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Sunday, July 24, 2011

Love affair with America

Rupert Murdoch’s love affair with the United States is fascinating and fairly educative to any entrepreneur even today.

He started going to the States very regularly in the mid 50s. His biographers all agree that at this point in time he did not even dream of ever owning any media property there let alone becoming a citizen in order to do so. His main interest in the US was to get ideas. Whenever he got back to Australia his luggage would be packed with magazines and newspapers that he had collected to mine ideas out of.

Admittedly there was a lot happening in the US in the 50s. The emerging super power by 1959 was seeing the average American family spending 6 hours daily, 7 days a week watching TV. Australia was of course several years behind and so it was easy for Murdoch to pick up ideas and simply re-create them back home. If anything his greatest gift has always been his brilliant flair for spotting trends in popular culture.

Back home in Australia Murdoch’s involvement in Adelaide’s first TV station to go on air, Channel 7 meant that he collected a lot of programming and also got ideas for TV back home. For instance he copied the TV Guide in the United States and created a replica in Australia.

At this point ideas for newspapers would have been limited. Newspapers in the United States are very different from anywhere else in the world in that they rely very heavily on advertising and therefore tend to have many more pages and one often has to look for the editorial amongst the tons of advertising and advertorials.

There is an interesting aside here from the Kenyan media scene where after years of building a name and revenues based on circulation, a very deliberate decision was made in the late 80s to transform the business model at Kenya’s highest circulating newspaper, the Daily Nation to rely much more heavily on advertising. Rates were jacked up and state-of-the-art colour presses that could reproduce colour advertisements quickly and cheaply were installed. There are those who argue that this was a mistake because the newspaper lost a huge opportunity to grow its’ circulation and collect enormous revenues from the rapidly growing Kenyan population over the years. If you look at the circulation of this newspaper it has actually slightly dropped over the years. And this has nothing to do with competition and even less to do with the advent of technology. Neither can really be blamed for the lost opportunity.

Other observers acknowledge that this was the smartest move to make at the time because the country was going into a lot of political uncertainty and continuing to rely so heavily on circulation would have been a mistake and the kind of risk that share holders would have cringed at were they given the facts.

This is an interesting debate because Rupert Murdoch’s empire was built mainly from the huge circulation. His most successful newspapers as we have already seen were hardly the kind that any serious business would want to do an advertising campaign in. Especially what he managed to achieve in the United Kingdom from The Sun and News of the World. We shall take a detailed examination and analysis at his acquisition of those properties and how they operated later in this series, but for now looking at Murdoch’s balance sheet at the end of 1983 clearly gives us the answer to any argument one wants to have on circulation versus advertising revenues.

The biggest cash cow in the entire Murdoch empire that year (as in all other years) was The Sun which earned a staggering $50 million in 1983 and 40% of News Corporations’ (Murdoch’s umbrella company for all his media properties) total operating worldwide profits. 70% of The Sun’s revenues were from circulation and NOT advertising.

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8 comments:

Anonymous said...

Chris, I wish to really really request you to do an expose of this minister. The fellow has been struck off the roll of advocates 3 times because of misappropriating clients money an euphemism for stealing.
He has been accused of giving work permits like sweets to foreigners and selling Kenyan passports and IDS to somali's and other foreigners.
He is the minister for immigration. A close confidant of the PM. Currently, he has designed a scandal that will make anglo leasing look like child play with the production of new generation cards and passports.
I wonder how Kajwang has escaped Chris investigation all these years. It would help your leaders if you can tell us details of the clients whose court awards he stole. Tell us of other malpractises that this crook has been engaged in.
Then tell us what makes him so special to Raila that he would overlook his dark past to award him one of the most sensitive dockets.

Anonymous said...

Kajwang for PRESIDENT!!

Anonymous said...

"I wonder how Kajwang has escaped Chris investigation all these years."

I agree whole heartedly. Instead of wasting our time with some australian/british/american media mogul's misadventures, much more useful to focus on Kajwang--a highly corrupt and influential politician whose activities directly impact Kenyans.

