The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

It’s hard to look at the news photos of Rupert Murdoch this week. Where once was a titan filled with jouissance now there is an unsteady old man reeling from a week of up-ending headlines and revelations. Even though the collapse only began a week ago, it seems like we can hardly remember the globe-girdling empire builder.

That’s because last week’s revelations sapped him of his special powers. When it became clear that Murdoch’s signature tabloid, The News of the World, had invaded the privacy of ordinary citizens groping their way through extra-ordinary emotional events, the vibrant champion of ordinary folks and their simple tastes suddenly became the skulking vampire secretly feeding on the misfortune of powerless families.

That changes almost everything about Murdoch and his cultural legacy. His initial success ont he world stage was built upon a Puckish ability to exploit the class system in the UK. He presented himself as the champion of plain folks. Even though he was born into an Australian family of high social status, Murdoch’s great power came from an acute understanding of class resentment and how to harness it.

At bottom, class is nothing more than the idea that there is an Us and a Them. During Murdoch’s lifetime, the Them changed from plutocrats to celebrities. But the dynamic remained the same. The privileged few were fair game for anyone who kept them in their place.

The tabloid culture also thrives on the perpetuation of that divide. So by its very nature, the tabloid sensibility is conservative. To preserve it’s appeal, it has to perpetuate its own targets. It draws its power from frustration. Several commentators pointed out last week that despite the loud hectoring, News of the World had little to show for its crusades in terms of lasting reforms.

Indeed, the social contract the tabloids thrived on was one between stars and working folks. Stars were idolized as long as the tabloids to could regularly reduce them to people “just like us.” The tabloids confirm for the punters that stars, politicians and aristocrats are motivated by the same petty jealousies, weaknesses of character and unobtainable longings that motivate everyone else.

In all of this Murdoch’s papers were seen as having the authentic voice of the common man keeping the mighty in check. Once it was revealed last Monday that Murdoch’s paper was happy to prey upon the misfortune of the very persons they were meant to represent, the myth of Murdoch evaporated. Magically, Rupert suddenly appeared to the world as he always was: a billionaire manipulator whose primary interest was not to be the champion of regular folks but amass more profits.

And when he chose to defend a favored executive, Rebekah Brooks, over standing up for the interests and honor of the phone hacking victims, the last vestige of his popular appeal melted away. That Murdoch and his family don’t recognize how quickly their public image has shifted can be measured in their attempts to save the deal for Sky Broadcasting. By continuing to maneuver to preserve that deal, they reinforce the new understanding that they were never sincere defenders of US.

Indeed, Murdoch has shown in the UK that he is fully and finally just one of Them.

In his place, the BBC’s Paul Mason suggests, there is a new voice for the US against Them. Even though many in the press point out that the British Government failed to get to the bottom of the scandal and it took the resources and dedication of The Guardian newspaper to bring Murdoch’s wrong-doing to light, Mason points out that the essential element in dismantling the power of the tabloids was social media:

Large corporations pulled their advertising because the scale of the social media response allowed them to know what they are obsessed with knowing: the scale of the reputational threat to their own brands.

We do not yet know the scale of the Twitter and Facebook campaign on companies to pull their ad spend. A sense of it can be gleaned by the150,000 submissions to Ofcom over the BSkyB takeover.

It was the present and future threat to advertising revenue and to investment that forced Mr Murdoch to kill the News of the World.

In mass culture terms, social media is still in its infancy. Murdoch’s reputation may be tarnished by this episode but the shuttering of his newspapers won’t have much effect on the broader News Corporation empire. Over time, however, the Internet and social media already represent a growing threat to News Corporation. That’s something James Murdoch has already acknowledged and one of the reasons that what’s taking place in London this Summer may eventually be seen as a major turning point for the company.

Source:

Murdoch: The Network Defeats Heirarchy
by Paul Mason
July 11, 2011; BBC News

http://www.bbc.co.uk/news/business-14093772