Dial M for Murdoch

imageThe book Dial M For Murdoch by British politician Tom Watson and journalist Martin Hickman is a frightening read. It is frightening not only because it described a state of affairs where politicians, media and police colluded to hide criminal activity but because the crimes it describes have been almost completely forgotten and the criminals still act as if nothing has changed and they are still in charge.

As the authors say in the introduction, the book describes how a global news company exerted a poisonous and secretive influence on British public life and when exposed, it used its power to bully, intimidate and cover up with help from its allies at the highest levels of politics and the police. Yet the authors’ hope the scandal would force the perpetrators to clean up their act hasn’t eventuated. While the scandal ended with public inquiries, the humbling of Rupert Murdoch and the death of the News of the World (NotW), it hasn’t fundamentally changed the government or Murdoch’s behaviour nor has it chastened the rest of the tabloid pack in Britain who remain a mostly unaccountable right-wing rabble.

Tom Watson is a Labour Party MP who attracted the ire of Murdoch’s empire. His mistake was to plot against Murdoch favourite Tony Blair, an action that earned him the lasting enmity of Rupert’s powerful attack dog Rebekah Wade, who rose from a secretary to editor of the NotW in a decade. The Sun called him a “treacherous lump of lard” and a “mad dog trained to maul”. The NotW went further and raided his message bank as they did with many others.

It was the fierce level of competition Murdoch inspired that encouraged this behaviour, even pitting their own reporters against each other for the perfect tabloid scoop. The NotW had deep links into the police with Wade even admitting to a 2004 parliamentary inquiry they routinely bribed the force. But it was a successful model with the Murdoch tabloids making money and the NotW having a reputation as a muckraking award winning bastion of investigative journalism.

But its methods were vile. Some like chequebook journalism were well known, others like “blagging” confidential records or paying corrupt officials for private data were less well understood and there was no appetite to expose it by police forces anxious to have cordial relations with Fleet St. It took the involvement of the royal family to start the unravelling.

In 2005 Prince Charles’ staffers were alarmed when they saw very detailed gossip about his sons appear in NotW. They came to the conclusion the tabloid could only have got their information from phone hacking. They contacted Scotland Yard who began Operation Caryatid. The Royal revelations were appearing in NotW column Blackadder written by Royal editor Clive Goodman. Scotland Yard compared Goodman’s columns against the phone numbers they knew were being hacked and built a case against him. At the same time senior police officers were wining and dining with then NotW editor Andy Coulson.

Operation Caryatid made a breakthrough when O2 told them about a blagger wanting to change royal phone codes. He was private investigator Glenn Mulcaire, who Goodman kept on a weekly retainer to hack voicemails on an industrial scale – not just the royals. Yet police made the decision to restrict the case to “less sensitive” witnesses. In 2006 Goodman and Mulcaire were arrested with no effort made to widen the inquiry to other journalists despite circumstantial evidence. Instead police gave Wade a full briefing on what they found because she was mentioned in Mulcaire’s files. Unsurprisingly Wade did not wish to make a complaint against her employers. They didn’t tell the many victims named in Mulcaire’s files and neither did the phone companies (except O2) for many years.

In 2007 Goodman was jailed for four months and Mulcaire got six for illegal invasion of privacy. NotW editor Coulson had to stand down in the scandal but the paper hid behind the “bad apple” defence. Goodman was sacked but was furious as he believed he was just a scapegoat and threatened to appeal publicly. Mulcaire admitted in court hacking football union leader Gordon Taylor and now Taylor was threatening to sue. His lawyers had gained police evidence including a Mulcaire email “for Neville” believed to be for NotW journalist Neville Thurlbeck.

Yet Murdoch had bigger fish to fry setting his sights on Dow Jones Wall St Journal and British pay TV and throwing his support behind the Tories under sympathetic new leader David Cameron – and his new press secretary Andy Coulson, formerly of NotW. Taylor was paid off for almost half a million pounds, a record, on condition of silence.

In 2008. Guardian journalist Nick Davies became aware of the scale of the illegality at News through a police contact. He scoured NotW for stories that might have used intercepts as a source.  In 2009 he broke his story saying Murdoch had paid a million pounds to settle legal cases like Taylor’s that threatened to reveal evidence of criminality. He had found the For Neville email and quoted a police source saying thousands of phones were hacked. Labour was outraged saying Cameron should sack Coulson but police refused to reopen the case. Murdoch himself denied it, saying if they had paid out Taylor he would have known about it. The Times counterattacked rebutting the Guardian allegations and calling Davies dysfunctional. News lawyers admitted to Watson at a parliamentary inquiry James Murdoch had approved the Taylor payout.

