Bunny bugged: Murdoch pulls the plug on Britain's latest TV channel
Feud with rival mogul highlights the dangers of concentrating power in the hands of one man, writes Mathew Horsman
Friday 01 November 1996
Rupert Murdoch's fight with Ted Turner, the founder of CNN, and Time Warner, the entertainment juggernaut, shifted dramatically to Britain last night, when Mr Murdoch's satellite broadcaster BSkyB indefinitely postponed the UK launch of the Warner Channel, originally scheduled for today.
The increasingly bitter and highly personal battle pits Mr Murdoch - conservative, crass, authoritarian and utterly ruthless - against Turner, a Democrat, husband of Hanoi Jane Fonda, and a man troubled by mood swings and bouts of depression. Their war of words has dominated media news in New York for weeks, and has widened to include the city's mayor, New York State's attorney-general and Gerald Levin, the publicity-shy head of Time- Warner, the world's largest entertainment company, and the new owners of Turner Entertainment and CNN.
At risk are crucial distribution agreements that would allow Mr Murdoch's all-news channel to be broadcast in New York City. But the issue has been all but buried under a barrage of lawsuits, insults and sharp tactics. And now the war has gone international, causing some to fear a massive escalation in hostilities between two global giants, in markets far from the epicentre of Manhattan.
The move against the Warner Channel, which infuriated local programming staff in London, means the UK's 4 million satellite and cable TV viewers won't see the channel's vintage movies and TV series, Bugs Bunny cartoons, a Steven Spielberg-produced kids' show called Animaniacs and a Warner TV hit called Pinky and the Brain - all of which Warner had hoped would prove wildly popular in Britain.
The use of Mr Murdoch's 40 per cent-owned BSkyB as a foot-soldier in that war is sure to heighten concerns in the UK over his near-monopoly dominance of the pay-TV market.
BSkyB's control of the satellite market is so complete that broadcasters have no choice but to do distribution deals with the Murdoch-controlled company. Sky alone operates a subscription management system, based on so-called "smart cards," that allows satellite channels to be broadcast only to those households that have paid subscription.
Mr Murdoch's stranglehold on pay-TV has recently been the subject of press comment, including in The Independent, in anticipation of the launch of digital satellite television next year. There are growing concerns that his dominance will emerge intact into the digital age, thereby securing him a "gatekeeper role" over British pay-TV's development.
The mixing of Mr Murdoch's US agenda with the commercial activities of BSkyB will be seen by many in the British television industry as further proof of his powerful market position.
A leading media analyst said: "If I were a shareholder in BSkyB, I'd be asking whether the best interests of the company were being considered, rather than the best interests of one owner."
Executives at BSkyB and at the Warner Channel in the UK declined to comment on the decision. In a statement, the companies said: "The 1 November launch of WBTV-The Warner Channel on BSkyB has been delayed. Preparations continue for a launch at a later date."
Warner was meant to be one of several new channels being introduced this autumn on BSkyB's multi-channel satellite package. The US company has placed billboards around the country promoting the 1 November date. But in recent adverts run by BSkyB, extolling its new services, and in listings guides for satellite and cable channels, there has been no mention of Warner.
It was widely suggested last night that a resolution of Mr Murdoch's wrangles in the US would smooth the way for the Warner Channel launch.
Mr Turner's CNN, which is now part of Time Warner, has 70 million subscribers, while Fox News has just 17 million. Under the terms of the Time Warner/CNN merger, the combined group was required to accept a competing news service on its cable network. It chose Microsoft/NBC over Fox, despite what Mr Murdoch believes were iron-clad guarantees from Time Warner.
Mr Murdoch has already launched a suit against the company, and has enlisted the help not only of the Republican mayor of New York, Rudolph Giuliani, but even the Attorney-General's Office and, of course, his New York City newspaper, the Post. (Interesting, Mr Giuilani's wife, Donna, works for Mr Murdoch's New York flagship television station Fox Five.)
The City of New York obligingly sided with Mr Murdoch, who employs 1,400 at Fox News headquarters in the city. The municipal government even announced it would allow Fox News to run on one of the city's public access channels, which are provided by Time Warner under the terms of its licence.
Time Warner quickly won an injunction against the move, and promptly filed its own suit. In it, the City is accused of acting "essentially as Rupert Murdoch's latest political puppet".
The Post, Mr Murdoch's flagship US newspaper, has been running a steady stream of anti-Time Warner material, and has been vitriolic on the subject of Ted Turner, who last month likened Mr Murdoch to Hitler because he uses his newspapers to promote his own political and commercial agenda.
Mr Murdoch's Fox and Time Warner have each taken out full-page advertisements in the New York press, arguing their corners. Mr Murdoch even hired a plane to circle Yankee Stadium with an anti-Time Warner message. The dispute flared just as the New York Yankees were battling for the World Series against the Atlanta Braves, owned, of course, by none other than Ted Turner.
The use of his newspapers to promote his businesses will remind many of the way the Sun and the Times, particularly, have helped publicise Mr Murdoch's growing satellite TV businesses. More worryingly, many in the industry believe Mr Murdoch's control of more than 30 per cent of the national newspaper market has been the chief reason politicians from both leading parties have been unwilling to challenge the media baron on his pay-TV monopoly.
The indefinite delay of the Warner Channel came on the same day as the Independent Television Commission's invitation to apply for up to four "multiplex" licences for digital terrestrial television. Many now believe that Mr Murdoch's digital satellite plans will pre-empt efforts to get DTT off the ground.
The Warner Channel delay, while minor, could be a harbinger of things to come. Will broadcasters be able to win access to Mr Murdoch's huge distribution system on fair and open terms? Or will they be hostage to the needs of a huge and growing global media empire, run by a single-minded, at times impetuous man, used to getting his own way?
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