By Robert Liljenwall
With this piece we start a new regular feature for BrandTech News, in which our Brand Editor puts the squeeze on Brands that have recently soured. News Corp. is BrandTech News’ first recipient of the Lemon Award for the company that has most tarnished its brand through missteps, bad behavior, or just plain stupidity.
Revelations of alleged mass hacking of just about everybody’s email and voicemails plus bribery of police officials by News Corp’s News of the World tabloid can best be described as a massive tsunami of brand destruction that is still sweeping across the UK. Who knows where this will end? Second only to Disney as the world’s largest media company, the entire Rupert Murdoch empire is on the brink of tumbling off its global pedestal—just like Humpty Dumpty. Except Humpty Dumpty was never threatened with jail, let alone arrested. But already, News Corp has trashed its venerable 168-year old News of the World — shut down, gone. Its powerful chief, Rebekah Brooks, has been arrested, with more to follow.
Started long before you were born in 1843, the News of the World (NotW) was the biggest English language newspaper in the world. It was purchased by Murdoch in 1969, but the immense and quick execution of the entire NotW staff of 200 goes down as one of the greatest brand implosions of all time. But, wait there’s more. Also, the Police Commissioner of London has now resigned, although he admits to no wrong doing.
Is this News Corp’s BrandGate? Obviously, there is smoke from News Corp’s chimney…..News Corp has already withdrawn its bid for control of British Sky Broadcasting’s (BSkyB) massive satellite network …and while observers mused if the new Hacking Plague would spread to the company’s prime US properties….it already has with the resignation of Les Hinton, who resigned as the publisher of The Wall Street Journal (he had previously served as publisher for NotW). Does the glove fit here, too?
All in all, News Corp’s total market value has lost over $6 billion in value since July 1 when the scandal first broke (more than 13%)…..and last week, the company published a letter signed personally by Rupert Murdoch….”We are sorry.” He is making the rounds to get anyone to listen to his version of why he is so sorry.
Will it work? The essence of any brand is its commitment to core values and how it is perceived by its customers. Do they trust you? Obviously, there are chinks in Rupert’s armor. But it’s too early to tell what the long-term effects will be on Murdoch’s News Corp brand. He has managed to build strong brands in the newspaper business with The London Times and Wall Street Journal. And for his US holdings of Fox News, Fox Television, and 20th Century Fox Studios – he has significant brand equity despite dumping the UK newspaper that was a moneymaker and a huge public opinion influencer for 168 years. You have to be pretty desperate to do that.
This 80-year old Murdoch is not going quietly into the night … he is slashing, firing, and plunging into his brands with ever-quickening speed to stop the bleeding. His ace in the hole: Strong media he still owns. There is an old saying in the newspaper business: “You never argue with a man who buys ink by the barrel.” But in these days of electronic media, he may not have enough ink. More to follow. RJL
[image courtesy of Ambro, FreeDigitalPhotos.com]
- Six lessons from News Corp testimonies before parliament (news.nationalpost.com)
- Phone Hacking: Rupert Murdoch tells staff News Corp will emerge ‘stronger’ (telegraph.co.uk)
- The Murdochs must stop spinning and resign over the phone-hacking scandal | Robert Greenwald (guardian.co.uk)
- News Corp to emerge ‘a stronger company’: Murdoch – AFP (news.google.com)
- Cameron testifies on hacking scandal ties (cbc.ca)