But at the end of 2008 the Press Complaints Commission exonerated NotW saying no new evidence had emerged. The Guardian’s stories had not lived up to their “dramatic billing” the PCC decided. Scotland Yard urged the paper to drop its hostile coverage as “over-egged”. But the Guardian persisted and discovered Mulcaire had accessed the inbox of 100 customers of Orange, O2 and Vodaphone. They were supported by Watson’s parliamentary culture committee which accused News of hindering their inquiries. NotW accused Watson of shamefully hijacking the committee.

After the May 2010 election Cameron became PM and Coulson his press secretary despite Coalition partner LibDem reservations. Just as he did in the Blair years, Murdoch had a private audience in Downing St with a plan to take sole ownership of BSkyB. But the storm clouds were gathering. People who appeared in Mulcaire’s files like Sienna Miller and Steve Coogan began legal action though could not prove they were hacked. The Guardian shared their files with the New York Times which quoted a disgruntled News journalist saying Coulson knew of the hacking which spread well beyond one reporter. News claimed the Times was carrying out a vendetta because of its rivalry with their Wall St Journal. Coulson “emphatically” denied wrongdoing.

Watson raised the matter in parliament, especially on the news Scotland Yard had deliberately ended the investigation despite extensive evidence. Watson was warned by News they would target him if he didn’t back off but with media refusing to publish his allegations he put them on the blog Labour Uncut. When LibDem minister Vince Cable threatened to refer the News takeover of BSkyB he was undone by a sting from undercover Telegraph reporters and resigned. New Tory minister Jeremy Hunt was more compliant to Murdoch.

Four years after the arrest of Goodman, Met Police finally interviewed his boss Andy Coulson. They announced there was no new evidence but didnt reveal the key evidence they had all along. Miller took her case to court revealing News editor Ian Edmondson knew of the hacking and he was immediately suspended by his employers. Coulson resigned in January 2011 despite claiming he had been punished twice. The Met launched a new inquiry into hacking. A senior Met officer admitted to Watson they never looked at all the Mulcaire files. With evidence growing, the BBC finally started to take an interest. Yet Hunt continued to back the BSkyB bid despite growing reservations.

News set aside 20m quid for payouts to settle with a growing list of victims as they tried to pick off civil claimants before their day in court. The pressure was building on what Rebekah Brooks knew, despite her closeness to Murdoch. But the tables turned on July 4, 2011 when Davies revealed a new hacking victim: murdered school girl Milly Dowler. Davies overreached by claiming NotW deleted messages from her phone to make room for others, giving false hope to her parents she was alive. But the impact was devastating and News had to admit it was a “great concern”. Social media went berserk and even the PCC admitted it was misled. Advertisers threatened to leave NotW and News’ share price plummeted.

With news emerging of Murdoch papers’ corruption of police, the noose tightened. On July 7 NotW called an all staff meeting which read out a James Murdoch email admitting they had misled parliament. At the end was a bombshell: the paper would close down after that weekend. Coulson was arrested and it was open season on Murdoch in parliament. With BSkyB shares in freefall Murdoch finally got the message and withdrew his offer. A week later Wade resigned and Rupert and James were summoned to give evidence to the Culture Committee.

Murdoch’s memorable phrase was about his most humble day of his life but his evidence was accurately satirised by Private Eye as “we are sorry we have been caught”.  His feeble defence was they had only recently found out the problem and would only admit they had been “lax”. By then Wade had been arrested and the Met Police chief was forced to resign. Wade also fronted parliament but claimed she couldn’t remember authorising payments for hacking. Cameron claimed not to have discussed BSkyB with Murdoch, but Labour couldn’t press too hard. After all, they had been in bed with the Dirty Digger too in the Blair years.

At the end of that summer News announced profits of $982m mainly from television and Murdoch was awarded a $12.5m bonus. As they hived off their troublesome newspaper business, it was back to business as usual, the Murdochs holding on to power against rebellious shareholders thanks to their powerful voting shares. While the PM distanced himself, his education minister Michael Gove still had stars in his eyes. “Murdoch is a force of nature and a phenomenon,” he said. “I think he is a great man.” The Sun on Sunday would soon fill the NotW gap and while the Leveson Inquiry brought many embarrassing revelations, they were soon forgotten in the relentless 24 hour news cycle. It did not take long for Murdoch papers to resume their role as kingmakers. As Watson ruefully concluded, the empire stood shaken and ostensibly apologetic for a while,  but it is still there and Rupert Murdoch is still in charge. British – and Australian – media remain in his thrall.


