Comment: Murdoch gives a lesson in making TV pay

'He is living proof that the winning strategy is not necessarily to make a choice between content and distribution'
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Rupert Murdoch may be due one of his periodic brushes with disaster (on past form, once every seven or so years) but there are certainly no signs yet of his slowing down. A day after his $1.1bn bid for the MGM studio in Hollywood was beaten by the intervention of billionaire financier Kirk Kerkorian, Mr Murdoch calmly offered $2.5bn worth of News Corp stock to deepen his commitment to US broadcast television, snapping up 10 television stations owned by New World.

Given how well he is doing out of TV in the UK, there are probably some worthwhile lessons in the Dirty Digger's latest manoeuvres across the Atlantic.

The first thing to realise, as Mr Murdoch has long known, is that there is plenty of money still to be made in boring old analogue television. Despite the huge inroads made by satellite and cable in the US, the major networks still represent more than half of all viewing in American homes.

But there is a more subtle lesson. Mr Murdoch is living proof that the winning strategy is not necessarily to make a choice between content and distribution. If done right, controlling both the content (movies and TV programming) and the means of distribution (terrestrial, satellite, cable) can be highly lucrative. In the case of Mr Murdoch's Fox network in the US, he will now be in the position to showcase his programmes across the country, in most of the major markets, thereby increasing the chances of generating a hit. A hit on terrestrial means syndication profits down the road, through the secondary markets of cable and satellite.With tighter control over his terrestrial distribution network, chances are that other hits will come along.

And to crown it all, Mr Murdoch, who has reached a ground-breaking alliance with Bavarian media mogul Leo Kirch, has found himself another highly talented partner, in the form of Ron Perelman, controlling shareholder of New World. In this company, and with television prospects looking rosy, why on earth does Mr Murdoch keep all those tired newspapers he owns?

Weinberg unlikely to cut much ice

A week which has seen small investors lose their shirts on British Energy is not the obvious time to publish a report examining how private share ownership might best be encouraged. As it happens the timing of the Weinberg Committee's report on this subject is probably academic since its 17 members have laboured long - though not that hard - to produce a gnat.

To give the report its due, the explanation of how and why private investors have grown phenomenally in number while private share ownership has shrunk equally phenomenally by value is comprehensive, as is its analysis of the deterrents to deeper share ownership.

But the ragbag of special pleading, apple pie and motherhood that make up its recommendations are unlikely to cut much ice. Its most tangible proposal - that tax breaks which currently apply to PEPs be extended to direct share ownership - is spurious since it simply widens rather than removes a distortion in the tax system.

The idea, meanwhile, that courses in personal financial awareness should be included in the national curriculum comes from the same school that believes advertising should be allowed in classrooms. The real disincentive to private share ownership, as the report acknowledges in passing, is the perception that the market is run for those in the know. This is more than a perception, it is a reality. Small investors experience it every time there is a share buy-back, tax-efficient special dividend or derivatives deal.

Getting to grips with the enormous privileges and advantages the professionals enjoy might change that reality. But such remedies could hardly have been expected from a committee that was appointed by those self same professionals, in the shape of the London Stock Exchange.

Eddie George's timing may be right this time

There is an old saying that if you have to forecast a market movement, give the timing or the direction but never both. Eddie George certainly got his timing wrong last year when he wanted to raise interest rates to head off inflationary risks, and Kenneth Clarke was quite right to insist on overruling the Governor's excessive caution.

The minutes of the last Ken and Eddie Show when the Chancellor chose to ignore the Governor's advice and cut rates, confirm that Mr Clarke still believes he is on a winning streak. The massed ranks of the Tory back benches certainly hope so.

With difficulties piling up on the tax cutting front because of poor public borrowing forecasts, interest rate cuts will be a welcome tonic at the hustings. Realpolitik dictates that they will probably be shaved further.

But over at the Bank of England, a year after getting it so completely wrong, Mr George is singing again from the same puritanical hymn book: this time the message is don't cut rates because the gains outweigh the longer term inflation risks. Mr George may, however, be about to get his timing right in his argument with the Chancellor, if only - the cynical might say - because he has been singing a similar song for so long.

Last month was the first time he has disagreed with a cut. He is also talking more bluntly about the inflationary risks two years out. There will be a need at some point to reverse the falling trend in rates, he says.

Manufacturing is weaker than it should be, many small businesses are finding it hard to grow, and earnings growth showed a surprise fall last month. But consumer spending is showing every sign of taking off and the housing market is bouncing, a recovery that is bad rather than good news.

The benefit of the doubt in this finely balanced argument between the pessimists and the optimists on rates should at last be given to Mr George - though given the election pressures on Mr Clarke, he will be ignored at least once more.

And the award for the most repugnant public relations stunt of the year goes to Scottish Life International, which stuffed 79 live pigeons into cardboard boxes, left them without food or water overnight, and yesterday sent them to personal finance journalists. No doubt Scottish Life calculated that this little wheeze would attract publicity for the obscure financial product is was promoting. But it probably did not figure on attracting the attention of the RSPCA, which is considering whether there are grounds to prosecute. At the very least heads should roll in its PR agency and marketing department and perhaps at more senior levels. A more satisfactory punishment, however, would be financial retribution. It may be unrealistic to expect Scottish Life's existing policyholders to move elsewhere since by surrendering policies they would only be penalising themselves. But prospective customers should vote with their feet, which was not an option open to Scottish Life's pigeons.

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