The Murdoch MacTaggart lecture

By Felix Salmon
August 30, 2009
MacTaggart lecture from sounding as though they're emanating from a veritable dinosaur. In an age where pretty much everybody agrees on the importance of increased regulation in the financial sector, it seems trite at best for him to equate any such impulses with creationism:


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James Murdoch is slightly younger than I am, but that doesn’t stop large chunks of his MacTaggart lecture from sounding as though they’re emanating from a veritable dinosaur. In an age where pretty much everybody agrees on the importance of increased regulation in the financial sector, it seems trite at best for him to equate any such impulses with creationism:

The consensus appears to be that creationism – the belief in a managed process with an omniscient authority – is the only way to achieve successful outcomes. There is general agreement that the natural operation of the market is inadequate, and that a better outcome can be achieved through the wisdom and activity of governments and regulators.

This creationist approach is similar to the industrial planning which went out of fashion in other sectors in the 1970s. It failed then. It’s failing now.

Actually, I can’t remember a time when there was less faith in the ability of the unfettered market to create successful outcomes, either in finance, where largely-unregulated financial institutions ended up needing hundreds of billions of dollars in state bailouts, or in journalism, where media outlets in general, and newspapers in particular, are dropping like flies, helpless in the face of the onrushing digital era.

While it’s pretty obvious that in a competitive marketplace, the cost of any good will fall towards its marginal cost — which in a digital world is free — Murdoch still feels happy proclaiming, against both evidence and common sense, that “it is essential for the future of independent digital journalism that a fair price can be charged for news to people who value it”. Does he really think that if the BBC went away, that would open up the door to charging for digital journalism online?

James should cross the Atlantic a bit more often. The dream of being able to charge a fee for digital journalism is one which should by rights have died long ago, but it’s being kept alive by dint of the sheer desperation of those, like James Murdoch’s father Rupert, who have convinced themselves that it’s the only way that their media properties are going to be able to continue to make enormous amounts of money.

Weirdly, all of this silliness comes in the context of what’s actually a really sharp and perspicacious lecture. James is quite right that state-sponsored meddling in the media universe is likely to do more harm than good, especially when the state’s market share exceeds 50%. The BBC is too big, and the Corporation really is overstretching, especially when it does things like buy Lonely Planet. And the regulators, in many ways, are even worse.

On the other hand, Murdoch himself has a monopoly on pay-TV service in the UK at least as strong as the BBC has on free TV, and the existence of any monopolist is prima facie evidence of the need for a strong regulator. Yes, the BBC should be smaller. But then again, so should Sky.

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