Courier-Mail apology adds to its growing irrelevance

apologyThe Courier-Mail’s apology for an apology this morning highlights everything wrong with News Corp journalism in Australia.

The apology, printed over three small columns buried on page 7 comes a day after the Brisbane tabloid ran a racy page 1 image of murdered Indonesian woman Mayang Prasetyo. Prasetyo was posing provocatively in a bikini next to the screaming headline “Monster CHEF and the SHE MALE”. It was an appalling headline that should never have seen the light of day and passed through many gatekeepers before publication. It was a headline that said more about newspaper management than about the murder victim.

The headline and the picture had one purpose: to sell newspapers. Recent Audit Bureau of Circulation data have shown a modest recent increase in Courier-Mail sales, which the paper trumpeted. The longer-term picture is of consistent decline, shown up in the Year on Year figures from 2012 to 2013 which shows the paper down 10% from 185,000 papers a day to 162,000. These figures are similar to newspapers across the country. News suits in Brisbane and elsewhere are panicking and think they have to go downmarket to gain readership. Yesterday, the paper hit rock bottom managing simultaneously to offend women, Asians, gays, blacks, domestic violence victims, and possibly chefs, in its extraordinary heat seeking missile headline.

Tabloids have been offending minority groups forever, with the “other” always fair game for headline writers. People were always offended and some may have written to the paper to express their outrage. A handful of letters might even have been published in the name of faux-balance. But the papers felt they could get away with anything, because no one could stop them. These days the rules have changed. The digital disruption playing havoc with News Corp’s business model is also offering effective ways of expressing disapproval. The headline went viral for all the wrong reasons and social media and activist websites are fanning the flames calling for apologies. Realising finally they might have gone too far, the Courier-Mail thought they could douse things down with today’s apology and indeed there are some good things in it.

The apology’s first sentence should have been yesterday’s Page 1 lead’s first sentence. It read “Mayang Prasetyo was the innocent victim of a horrendous crime, killed by the man she should have been able to trust”. The sentence went to the core of the issue yesterday’s headline ignored: there is a domestic violence crisis in Australia of men attacking and often killing their partners. The apology said Mayang would be remembered for her cheerfulness and her love of family “as we reported yesterday” (hidden behind the hideous headline). It went on, “Many believe” (but presumably not Courier-Mail management) “we presented Mayang’s story in a way that was disrespectful to her memory. It concluded they “no intention of diminishing the value of Mayang’s life, or to add to the grief being felt by her family”.

Can they seriously believe “Monster chef and the she male” is a respectful headline? Didn’t anyone at the paper think their other headline “the butcher and the ladyboy” might diminish her life? Was anyone arguing these headlines would add to her family’s grief? The apology shows the Courier-Mail has learned nothing. The sooner it and its stablemate of toilet papers disappear, the better it will be for the health of our society.

