Murdoch's biggest fan
PROFILE: MITCHELL BERMAN
Sunday 23 May 1999
Five years on, joining a Mountain View, California-based hi-tech firm called Open TV, Berman's appreciation for Murdoch deepened. Open TV had a contract with BSkyB to develop the software for the satellite broadcaster's digital television set-top devices.
Bearded, zany, southern Californian to the bone, Berman today waxes even more enthusiastic about Murdoch. But to understand why, you must first listen to him rant about Bill Gates.
"All the news in the British press seems to be about Micro-soft these days," he says. "Micro-soft and its move into cable television. Well, let me tell you about Microsoft and television. Two years ago Microsoft started Web TV. Web TV has been a disaster. Gates has spent $425m [pounds 264m] to get 770,000 subscribers. So now Microsoft has decided to buy its way into television. It wants to suck the blood out of the industry. Microsoft is Dracula."
Berman is not pure sound-bite. There's an analysis about the way the technologies underpinning the television, computer and telecommunications industries are converging, too. "The convergent technologies story has become horribly distorted," he says. "Everyone is focused on the internet. Everyone is focused on how Micro-soft, Intel, AT&T and BT are going to take over television. Silicon Valley has a big stake in pumping up this story. So does Wall Street - all that money invested in anything with dot com in it. But television is not about the internet. It's about entertainment. That's what Murdoch is good at."
But isn't he and the television world a fading force compared with computer and telecoms companies?
"Television, not the PC, is the killer ap," Berman insists. "Where's Microsoft with television? It's years away from doing much. Where are the phone companies? They don't care about video. They're using video as a Trojan Horse to sell what they do care about - voice and data. Where's BSkyB? It's up and running."
Self-interested though Ber-man's spiel may be, there is little doubt that the explosion of investor and media interest in the net has biased the convergent technologies story toward the computer and telecoms industries.
Berman is a television marketing man. He cannot stop the patter. But he cannot stop being iconoclastic, either. "Television is boring now," he says. "That's why fewer people are watching it and fewer people are talking about it."
But he thinks this is a lull for his industry, not the end. "Open TV and others are developing technologies to help television producers - the creative people, the content people - paint something entirely new on the screen," he says.
Born in West Los Angeles in 1954, Berman's grandfather was the foreman of the Warner's lot in the 1940s. He dreamed of becoming a screenwriter himself, but after watching Robert Kennedy's assassination on television in 1968, he dedicated his life to public service. Graduating from UCLA with a master's in public administration in 1977, he went to work for Jimmy Carter, then Teddy Kennedy.
Four years into the Reagan years, however, his wife told him his idealism would leave him crazy or dead, and he got a job as an account executive for Time Warner's Home Box Office pay-TV station. "One day I was working with pregnant teenage mothers. The next I was on the 42nd floor of Century Towers," he says. "It was an adjustment."
He then went to work for a pay-TV start-up in Auckland, New Zealand, called Sky TV (unrelated to BSkyB). Homesick, he and his family returned to LA in 1992 and he set up as a consultant for the cable industry. "This was when I thought, `Jeez, there's convergence happening here'," he says.
Berman specialised in data mining. Using something called GIS desktop software, which cross-tabulates census information, postal and telephone exchange information, and credit backgrounds, he helped cable clients target likely markets down to one side of a block. "You want Hispanics earning over a hundred thou in Houston? Boom, you got it. You want dentists on Wilshire Boulevard in the market for piped-in music, a hundred soothing tunes? Boom, yours, man."
Branching out, Berman noticed that a growing number of phone companies he had never heard of, including one selling something called high-speed internet access, were interested in his services. Then in 1995 he moved to Sydney to become strategic business development manager at East Coast Pay Television, Australia's first digital direct broadcast satellite subscription television service.
When he returned to the States in 1997, to take up the senior marketing post at Open TV, he says, "all the stuff about the internet was just getting going. I went to one industry event. Intel spent $2m to put together a presentation showing that the PC, not the TV, was the killer ap. There were images of Mom, Dad and the kids huddled around a computer. The television was in the trash."
The current, internet chapter of the convergent technologies story is only a phase, Berman predicts. "We used to talk about the proliferation of television channels reaching the home," he says. "Now we're talking about the proliferation of services - multi-channel TV, the internet, cheap telephony."
Nevertheless, Berman is not sanguine. His peripatetic career makes him acutely aware that while the excitement about the net may only be a phase, people, companies and entire industry sectors can get crushed in the meantime.
Open TV is the operable case in point. It could float or be bought out and make Berman's fortune. Alternatively, it could be driven out of business.
Formed in 1994 as a joint development and marketing alliance between Sun and Thomson Multimedia, Open TV shipped its first operating system for digital interactive television two years later. Since then Sun, the progenitor of Java software, competitor to Micro-soft's Windows, has remained a backer.
But a month after Berman's arrival in 1997 Thomson Multimedia - the consumer electronics unit of the French state-owned holding company Thomson SA - dropped out. In 1998 Alcatel, NEC and DirecTV each bought 7.5 per cent stakes in Thomson Media. So did a US computer heavy.
"Microsoft", Berman mutters darkly. In addition to taking strategic 29.9 per cent stakes in the UK cable television companies NTL and Telewest, and investing in the Dutch cable carrier UPC, Microsoft is working on the software for the set-top devices for Thomson TV in France.
Which brings Berman back to his position as president of the Murdoch fan club. Last month BSkyB announced it would give away the set-top box devices for BSkyB digital. Sitting at the Open TV booth at Mediacast, the digital television exhibition in Earls Court last week, he explained the give-away was not aimed at ONdigital, BSkyB's digital TV rival. The move was aimed at Microsoft. By getting his digital service up and running first, then attracting subscribers by giving away set-top boxes, Murdoch obtains pole position in the race to the digital age, Berman says.
Even after the race gets going in earnest, Murdoch has an ace in the hole. Microsoft, the rest of Silicon Valley and the telecoms companies are geared up to service the As and Bs in the global consumer market. With his feet firmly in the Hollywood entertainment industry, Murdoch is aiming for the masses.
"We want to help," Berman says. In the future, television will be as much about software as it is cameras.
"Open TV is David against the Microsoft Goliath working on this software."
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