Anyway, these posts on murdoch are really diversionary. I suspect there's something about to get busted that Chris wants to keep low.

Anonymous said...

That's what happens when you give these jaluos so much powers. They will bankcrupt the country, they will sell the country to the foreigners, Kenya will be no better than DRC or Somalia....etc. These people (Jaruos) are the typical classic example of a black man's deep seated issues. A black man is considered by other races as a retard and a failure (too much promise and noise but not amounting to anything). And these people fit that description perfectly!

Anonymous said...

Fellow Kumekuchans,
Brace yourselves for the worst, for what i'm about to tell you is so frightening that you may just collapse from fear of hearing my next words; here we go: -

Anon 4:28AM/6:16AM/9:18AM are one and the same person namely fake Oracle aka Kumekucha mistress aka fake Mwarang'ethe aka Phil/Taabu/Chris mistress

The harsh economic times facing Kenyans has led to an increase in a number of mental handicaps, including multiple dissociative disorder which is basically a mental disease where one person is diagnosed as being several different personalities.

The best thing you can do is be patient with the fellow until next year 2012 when Kenya will have a new president and they will be out of a job blogging in KK

our prayers are with them and their wife(s)

Anonymous said...

Chris,
hongera, umetenda mambo makubwa na hizi weekend specials zako!asante mkubwa

Anonymous said...

Hon. D.T. (disability theorist), PhD, you must be kidding aren't you!

Mmmmmm! Mental handicap and mental dissociative disorder is brought about by "harsh economic times"?

How does a well respected, well published and highly certified mental health professional like you arrive at a such an ambiguous conclusion?

If I may ask, was your diagnosis based on the patients' self-reported experiences, behaviour reported by relatives or friends or "fellow Kumekuchans", and above all, a mental status examination adminstered by you?

And are you sure that economic status is the determinant or rather the inevitable outcome of your stipulated disability theory?
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By the way, how will a new president bring about the much needed development in what was formerly known as your "province, district, division, location, sub-location, village" and homestead?

After four decades of squandered opportunities and wasteful spending by the locals, native sons, daughters and what have you.
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I hate to remind you that the onus of any development in your village or among your progressive people is on the locals and not on outsiders.

The decades of blaming the previous governments and current one are long gone, because you are the ones who are now incharge of the grasstoots development of your respective regions.

The buck stops with the local people and their respective leaders. Fullstop. Period.
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Guess what! Many people can't wait for the N.C.D.C. - Nationwide County Development Competition - to begin after 2012, so that the counties can be evaluated and graded accordingly.

Anonymous said...

Talking of smart management when traviling abroad or through continental Africa, what comes to mind?

Rupert Murdoch's ...luggage would be packed with magazines and newspapers that he had collected to mine ideas out of.

Well, how many times have we, yes so many of us, gone through some of the busiests international airports around the world without taking mental notes?

Do we ever pay any much attention to other travelers from (and to) other different continents around world?

Are some of us ever really observant when going through familiar airports, other foreign airports and cities?

Whether our reason for travel is business, pleasure (or leisure as I love to respond to many official gatekeepers), unplanded tours, weddings, or worse of all, forced return home for whatever reasons, the dreaded bereavement trips, et al.

Anyway, the next time around, try paying some attention to the amount of luggage and extra buggage in the company of travellers heading to continental Africa.

Then take some time out and do the same with regard to the amount and size of carry on luggage in the possession of travellers flying back to various destinations such as industrial powerhouses like Hong Kong, mainland China, Malaysia, South Korea, et al

With the obvious exception of travelers to the Philippines and to some extent Indians, the two groups of frequent or occasional travelers (working immigrants) who are no diffrent from so many of us when it comes to hauling unnecessary extra baggage.

One will notice the obvious smart management when it comes to the type and guantity of carry on luggage or checked in baggage heading in both directions and their respective owners.

The future Rupert Murdoch no longer collect magazines and newspapers but they have adjusted accordingly and travel very light.

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