Murdoch’s adventures in China

When Rupert Murdoch took control of The Wall Street Journal in 2008, he also collected a less prestigious Dow Jones monthly publication called The Far Eastern Economic Review. The New York Times called it an incidental addition to the global stable of Murdoch’s News Corp. Murdoch promised editorial independence to all the Dow Jones products as the price he had to pay for the Journal. However, it was no surprise to find a chilling effect whenever a story appeared that affected Murdoch.
The Review’s editor Hugo Restall hired Australian writer Eric Ellis to write a review of Bruce Dover’s book “Rupert’s Adventures in China: How Murdoch Lost a Fortune and Found a Wife.” The book is an insider’s account of Murdoch’s attempts to woo the Chinese Government in the 1990s and also discusses his relationship with third wife Wendi Deng. The book got a big reception in Asia in 2007 and Restall hired Ellis to review the book in January 2008. But by February, Restall got cold feet and told Ellis the book “looks more like the work of a disgruntled ex-employee rather than an analysis of the business.”
In his spiked review, Ellis said for a businessman who has left such a mark on the world’s media, Murdoch was under-analysed and his personal life off-limits. This why the book is of great service: Dover (now the chief executive of ABC’s Australia Network beaming content into Asia) was the Sun King’s chief courtier in the Forbidden City in a time when China meant everything to Murdoch.
Dover tells the story from the time Murdoch bought STAR TV in 1993 for $1 billion to the time 10 years later when Dover was sacked and Murdoch realised he could not replicate his success in China. The year 1993 after Murdoch had defeated the British print unions in Wapping, and was starting to make big money with BSkyB and the Premier League. He was also expanding his footprint in America and looking at Chinese opportunities. The 23-year-old Richard Li’s STAR TV was a satellite operation with a reach from the Philippines to the Middle East, potentially two-thirds of the world’s population.
Li never made money from STAR TV subscriptions as most users pirated the unencrypted service. He changed the model to advertising and charged big rates though no one was sure how much audience he was aggregating. Li’s father Li Ka-shung was Hong Kong’s wealthiest businessman and a friend of Deng Xiaoping. But Beijing was alarmed over the uncensored service being available in mainland China. Xiaoping told Ka-shung the business had to go and Li reluctantly sold to the highest bidder in 1993. Pearson PLC (owner of the Financial Times and Penguin Books) offered the same money as News Corp but wanted Ka-shung to stay on in some capacity. Murdoch had no such qualms.
Li never sought approval from Beijing on the sale. When the politburo found out who STAR TV’s new owner was, there was deep concern. The Chinese knew Murdoch intervened in the politics of every other country he had interests in and feared the same would happen to them. These fears intensified after a Murdoch speech Murdoch in London’s Whitehall Palace celebrating BSkyB’s new multi-channel offering. With the Internet still in infancy, Murdoch lauded the new forms of communications as a threat to “totalitarian regimes everywhere”. Orwell had got it wrong, Murdoch said, mass communication technologies did not subordinate individuals but liberated them. Telephony and satellite broadcasting, he enthused, made it possible to by-pass state control of information.
Murdoch claimed he was talking about the collapse of Communism in Eastern Europe. But infuriated politicians in Beijing knew he was talking about them. Premier Li Peng saw Murdoch’s speech as a threat to Chinese sovereignty. Within a month he banned the distribution, installation and use of satellite dishes in China, dashing STAR TV’s expansion plans.
Murdoch quickly realised the extent of his blunder. He moved to Hong Kong with wife Anna and started a long campaign of wooing the Chinese leadership. All contact with Zhongnanhai was funnelled through the State Council Information Office (SCIO) and Murdoch was allowed to meet no-one above the rank of vice minister. In 1994 he used limited transponder space on the satellite as an excuse to drop the BBC from STAR TV. He later admitted the real reason was because the Chinese leaders hated the BBC. However it changed nothing and Murdoch remained persona non grata with senior leaders.
Murdoch befriended family members of Deng Xiaoping. He got Harper Collins to publish Deng’s daughter Deng Rong’s hagiography of her father. He also feted disabled eldest son Deng Pufang in an artists’ tour of Australia. But when Deng lost power in 1994 his children were out of favour and with them patronage of Murdoch. New leader Jiang Zemin enforced the crackdown on China’s half a million satellite dishes.
Dover was in China to negotiate a joint venture with the People’s Daily. This alliance with the conservative communist organ was a peace plan tacitly approved by the politburo. The paper was under pressure to reduce reliance on state handouts and proposed a business news magazine with News Corp. But again SCIO were not across the deal and once they found out, did their utmost to ensure it would never get off the ground.
Murdoch next’s ploy was with businessman Liu Changle who bought a half share in the Phoenix TV joint venture with STAR TV. Liu cultivated key Beijing decision makers and senior leaders told Murdoch Liu was his only way into China. Phoenix proved popular and shook up the tawdry domestic TV market. But Murdoch hated Phoenix because Liu retained day-to-day control.
Murdoch looked to the new information superhighway for a solution. As Beijing wrestled with control of the internet, Murdoch started a new joint venture with People’s Daily called PDN Xinren. The first product ChinaByte was launched in January 1997 and became the most popular site in China. When the tech bubble burst Murdoch lost faith in the product and by April 2001 sold his toehold in the fastest growing internet market in the world.
Murdoch also got rid of anti-Chinese correspondent Jonathan Mirsky from the Times Hong Kong bureau. Murdoch promised The Times editorial independence but after he took editor Peter Stothard on a charm offensive of China, Southard spiked many stories from Hong Kong. Mirsky resigned citing Murdoch’s heavy hand. Murdoch also spiked the HarperCollins autobiography of former Hong Kong governor Chris Patten on Chinese instructions. Murdoch competed with great rival Time boss Jerry Levin to fawn over Chinese leaders. Finally Murdoch made a speech which was a mea culpa where he conceded cultural and social values of a country trumped open communications.
With relations warming, Dover tells the amusing story of when Murdoch met Vice Premier Zhu Rongii in Australia in 1997. Zhu asked Murdoch to tell him the story of his rise to power and the pair had an animated conversation.  At one point Zhu put his hands on Murdoch’s wrists, looked him in the eye and spoke in Mandarin. “I see when you needed to expand your business interests in the US you became a US citizen,” he said. “Maybe you should think of applying for Chinese citizenship to further your business interests in China”. Murdoch blinked when he heard the translation and spluttered a reply. Zhu burst into laughter and said he was joking.
Murdoch did apply for Chinese citizenship – by marrying his young Yale-educated interpreter Wendi Deng. Deng had the language skills but not the contacts in the politburo and the Chinese kept one step ahead of the Murdochs. As they cultivated Zemin’s Shanghai clique, the leader was replaced by Hu Jintao. Dover was on the outer now, his boss frustrated by his inability to penetrate the Great Wall. Hu closed down STAR TV’s intrusion into the Chinese “grey sector” and insisted China retain control of Chinese television, banning cooperation between local stations and foreign companies.
After 12 years, Murdoch finally admitted defeat in China. In 2006 he sold his remaining interest in Phoenix and repositioned STAR TV to the Indian market. Dover said Murdoch was a major catalyst of change in China both of its media and its attitude to the Internet (which the party wanted to ban entirely). Phoenix transformed Chinese television with its brash, downmarket programming but control remained in Chinese hands. Dover said in seeking to woo China’s leaders, Murdoch overstepped the mark. “He became too impetuous, too imprudent,” he concluded.

