Will there ever be another media empire?
I’ve been thinking a lot about Rupert Murdoch. Not like, in a weird way. But as a founder.
Part of that is because I recently started reading a book called “Hard Money”, gifted to me by a friend, Nick Srivastava. It’s about a midcentury father who scrapped together a media/telecom giant that he’s now handing down to his children in classic monarchist style. It obviously reminded me of HBO’s hit show Succession. Which is because both are clearly echoes of the real life story of Rupert Murdoch, the man who built Fox News.
That original founder story is more than just fodder for good fiction. It’s the epitome of something far larger. The very idea that in a single lifetime, through sheer will and force of personality, one man could build something enormous and powerful that can influence the lives of millions.
Rupert Murdoch may be the epitome of the builder-conqueror mindset that defined the 20th century. It’s also a success story that may no longer be possible in the 21st.
The Fox and the Hound
For people my age, it’s hard to think about Murdoch’s Fox News as something “new”. Growing up, CBS, NBC, ABC, and Fox were always just “the news”. They were indistinguishably channels 2, 4, 7, and 5. But one of these things is not like the others.
For decades, NBC, ABC, and CBS were “The Big Three”. a holdover from a much simpler time in America’s media history. When my dad was a kid, the Big Three were the only channels on TV. If you missed their nightly news, that was it.
(I’ve also been told there used to be a time of night when the TV just “stopped”. There was no more programming, and from then until early morning, all that channel would play is…static. Spooky.)
Against that backdrop, Rupert Murdoch came in and started…building. Buying local news channels across the country until he’d cobbled together market share in enough regions to launch a national brand. Eventually it became so large that idiot kids across the tri-state area assumed it had been there forever just like the rest. But while the other networks were born from legacy, their upstart rival had no such pedigree. It had to fight for its place on the top.
Throwing Seeds in a Walled Garden
The Fox/Murdoch story is fascinating because it feels uniquely…20th century?
I’ve been thinking a lot about how in our current high interest rate environment, certain business models don’t work. And I’ll be honest, I thought that was part of the story here. But then I checked and realized when Fox was founded in 1996, the 10yr treasury rate was above 6%. Not exactly free money.
So growth wasn’t free. But also, back in the analog era, the battlefield wasn’t infinite.
(Be warned, I’m about to nerd out here).
Both radio and television are technologies that fundamentally operate on oscillations in the frequency of radio waves. In plain english? We send encoded signals in the air to make TV and radio happen.
What’s fascinating though, is that both government and private companies need to coordinate if that system is going to work. Otherwise you’ll have two tv channels trying to transmit programming at the same frequency. Then instead of “Young Sheldon”, maybe your 9 year old is accidentally watching “Love Island Australia”. Or more likely it’s just static. This stuff is complicated.
The point is, if TV channels don’t cooperate, TV doesn’t work.
Now here’s what’s really interesting about this system. Because there’s a limited slice of radio spectrum allocated to cable (rather than radio, satellite, or space research), there are only a limited number of channels that can exist in a given region.
This scarcity means that radio spectrum is limited. It’s also valuable. Moreover, with limited channels, viewer’s options are just as constraind as the number of competitors. And as you cobble together more and more spectrum licenses in different markets, a media entrepreneur can start to boostrap scale economics, brand recognition, and margin advantages. Which begins to look like the foundations for a very promising upstart empire a la Rupert Murdoch.
Of course, the number of channels in this spectrum licensing system has increased over time due to technological improvement. Which is why we have several hundred channels now, instead of the original 3.
Now in the era of fiber optics and digital cable, that number is effectively limitless, which means effectively limitless competition. And that’s before we even mention that TV now has to compete with streaming, Youtube. TikTok, Instagram, podcasts, and everything else you could be doing with your free time.
I think you see where I’m going with this.
Technology changed and almost overnight an amazing business became…much less so.
The End of Modern Media?
Don’t misunderstand me. I’m not saying the growth of Fox News is some amazing beautiful thing. I certainly don’t agree with its politics. But its story is interesting. And I truly wonder if it’s a story we’ll ever see again.
New technology created new types of media. And of course that has benefits. Smart phones and social media mean anyone can create, and everyone can find content that appeals to their weird specific niche.
But there is a tradeoff in this transformation.
While your favorite TikToker might be able to survive on influencer marketing money, big media productions cannot. No one is funding movies off Instagram likes. And as the world’s attention continues to fracture into smaller pieces, I wonder if anyone will ever again be able to cobble together enough attentional capital to fund truly exceptional (and expensive) content that’s different than what came before.
Basically what I’m saying is:
Empire’s are expensive.
And while Boomer’s had Murdoch stapling spectra together til he could challenge the bigs, our generation might be stuck with…ambitious kids memorizing dances and chasing trends. And if we never get something new and huge ever again, that would be a bit of a tragedy for consumers everywhere.
But then again, Mr. Beast is absolutely killing it right now. So maybe I’m wrong. Who knows.
Until next time. This had been,
The Weekly One Pager