Private Investor: Life at the top and the bottom of the money food chain

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The Independent Online

I suppose those of us who find ourselves at the bottom of the investment food chain should know our place. At the top, we all realise, I hope, are the big institutional shareholders, the brokers and the analysts that the companies seek to please.

I suppose those of us who find ourselves at the bottom of the investment food chain should know our place. At the top, we all realise, I hope, are the big institutional shareholders, the brokers and the analysts that the companies seek to please. Then, and only then, do we come to the little folk, the private investors. In the case of BSkyB, the food chain is more complicated and more elongated, given the plurality of shares held by the Murdoch family, a stake plenty big enough to allow Rupert's young son James to be appointed its boss.

That, as you might recall, was a rather controversial affair. It must have been, because it propelled into the public spotlight for the first time in years one Lord St John Stevas, the former Norman St John Stevas known to generations of Private Eye readers simply as "Stevarse". Few under the age of 40 will have much memory of him and I have now forgotten what exactly was his role in the great James Murdoch hoo-ha.

I was puzzled indeed to learn (in this very newspaper's Media Weekly section) that one not-so-small private shareholder in BSkyB, the well-known former Murdochman Andrew Neil, claims he was prevented from attending last year's BSkyB annual general meeting as a shareholder - even though he launched Sky and holds 50,000 shares in the company. He was allowed in only as a journalist who could neither vote nor speak at the meeting.

I thought such practices were confined to Ukraine or Zimbabwe. And I thought I was at the bottom of the pile. If he likes, Mr Neil can appoint me as his proxy for the next AGM and I will carry out his wishes - asking the right questions, voting the correct way - completely free of charge. I am sorry it has come to this.

For now, though, we must view the bigger picture, being the future of the whole Sky thing. And it was the ladies and gentleman of Credit Suisse First Boston who we have to thank for some encouraging insights into the prospects for BSkyB.

Don't worry about average subscriber revenues and "buying" new customers at enormous cost, is the message they are transmitting. The BSkyB management team have assured us that the company is going to have an excellent Christmas after all, beating the market forecasters' sometimes gloomy predictions with costs kept nicely under control. Not only that, I notice that BSkyB is right up there with developments on Hi Definition TV and has just pinched the rights to broadcast the Oscars from under the noses of the terrestrial broadcasters. A typical Murdoch move, that.

So it would seem the moaning about BSkyB was exaggerated. Even with the growth in Freeview, a cost-free digital terrestrial alternative, it would seem the appetite of the British public for television good and bad is insatiable. They will even pay for it. I have a friend with a satellite dish and he is able to watch the news in Arabic, although he cannot make out a word that is spoken. And we wonder how Sky can make money? I should have bought some more when they were out of fashion. At least I am pleased I didn't panic and sell then, so I am holding my own financially as the Murdoch family circus moves on.

Which brings me to another troubled business model: the budget airlines. Just as the public seem irrationally happy to spend - waste - hundreds of pounds a year on programmes and channels they cannot comprehend, let alone enjoy, so they seem pathologically unwilling to spend more than £10 on an air ticket. Such has been the terrible power of the no-frill airlines propaganda. Maybe easyJet will benefit from the carnage it has unleashed, but I suspect it will be some time coming.

s.o'grady@independent.co.uk

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