Fairfax sacks its editors

Fairfax sacked three senior members of its editorial team today. In Melbourne, Age editor Paul Ramadge “announced his intention to stand down” while at the Sydney Morning Herald publisher and editor-in-chief Peter Fray and editor, Amanda Wilson announced “they are leaving the company”. The trio were sacked a week after CEO Greg Hyland’s restructure. Frey said he said it was an exciting opportunity to see what he could achieve in the profession he loved but “he didn’t have another job to go to” while Ramadge spoke of “divided feelings”.

Their departure clears the way for Fairfax to move to a new management structure. In Hyland’s memo to all staff last Monday called “Fairfax of the Future”, he announced the three objectives of his cull of 1900 staff: Move to a digital-only platform, reduce costs and make profits. Hyland said his “Metro Media Business” (the Age and SMH) has grown 30% audience in the last five years. Online visitors now outnumber print by over three to one. But the business costs are predominately in the legacy space. To fix this, they will move to regional printing plants, charge for digital access from next month, reduce the size of their papers and sell a stake in NZ auction site Trade Me.

Hyland said they were committed to a multi-platform strategy. Fairfax Media will become a “digital news media and transactions” company with horizontal media convergence across four platforms: legacy (print/radio), online, mobiles and tablets, and IPTV. Audiences would be “monetised through the day” through subscriptions, advertising, digital transactions and events. There is no role for an editor-in-chief in this model. The Australian thinks there will be five geographical editors-in-chief in Sydney, Melbourne, Brisbane, Perth and Canberra — and a handful of “national news editors”. The Australian believes there will be 19 “topic” editors, replacing the rounds system. “Some topics will be national, such as federal politics, some local, such as crime, and some hybrid,” they said. “There will also be five ‘platform’ editors: one each for print, social media, tablet, mobile and computer.”

Meade and Jackson note the massive restructure in their own organisation News Ltd with job losses expected to exceed 1000. Its 19 divisions will be reduced to five publishing houses in a “one city one newsroom” strategy similar to Fairfax. News is closing two divisions: News Digital Media, founded in 2006, and News Corp’s internal wire service Newscore formed three years ago.

While Australia’s two biggest media companies haemorrhage staff, The Guardian is worried about losing a plurality of voices. It notes Gina Rinehart is circling Fairfax for a board seat and editorial influence. The Guardian’s comment she would “hamper Australia’s once-vibrant journalistic culture” is a bit Pollyanna-ish about the country’s journalistic culture. Right-winger Gerard Henderson calls the Age Guardian-on-the-Yarra but the Australian paper is not as good as its British counterpart.

Whether it will be a choice “between Murdoch and Murdoch on steroid,” as the Guardian claims, Fairfax were never independent of their owners regardless of their “Charter of Editorial Independence”. Even in Graham Perkin’s glory days, he was rapped over the knuckles for supporting Gough Whitlam in 1972 and had to backtrack in 1974 when the board vetoed his decision to support Labor. Rinehart’s refusal to sign it will have little bearing on the content the new entity provides.

