Category: Media

Andrew Hill

A deal between McGraw-Hill and CME Group to bring together the Dow Jones Industrial Average and the S&P 500 index would be a good moment to consider the irrelevance of the former and the significance of the latter.

What does the Dow have going for it? It’s arguably the highest profile stock market benchmark in the world – granted a daily airing by media worldwide. Its composition is stable (the last change was more than two years ago, when Travelers replaced Citigroup, and Cisco replaced General Motors). Its 30 component stocks are highly liquid, which makes the average quick to calculate. It is old. Very old: it was conjured up by Charles Dow in 1896, with a basket of railroads, steel companies and textile mills.

John Gapper

Since he kept on repeating it, there was no difficulty in working out what Jeff Bezos regarded as the most important aspect of the Kindle Fire launch in New York this morning.

Mr Bezos gave a little smirk as he announced the $199 price of his new competitor to the Apple iPad – and to the entire ecosystem of films, music, magazines and books that can appear on Apple’s device:

“This is unbelievable value. We are building premium products at non-premium prices. We are determined to do that, and we are doing it.”

John Gapper

At first glance, the apology by Reed Hastings, chief executive of the US video service Netflix, for raising the base price of his video service by 60 per cent looks sincere and heartfelt – the kind of plain-speaking that is too rare in chief executives.

“I messed up. I owe everyone an explanation.”

So far, so good, but reading further into Mr Hastings’ missive, which follows a 15 per cent fall in Netflix shares last week as it said it expected to lose 1m subscribers as a result, it becomes clear that the apology does not mean he is backing down – in fact, he is going further.

For a man running a small business, Michael Arrington has attracted a lot of attention in the past couple of weeks. By the time he agreed to leave AOL this week, he had stirred up a maelstrom across Silicon Valley and the digital media.

Andrew Hill

At July’s parliamentary hearings into phone-hacking at the News of the World, Liberal Democrat MP Adrian Sanders wound up his line of questioning by asking James Murdoch if he was “familiar with the term ‘wilful blindness’”.

Mr Murdoch, now deputy chief operating officer at News Corp and head of its international business, asked Mr Sanders to elaborate, which he did:

It is a term that came up in the Enron scandal. Wilful blindness is a legal term. It states that if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible.

John Gapper

The success of the New York Times metered paywall – it has gathered 224,000 digital-only web subscribers in its first four months (as well as 57,000 Nook and Kindle subscribers) – raises one obvious question: who will be next?

I was sure enough that the NYT’s experiment, in which readers who access more than 20 articles a month have to pay a subscription although articles accessed through social media links remain free, would work that I made a bet on it with Felix Salmon, a vociferous sceptic.

Felix backed down gracefully this week, acknowledging that I am extremely likely to win. My bet was that the NYT would have at least 300,000 digital subscribers after two years, so my bet should go into the money fairly soon (and Felix will owe me $100 for every 100,000 NYT digital subscribers above that figure).

There is no doubt which Murdoch family member emerged best from the phone-hacking hearing before a UK House of Commons select committee this week. Leaping across the room to land a loud slap on the idiotic foam-pie protester who had assailed her 80-year-old husband, Wendi Murdoch was fearsome.

John Gapper

The Murdoch phone hacking affair has made me reflect further on how powerful people who may have broken the law get treated in various jurisdictions – and revisit the case of Dominique Strauss-Kahn.

I wrote a column in the FT earlier this month defending the treatment of Mr Strauss-Kahn (or DSK, as he is known) at the hands of the New York judicial system. I argued that the police and prosecutors had acted correctly in arresting him promptly on charges of sexual assault, and later disclosing weakness in the evidence.

That did not go down very well with a lot of readers – here is a letter criticising my piece that was printed in the FT. However, I think that the Murdoch affair, and the collusion it has revealed among British politicians, media figures and the police make the New York authorities look even better by comparison.

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This blog is mainly about business and strategy and how and why people who run companies take the decisions that they do.

Most of the time, John Gapper is in New York and Andrew Hill is in London. We occasionally debate business issues between us, but your comments and criticism are welcome.




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About John and Andrew

John Gapper is an associate editor and the chief business commentator of the FT. He has worked for the FT since 1987, covering labour relations, banking and the media. He is co-author, with Nicholas Denton, of All That Glitters, an account of the collapse of Barings in 1995.

Andrew Hill is an associate editor and the management editor of the FT. He is a former City editor, financial editor, comment and analysis editor, New York bureau chief, foreign news editor and correspondent in Brussels and Milan.

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