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Murdoch to pit Hulu against Netflix and Amazon
MUMBAI: With the online streaming space in the US getting fiercely competitive, Rupert Murdoch, in partnership with Disney, is aiming to pit online service Hulu against Netflix and Amazon.
Speaking to The Wall Street Journal editor-in-chief Gerard Baker during a technology conference hosted by the Journal at Laguna Beach, the 21st Century Fox chief executive and News Corp executive chairman addressed the industry’s need for a serious competitor against Netflix and Amazon.
A rival to Netflix, Hulu is run by 21st Century Fox in partnership with Disney and NBC Universal. Last year, Hulu CEO Jason Kilar had left the company for a new video start-up, Vessel. Murdoch admitted that there were some problems initially, but now Disney and Fox are on the same page and they aim to drive Hulu as a strong competitor in the space.
He also spoke about HBO’s new streaming service and said it would be difficult for HBO to launch a standalone service while negotiating with cable companies.
“They do not want to get into conflict with them, so they’re really only aiming at the moment at the 10 million people who don’t get cable,” he said.
Having built a multi-million dollar empire, Murdoch has made some risky moves as well. Among these was when they bought The Sun newspaper, which was bankrupt and changed it into a tabloid.
Speaking about another risky decision, he stated, “I started Sky, which everyone thought was crazy. We failed to get the licence. It was almost a pirate station. Today, it’s a very undervalued $25 billion company. We own 40 per cent of it.”
However, he claims that the best deal he did was Twentieth Century Fox. “I said, if we’re in television, content is king, we’ve really got to be able to be where it’s made, not have to overpay for it. Today, Fox is worth $75 billion. Shareholders are happy.”
And then there was no stopping, as the company launched Fox News.
“People thought we were just crazy. I was the only one who wanted to do it in the company or outside. And of course, all the analysts, who know everything, said I was mad. And today, it has a bigger audience than all the other news networks together and makes way over $1 billion a year,” Murdoch stated.
Also speaking about his publishing and financial information firm Dow Jones, he said that when they acquired it from the Bancroft family in 2007, they paid a high price. But it was because they really wanted it.
“And now I think it’s absolutely the cornerstone of everything we’re going to do. It’s a terrific platform,” he mentioned.
But while the company has had its successes, it has had its share of failures as well. And one among these was Myspace. Murdoch revealed that they indeed messed it up, but have learnt from the experience.
“It was growing like crazy, and the chief executive of Fox and myself said, ‘Well, we don’t know enough. We’ve got to get advice’. We took bad advice and put in a layer of bureaucracy from our own company that didn’t know any more than we did to study it. And it was completely the wrong way. We either should’ve had faith in that management, and let it run, or changed it and found someone,” he said.
He also spoke about the recent bid for Time Warner which fell through, and stated that it was their loss. Everyone in 21st Century Fox thought this was a great fit with Time Warner Cable and Comcast coming together. They felt they needed more critical mass in content but they weren’t ready for it.
Murdoch highlighted, “So anyway, we made a good bid. And then it was quite clear that we’d have to put the price up another $10 or $12. And we would have been very financeable. But the fact is we would have had over $90 billion debt in the combined company. There will be other times. There will be other opportunities.”
Speaking of other opportunities, News Corp News Corp recently made its biggest investment so far, in Move, which includes the Realtor.com digital real-estate listing site.
Murdoch stated that Realtor is a huge opportunity. It’s a very fragmented market, with no one player dominating it.
“There’s a lot of work to do. You can do a much better job in selling houses, or enabling people to sell houses, with a website than you can with a small ad or even a large ad in a newspaper,” he said.