The threat is not political interference but business. The new arrangements will further hasten the collapse of the walls between editorial and commercial departments. Terry Flew notes the big question for Fairfax is what online content to put out. Flew said their websites are “a confusing blancmange of investigative stories, fashion photos, sex tips, celebrity gossip, local news, opinion pieces, sports results, and updates on reality TV shows”. These sites challenge Fairfax’s claim to deliver quality journalism and most of it is readily available elsewhere. Flew said Fairfax has priorities for its online sites: “uncluttering its content pages and deciding what it won’t be reporting on, and identifying more clearly who its paying readership are likely to be and what they are uniquely seeking from Fairfax sites.”

Manne bites Australian

Australia’s national daily newspaper The Australian has been wasting scarce journalist resources on a vendetta yet again. The latest victim is media writer Margaret Simons whose 2007 book The Content Makers remains the definitive account of the geography of Australian media (though someone needs to update it for the last five years). In recent weeks, The Aus has unleashed its attack dogs over claims Simons has somehow caused a breach of practice by her actions in the recent Finkelstein Review into media which was inspired by the serious criminal behaviour of one of The Australian’s sister publications in the UK. There are many ways in which this attack on Simons is risible and they are all brilliantly exposed in Robert Manne’s new Monthly essay.

The point Manne is making about the tactics of the newspaper is twofold. Firstly, it doesn’t matter if your allegations are true you just have to make enough of them and some of the mud will stick. Secondly, it is another shot across the bows of anyone who dares be critical of the newspaper with treatment similar to Julie Posetti and Larissa Behrend dragged out whenever a punchbag is needed.
The newspaper fulfils a crucial function in our democracy as one of the few media outlets with a truly national outlook. But it would appear the power conferred by being one of the central squares of Australia’s public sphere has gone to the broadsheet’s head. In its constant efforts to defend itself against critics, it has become warped and has forgotten its purpose: to give Australians a useful national perspective on the important news of the day.
The Australian appears not to want to learn from its mistakes. It never admits it is wrong. Under Chris Mitchell in particular (editor in chief since 2003) it has been front and centre in a culture war. The newspaper and its Saturday companion have an armada of columnists which can recite the party line in their sleep and who regularly trot out the house rules.
There are enough good writers at the paper to provide the news function. They cover politics, business, law and international affairs in some detail (with the help of good Murdoch sister papers such as the Wall St Journal and The Times). But their editorial and opinion pages have become barren wastelands of News groupthink where writers like Greg Sheridan, Chris Kenny, Dennis Shanahan and Christopher Pearson flourish. Even when turning to unorthodox opinion it favour those who unorthodoxy is mostly directed against the left and the greens (Brendan O’Neill, Frank Furedi, Bjorn Lomborg) .
As Manne said (and as I can corroborate from discussions with News journalists) there are many within the organisation appalled by the blatant and biased political tone set by the editor and his inner team. Manne reckons they should speak up which would be a better way of dealing with issues than any outside body Finkelstein could recommend. Indeed there is a precedence when journalists at the Australian went on strike in 1975 in protest as Murdoch’s open support of Malcolm Fraser in the lead up to the election.
But it is unlikely any uprising will come from within. News is one of the last 20th century media empires and most workers there fear for their future. It is not making a graceful transition to the digital age though it remains an extraordinary wealthy company and very powerful in the local market. The Australian, often described as a Murdoch vanity project, is not driving any of this wealth. But it is very influential with its high demographic readership and its access to power. Politicians of both major parties are wary of criticising it though the Greens have dubbed it hate media.
This is unsurprising as much of Mitchell’s vitriol is reserved for the party which his paper has openly called to be destroyed at the ballot box. Why The Australian even feels it has a right to make such a recommendation is a revealing aspect of its DNA. “We know best,” it screams and we will punish anyone who has the temerity to think otherwise. No wonder it cannot deal with the social media sharing tools of 21st century when its views are steeped in 20th century paternalism. It prefers intimidation to trust as a way of maintaining its authority. But The Australian is on borrowed time and not just because Murdoch will sooner or later die. Its thrashed brand is a tragedy as much of Chris Mitchell’s making as Rupert’s and one which must not be repeated by whatever colonises its habitat when it is gone.

