Bottom Line: Murdoch is a force to be reckoned with

Elizabeth Fournier
LAST FRIDAY I sat down and watched a TV programme, on a terrestrial channel, at the scheduled time. It felt like an occasion. Like much of the population, such is the choice of media offered now that conventional TV viewing feels like the last resort; attractive only once the Netflix sub, iPlayer catch-up and YouTube browsing are all exhausted. The shift in viewing habits – almost 30 per cent of us chose recorded TV over live shows last year, according to Humax –­ must weigh heavy on Rupert Murdoch’s mind. Though BSkyB still commands 10.5m TV subscribers in the UK, competition from on-demand streaming services like Netflix and Amazon is looming large. And when even Apple is getting in on the game (with its rumoured $3.2bn deal for Beats) you know it’s getting serious.

For Murdoch, competition means one thing: acquisitions – hence his latest plan to combine pay-TV assets in Germany and Italy.

For shareholders, the German market looks like a no-brainer; unlike the UK, where Sky is battling for customers, Sky Deutschland is growing at a much faster rate, compared to the total size of the market. But Italy will be a harder sell – pay-TV exposure is limited, and Sky Italia is shedding customers; it’s hard to see what the business would bring to BSkyB’s vision of a pan-European pay TV provider. That – plus antitrust concerns – are clearly weighing on investors’ minds.

But if Murdoch pulls it off (and if anyone can...) they’ll be sitting on something that just doesn’t exist at the moment – a European giant with more than 20m subscribers and over £1.3bn in profits. And that’s exciting.

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