In India, the same research shows over 70 million in the same year.
And these are only users within these nations – we are not counting the millions of native speakers of these languages around the world. And so, it is not at all surprising to learn that there are now some 500 Chinese-language websites offering advice on traditional herbal medicine and selling products.
When they finally discover this truth, many European and American media companies are going to see the limitations of some of the old linguistic powers. There are large audiences for cultural products in French, in Russian, and in German, just as there have been for several centuries.
But those audiences are not large enough to sustain a truly global business in their own right. That’s not to say that there cannot be exciting, interesting, and profitable media ventures that are focused in Finland, in Turkey, or in Brazil and Portugal. Stream, for example, in Italy, is a business for which we have high hopes. It operates in one of the most exciting and attractive media marketplaces in the world.
Yet will Stream itself be a global business? No. It may be a component of a global business, but it will always remain a regional media enterprise. Similarly, Germany has a superb export infrastructure for distributing and marketing German television and other cultural products abroad.
But there is a natural ceiling here. The notion of a Pan European media business, as opposed to a conglomerate, makes little sense. The model that most companies emphasize is worldwide reach.
And so, CNN and BBC World pride themselves on the number of foreign markets they are able to penetrate or the number of far-flung correspondents. What we discovered at STAR TV was that, in television, audience appetite clearly favoured local content. When we bought the business, Richard Li had built a primarily English language, analogue, five-channel, free to air distributor in the heart of Asia. Entirely an anathema to the broad diversity of the Asian so-called “marketplace.”
It is simply extraordinary to me how readily people refer to Asia as a single place. But the uniqueness of Asian markets is that the big ones, Greater China and India, are ground zero for global audiences, much like Spain is, for example. And each of these audiences want, unsurprisingly, local content, in their own language, reflective of their own culture, by them, for them, and of themselves.
Today, Star broadcasts in seven different languages to more than 53 countries. The business is primarily a pay business. And the audience numbers are growing. Yesterday, over 60 million people watched a STAR program.
Some Anglo-American media companies have started to enter foreign markets, with varied success. HBO, an AOL/Time Warner company, had early difficulties. Just last Thursday, in the Wall Street Journal, Michael Flagg wrote, correctly, that HBO has severely underestimated the challenges of broadcasting foreign films into a multitude of Asian countries. After eight years, HBO has reached only six million subscribers, forcing a rethink of their strategy, which is apparently beginning to garner results. Others learned the value of local content earlier.
Six years ago when the Discovery Network launched their business in Latin America, 100 percent of their programming was imported. Today, 10-15 percent is original regional programming and another 15-20 percent has customized material for the region. We have seen this over and over again in India. The largest, most productive film industry in the world is not, let’s remember, in California. It is India’s Bollywood, producing over 700 films per year, serving both India and the great Indian Diaspora, spread across Sri Lanka, Mauritius, the United Kingdom, the United States, South Africa, and many more countries.
There the population prefers listening to Daler Mehendi than Sting. And on any week night, the typical Indian family probably has his TV turned to Kaun Banega Crorepati. The locally produced, Hindi version of a great British product, Who Wants to Be A Millionaire, is setting India alight. Star Plus, since it’s transformation to an all-Hindi format, has vaulted past rivals Zee Telefilms and SonyTV. The fact that their signals are free to air and ours is pay hasn’t deterred anyone. In Mumbai last week, from 9PM to 10PM, 80% of the viewing market was tuned to Kaun Banega Crorepati.
Never mind that the idea of Who Wants to Be A Millionaire originated in Britain. Never mind that the American version is wildly popular and could easily have been exported in English. To the Indian audience, this is a purely local product. The host, Amitabh Bachchan, is known throughout India from his appearances in dozens of Bollywood films. “The Big B,” as he is known, is an icon and many people tell us that they wish to be on the program simply to be with him.
This show illustrates the remarkable paradox of the information age. At the very moment that information and culture is no longer restricted by geography, the demand for local content has never been greater.
The mistake so many have made in these markets was thinking that a single satellite dish or web server would be enough to reach the audiences of Asia and Latin America. The truth turns out to be different, and this is forcing all of us to reconfigure our definition of global media.
There are notable exceptions, of course. Titanic managed to woo audiences of teenage girls and millions of others in just about every country in the world. But the business problem presented by the power of language and the appetite for local content remains the same.
Twentieth Century Fox has an unparalleled distribution system for its films. But, at the end of the day, it is still selling a single cultural product. In translation, it can enter many markets. But that is not the same as creating media specifically designed for the largest emerging audiences.
That is why we should avoid thinking that the global media powerhouses of today can survive as monoliths: single, monumental production centers broadcasting to the world outside. Rather, each must be a series of local businesses, each carefully focused on the key language groups and local cultures that make up their respective audiences. But it is not just independent commercial media that is affected by the demands that globalism places on the market. An interesting lens set to observe this reality through, is that of public service broadcasters, such as the ABC in Australia, or the BBC right here in Great Britain.
On Friday, Greg Dyke so eloquently summed up his BBC’s core values, saying that the Corporation’s primary purpose “is to make and commission great British programmes:” a simple, and probably sensible, mission for the BBC. But while a foolish consistency might be the hobgoblin of little minds, how does this vision gel with Mr. Dyke’s characterization of the BBC as “increasingly Britain’s leading global media player?”
While BBC-backed British programming, exported worldwide, is a credit to the artistry of the British production community, this does not make the BBC Dyke’s “global media player” — as he supposes.
Indeed, no one working in media outside of Britain regards the BBC as a competitor. However, balancing the requirements of a public service mission with the contemporary realities of the global media marketplace is a challenge that is only necessary to overcome if one believes, a priori, that commercial competition is within the scope of a public broadcaster’s responsibilities.
That aside, the evolution of the international media marketplace, as I have tried to describe it tonight, would leave us wondering not only how, but even why, the BBC, a forced subscription service, would try to compete in markets not populated by it’s fee paying constituency. While it is difficult to make sense of a public service broadcaster’s ambitions in the globe media market, it is true globalism that will underpin the necessary growth of tomorrow’s media pacesetters.
To sum up briefly: While media firms do and will continue to thrive in their various home markets, if they aspire to compete in the global marketplace, as many say they do, they must focus real resources on the four largest language groups of the world. Prioritizing development within the Mandarin, English, Hindi, and Spanish language markets, will be key to continued, sustainable growth, well into the foreseeable future.
These four audiences, each boasting genuinely global distribution, are and will continue to be utterly dominant in terms of total market size. Furthermore, the current and future consolidation of media and communications services, primarily resulting in a reasonably unified global telemedia infrastructure, connecting people to ideas as well as each other, constitutes a powerful proximate enabler and accelerator of further growth in these four markets’ dominance.
So the way that the media industry deals with this reality has a profound impact both on the fortunes of the companies and individuals within that group, and also on the hearts, minds, and indeed wallets of the multitudes worldwide who make up the consumer side of the media marketplace equation. And this applies to all types of media: old, new, print, electronic, narrowband, broadband — you name it.
This is a more complex and fundamental challenge to the current and future giants of global media, than, for example, articulating a convoluted and usually incoherent strategy for the “Digital Age.” What it means is that real operating growth in multiple markets simultaneously will become increasingly critical to success.
We are past the debate about the “Digital Age.” Everything is media. All media is digital. Now the issue is: “how far can you take it?