Wanting less News: Pay TV piracy and News Corp

If there was any doubt that News Ltd have too much power in Australia, it should be dispelled by their aggressive handling of the allegations of global Pay TV piracy this last week. The issue was launched internationally by a BBC Panorama program called “Murdoch’s TV pirates” and it was given a local angle with long time Murdoch tormentor Neil Chenoweth’s series of articles in the Australian Financial Review (Chenoweth was also an adviser to the BBC program). News Ltd has tried to bully the AFR out of their allegations while also questioning SBS for showing the documentary hinting it does not correspond with the station’s code of practice.

The Panorama program focussed on a British issue. It alleged News Corp security arm NDS (headquartered in Israel) hired an expert team of Pay TV hackers from the piracy site called The House of Ill Compute (THOIC). Originally known as News Datacom Systems, NDS established the “Operational Security” group in the 1990s to ensure the security of Murdoch’s growing pay TV interests. Cracking codes is not illegal but spreading the cracked code to encourage piracy is. NDS busted THOIC piracy but instead of prosecuting them they hired them. The THOIC brief was to open up the security codes of NDS competitors, Canal+ (from France), and flood them on the market. This action, Panorama said, was directly responsible for the death of On Digital (later called ITV Digital) which used the Canal+ system. On Digital was the biggest pay TV threat in the UK to Murdoch’s BSkyB which had smartcards made by NDS.

Panorama tracked down Lee Gibling, the former head of THOIC who told them NDS hired him to break competitors’ smart card systems. Panorama also secretly filmed two other key witnesses, former NDS employees Ray Adams (previously a Metropolitan Police commander) and Len Withall and aired the footage without their permission. The footage found evidence that emerged in 2002 showing links from THOIC to News Corp. Canal+ sued News Ltd who dealt with the problem by spending $1 billion on an Italian Pay TV company called Telepiu, owned by Vivendi Universal which was on the brink of bankruptcy. Vivendi Universal also owned Canal+. The terms of the deal was to drop the lawsuit and the Canal+ Tech team that developed the smart cards was also disbanded.

In Australia, the AFR published the end of what they called “a four year investigation” into similar allegations into the local pay TV market. They published an archive of 14,400 Ray Adams emails and said piracy cost Australian pay TV companies $50  million a year at its height in 2002. It helped cripple the finances of Austar, which Murdoch’s part-owned Foxtel (which uses NDS) is now buying. The AFR published emails which were submitted in legal cases brought against NDS by rival pay TV operators in the US (DirectTV, Echostar) Europe (Canal+ and Sogecable) and Malaysia (Measat). Like the way they dealt with Canal+, News Corp bought 34 percent of DirectTV to end that case. In the only one to go to trial, Echostar won three of six counts, but won only minimal damage and had to pay court costs.

In Australian law, unauthorised access to electronic networks and illicit modification of databases are criminal offences. But Bruce Arnold, Law Lecturer at the University of Canberra, is only prepared to say News Corp may have exacerbated the issue. “Academic and industry research over two decades indicates the problems experienced by the defunct or ailing television networks were primarily attributable to poor management, poor marketing and inadequate capitalisation,” Arnold said.

Finding hard evidence is not easy, as Terry McCrann alluded to when hauled out by the Herald-Sun to defend News. McCrann wanted to see an email quoted in the AFR. “You know, something like: Murdoch to 007: My plan for world pay-TV domination rests on your piracy skills. Let’s target one million pirated cards by Christmas.”

McCrann was flippant but giving the nastiness at the heart of News Corp exposed in the Levinson Inquiry, it not beyond the bounds of reason to think Murdoch wanted to see exactly that: one million pirated cards on the marketplace by Christmas. Such thoughts never make it to an email. Britain’s TV regulator Ofcom is examining if Rupert and James Murdoch are “fit and proper” to be in control of BSkyB based on the phone hacking scandal. One of the hacked MPs Tom Watson says the pay TV allegations should be added to that investigation.

The Australian Competition and Consumer Commission is reviewing the $1.9 billion Austar takeover bid. With such a cloud over the Empire, it seems beyond belief the Australian Government should allow yet another contraction of ownership in the most concentrated media landscape in the western world. Yet time after time, Murdoch gets his way in Australia. Robert Manne explains why this is a problem: “The more the media is concentrated, the greater is the problem for the health of democracy”, Manne writes. “Yet the more the media is concentrated, the less likely it is that the issue will be debated freely in the only appropriate forum for the discussion, the media itself.” News Ltd Australia should be broken up, not expanded.

Guardian’s Rusbridger and Davies: Media Personality 2011

The third annual Woolly Days media personality of the year (after Mark Scott in 2009 and Julian Assange in 2010) is shared between Guardian editor Alan Rusbridger and Guardian journalist Nick Davies. Rusbridger and Davies win the 2011 award for their disciplined and determined expose of the insidious tactics of the News International empire in illegally hacking phones for dubious journalistic ends.

