In case you missed it, UK satellite broadcaster BSkyB (‘Sky’) lost its Chairman yesterday, after James “son of Rupert” Murdoch stepped down over his handling of the phone-hacking scandal that had previously swamped the UK publishing arm of News Corporation.
Indeed, as we reported, it has been all downhill for Rupert and James Murdoch over the past year, ever since the plug was pulled on The News of the World.
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Since then, they’ve both faced MPs questions, whilst James Murdoch resigned as Director at the Sun and the Times’ publishing company (NGN), and he later relinquished his position as executive chairman of News International. However, it’s important to note here, that the scandal so far has pretty much been centered on News Corporation’s UK publishing side.
The Murdoch Empire’s UK broadcasting behemoth, BSkyB, has emerged pretty much unscathed from the mess. That said, News Corporation’s plans to increase its existing 40% stake in the company and buy it outright were put on (permanent?) hiatus in light of the scandal that kicked off last July, whilst shares have been affected at various points throughout the debacle.
However, BSkyB is gearing up for what’s looking to be a monumental year for the company and, quite frankly, I’m surprised James Murdoch wasn’t encouraged to abort his Chairmanship much sooner than yesterday. What’s perhaps more surprising is that Murdoch is still wedging the Sky door open with one foot, as he retains his non-executive director role at the company.
The year ahead for Sky
A couple of weeks back, we reported that Sky is spinning-out a new brand called Now TV, to try and tap the 13m members of the UK public that don’t already have a paid-TV subscription package.
Sky CEO Jeremy Darroch is convinced the company can step in and give this significant chunk of the UK populace what they want, when they want it. “We can reach out them and offer more ways to offer them content,” he says. “Later this year, we’re launching an over-the-top TV service. Starting with movies, it will expand to sport and then to entertainment. It will be on a pay-as-you go basis, no installation.”
Despite newcomer Netflix aiming to enter 10% of all UK homes, this move from Sky is a potential game-changer that could knock all the potential competition out the water.
Sky also announced that Anytime+, its online VoD offering, would be extended beyond those without Sky Broadband, opening it up to 5m more customers. Before this roll-out, Sky Anytime+ was available to a mere 1.2m homes.
Back in January, Sky also announced a strategic partnership with Zeebox, which has already seen the second-screen app deliver special on-demand content for Sky’s Got To Dance show, including exclusive videos, music downloads and branded content. Throw into the mix the launch of its hugely popular Sky Sports F1 channel earlier this year, and all signs are pointing to a massive year for the satellite broadcaster.
The last thing BSkyB needs is a little distracting, annoying buzz in the background every time the phone-hacking scandal hit the headlines which, to be honest, is most days. And it’s also for this reason I’m surprised James Murdoch is staying in any kind of capacity with the broadcaster, as severing all direct ties with him seems to make the most sense.
In our Making Sense of the Murdoch Mess feature last year, we considered how the phone-hacking scandal would ultimately impact the Murdoch Empire. As News Corporation’s name continues to be dragged through the mire, and with more and more people’s being brought into the action, we said at the time that the buck would eventually stop with Rupert and he will have no option but to stand down. We wrote:
“In an attempt to save News Corporation, either Rupert, or his successor, may choose to sell off the newspaper side of its business altogether. Most of its revenue comes from other sources anyway, such as 20th Century Fox, so it would make sense to sever all ties with its newspapers, thus distancing itself from any more damage from the phone-hacking scandal.
If the scandal remains within the UK-side of its operations, then this sale could be limited to its three remaining UK newspapers – the Times, Sunday Times and the Sun. But two things are almost certain – Murdoch will go, and News Corporation will downsize – to what degree, remains to be seen.”
This hasn’t happened yet. But the cracks are certainly starting to show, as the scandal-that-won’t-go-away begins to creep into other areas of News Corporation’s business. Yesterday’s ‘revelation’ that James Murdoch is stepping aside is certainly a good move for BSkyB, and it should go at least some way towards ensuring its path to glory in 2012 remains roughly on track.