Media Forum: Is Murdoch right on Ofcom?

Was James Murdoch's tirade against the regulator fair, Alasdair Reid asks.

A few minutes into his MacTaggart Lecture at this year's Edinburgh International Television Festival, James Murdoch went bananas. No, really, he did, comparing Ofcom's dabbling in the media market with moves in the international banana market in the 50s to replace the then dominant Big Mike banana variety with the supposedly superior Cavendish strain.

Now, it seems, the Cavendish, like its predecessor, may be succumbing to the Panama Disease. Murdoch's conclusion? It ill-behoves mere mortals to attempt to "manage natural diversity".

Of course, Ofcom wasn't Murdoch's only fruit. The News Corp executive had a pop at the BBC, too. And the European Union.

But the bottom line was his view that, in the best of all possible worlds, where Ofcom is concerned, we should follow the example of the anarchistic Dutch traffic engineer Hans Monderman, who has successfully campaigned for the removal of vast amounts of sign-age clutter from city streets, not just in his home country but across the rest of the world.

He (Murdoch, not the Dutch bloke) pointed in particular to the mountains of paperwork - reports, consultations, reviews, guides, rulings - that Ofcom churns out each year. Ofcom's sole purpose, he implied, is petty intervention for petty intervention's sake.

Murdoch added: "A radical reorientation of the regulatory approach is necessary if dynamism and innovation is going to be central to the UK media industry. The discipline required is to contemplate intervention on the evidence of actual and serious harm to the interests of consumers - not merely because a regulator armed with a set of prejudices and a spreadsheet believes that a bit of tinkering here and there could make the world a better place."

Bananas? Or does Murdoch have a decent point here? Not really, Jim Marshall, the chairman of the IPA Media Futures Group, says. He adds: "I can't think of a single thing that Ofcom has done (in the broadcast market) that has been damaging. So I don't think this criticism is fair at all. In fact, you could argue that it's rather naive.

"You can't pretend that Darwinian rules of the free market apply because, in the UK, that situation has always been distorted by the BBC. So Ofcom is actually in an unenviable position because the part of the market it's responsible for is in serious difficulties. A wholly free market would result in the UK having only two broadcasters - the BBC and Sky. James Murdoch would like that - but it would not be in the interests of advertisers. We need plurality and the only way it can survive is if it is protected."

Bob Wootton, ISBA's director of media and advertising, isn't so sure. He explains: "I'm not anti-Ofcom by any stretch of the imagination. But there's no recession in regulation, that's for sure. It's always been true that (for various historical reasons) it's not really possible to see an unbridled free market working in UK media and I've always been of the view that intervention keeps the market honest. But, equally, it's true that you can have so much intervention that it becomes impossible to make the market work."

Absolutely, Neil Johnston, the head of TV at OMD, agrees: "A lot of the things that Ofcom gets involved in are politically motivated. The thing that springs to mind was its intervention in the whole advertising of fast food to children debate. Channel 4 was there before Ofcom and I believe it will be there long after Ofcom has gone. As for ITV, it would be better off because it would have got rid of its public service commitments far quicker."

And Steve Hatch, the managing director of Mediaedge:cia, concurs. He says: "There's a genuine challenge here. Where I think James Murdoch went wrong was tying this in with an attack on the BBC. I think we all know that the public at large loves the BBC. So that aspect of things has rather overshadowed his attempts to create an appetite for deregulation on the commercial side - which I support."

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NO - Jim Marshall, chairman, IPA Media Futures Group

"Advertisers need diversity and plurality in (the commercial broadcasting landscape) and, especially in the current climate, that can't be delivered without some degree of protection."

MAYBE - Bob Wootton, media and advertising director, ISBA

"I'd have to say there's a grain of truth here. I've always been of the view that intervention keeps the market honest. But, equally, it's true that you can have so much intervention that it becomes impossible to make the market work."

YES - Neil Johnston, head of TV, OMD

"Yes, I know Murdoch has an axe to grind but I feel there's a lot in what he was saying about Ofcom. I don't really buy the argument that Ofcom protects the long-term interests of the likes of ITV and Channel 4."

YES - Steve Hatch, managing director, Mediaedge:cia

"I support his attempts to create an appetite for deregulation - I think it's important for the future of commercial media in this country. At its best, the sort of regulatory approach (exemplified by Ofcom) serves an old-world media model. At its worst, it destroys businesses."