The pair’s actions caused the folding of the News of the World and the resignation and charging of several high profile current and former News International execs including David Cameron’s spin doctor Andy Coulson. It also hastened the end of the Murdoch dynasty as the public furore caused in the wake of the Guardian’s revelations put a cloud over James Murdoch’s ability to lead the company. The biggest economic impact was the loss of the money-spinning BSkyB takeover which looked inevitable as recently as a week before the scandal broke.Rusbridger told the remarkable story of the phone hacking in his 2011 Orwell lecture. In January 2007 News of the World royal reporter Clive Goodman was jailed for hacking into the mobile phones of three royal staff, an offence under the Regulation of Investigatory Powers Act. News International chair Les Hinton told a 2007 House of Commons select committee on culture, media and sport Goodwin acted alone and without their knowledge.

News continued its strenuous denials of a wider conspiracy until 2009 when Davies splashed his Gordon Taylor revelations. Davies revealed Murdoch had paid out over a £1m in legal cases that threatened to reveal the phone hacking. Professional Football Association boss Gordon Taylor was paid £700,000. Davies revealed the suppressed legal cases were linked to the Goodman case.

A News private investigator Glenn Mulcaire was also jailed in January 2007. Mulcaire admitted hacking the phones of five other targets, including Taylor (the others were Lib Dem MP Simon Hughes, celebrity PR Max Clifford, model Elle MacPherson and football agent Sky Andrew). In 2008 Taylor sued News on the basis that they must have known about it. News submitted documents to the High Court denying keeping any recording or notes of intercepted messages. Taylor’s lawyers demanded detailed police evidence which revealed Mulcaire had provided a recording of Taylor’s messages to a News of the World journalist who emailed them to a senior reporter. The evidence also found a News of the World executive had offered Mulcaire a substantial bonus for a story specifically related to the intercepted messages. The News case immediately collapsed causing the payout.

When the Guardian revealed the story, News and its supporters in blue closed ranks. The News of the World furiously attacked the Guardian while in The Times the police assistant commissioner in charge of the original investigation downplayed the disclosures saying there were a handful of victims of hacking and only a few hundred targeted. According to Rusbridger, the police conducted the quickest review in recent history – a few hours. News International exec Rebekah Brooks (ultimately undone by the scandal) said the Guardian had “deliberately misled the British public”.

A week later Rusbridger and Davies appeared before the House of Commons select committee on culture, media and sport. It was there Davies produced the “For Neville” emails that destroyed News’s case against the Guardian. The emails were for Neville Thurlbeck, Chief Reporter of the News of the World, and they conclusively showed people other than Goodman were aware of the hacking. Yet police commissioner Paul Stephenson told Rusbridger that Davies was barking up the wrong tree. In November 2009 the Press Complaints Commission rejected the Guardian’s claims, but were forced to change their tune in July 2011 after the Milly Dowler affair came to light.

On 4 July, Davies and Amelia Hill revealed the News of the World illegally targeted missing schoolgirl Milly Dowler and her family in March 2002 using records stolen from BT’s confidential records. The affair seemed particularly horrific to the public because of the revelation NotW deleted messages from Dowler’s message bank giving her parents false hope she was alive. The paper made no effort to hide that fact even publishing details of a message in a 2002 article. The Met Police’s QC now says the messages were probably automatically deleted but the damage was already done. Murdoch was forced to personally apologise to Dowler’s parents and his empire started unravelling as damaging allegations followed in the Leveson Inquiry.

Nick Davies was honoured for his series of articles with a swag of awards. He was named journalist of the year at the Foreign Press Association Media Awards 2011, won the Frontline Club award for his investigation and also won the FPA print and web news award along with Hill for the Dowler story.

Rusbridger used the Orwell lecture to stake out a new future for a troubled industry. He said self regulation was a joke and the PCC had no powers. He said they needed a mediation power which would be cheaper to access than a libel trial and would be a vital input in any court action. Rusbridger also asked deep questions about what the “public interest” means: “It is not only crucial to the sometimes arcane subject of privacy,” he said. “It is crucial to every argument about the future of the press, the public good it delivers and why, in the most testing of economic times, it deserves to survive.” For raising these questions and for relentlessly following the evidence when it seemed they had little to go on, Alan Rusbridger and Nick Davies were a breath of fresh air to a deeply troubled media industry, economically and ethically.