Murdoch, YouTube and Sensibility

Last week the Wall Street Journal published a special section on digital technology and strategies. Among the stories in the section was an interview with Rupert Murdoch.

In that interview, the following exchange was reported,

"Ms. Swisher: How do you look at a YouTube? Sumner Redstone sued Google. Why didn't you sue them?

Mr. Murdoch: We came down to the view in the end that it was doing more to promote our shows than it was to hurt them."

I loved this short portion of the article. It so typifies wh Murdoch has been so successful.

Back when Google acquired YouTube, and the whole lawsuit issue came up, my consultant friend, S, and I were discussing what Redstone was doing, and who else might sue.

We agreed that, for most older media properties, YouTube actually stimulates new viewing, usage and, ultimately, purchase, at no expense to the owners of the properties.

Redstone clearly did not see it that way. But if you look at Redstone's companies, it's not a really pretty picture.

Over the past five years, as the nearby, Yahoo-sourced chart of prices for News Corp, CBS, Viacom and the S&P500 Index indicates, both pieces of Redstone's empire, split up in late 2005, have done poorly.

While CBS unexpectedly outperformed Viacom, which was supposed to have the better assets, and was still headed by Redstone, it, too, under CEO Les Moonves, has come back down to earth.

While Murdoch's NewsCorp may trail the S&P, it has handsomely outperformed all of Redstone's media properties. Its recent decline, along with CBS and Viacom, has been much milder, and has even turned up again recently.

My guess is that Murdoch's instincts for content media, in which he began, rather than Redstone's self-aggrandizing management style and expansion from movie theaters, accounts for a lot of the performance difference.

Thus, Murdoch's sense of getting something for nothing by letting Google's YouTube use his media content without payment or lawsuits over the whole matter indicate his better feel and touch for new media.

The performance numbers certainly seem to bear this out.