Many start-ups face a dilemma when looking to grow their businesses. Do you attempt to do it organically, and therefore slowly, or take on funding to turbo-charge growth, but give up a large chunk of the business to someone else?
Murdoch has managed to get the best of both worlds. Despite owning just over a tenth of the business himself, he has managed to maintain a tight grip on News Corporation through an unusual “A” and “B” share classification.
While retaining a large chunk of the vote-allowing A shares, the sale of B shares has allowed News Corp to expand across the US, Europe and Asia. While his shareholders are reportedly unhappy at present, fortunately for Murdoch most of them each own 2% or less.
Whether it was Page Three Girls’ at The Sun or a studio-backed TV network at 20th Century Fox, Murdoch has shown an innate sense for the products and content that consumers want.
His approach may have been derided as populist, but the needs and wants of the customer is something that every entrepreneur should keep front of mind.
Murdoch, who realised the media wasn’t always doing this, once asked rhetorically: “Is there any other industry in this country which seeks to presume so completely to give the customer what he does not want?”
Murdoch didn’t just shift one business model around the world, clumsily adopting it for every market he landed in. He also challenged existing practices and, arguably, created new genres.
A prime example is his controversial Fox News network in the US. Launching in 1985 with the seemingly impossible job of taking on NBC, CBS and ABC, Fox introduced colourful, loud graphic and the dramatic “Fox News Alert”, which brought an element of entertainment to the previously staid TV news industry.
To boost take-up by consumers, Murdoch paid cable providers $11 per subscriber they took on, in a reversal of the normal arrangement where cable companies paid carriage fees to TV stations.
The tactic worked. Fox News is now the market-leading TV cable network in the US.
Murdoch’s adoption of new technology didn’t start and end with his 1980s newspaper revolution.
In February, News Corporation launched the world’s first iPad-only news app. Murdoch, who hired an army of new staff for the venture, has regularly enthused about the potential of smartphones and tablets to rescue declining newspaper revenues and has broken ranks with other publishers by declaring that pay walls will be set up around News’ online content.
Murdoch’s father Keith was a journalist who reported from Gallipoli during World War I. Despite his testimony on Tuesday that he takes a hands-off approach to his newspapers, former editors have described how Rupert Murdoch would call them up to talk about the stories of the day.
While the style, tenor and trenchant opinions of his media outlets may infuriate some, it’s hard to argue that Murdoch doesn’t love the product he sells – an important quality for any business builder to have.
As Murdoch once put it: “I try to keep in touch with the details… I also look at the product daily.”
“That doesn’t mean you interfere, but it’s important occasionally to show the ability to be involved. It shows you understand what’s happening.”
