Transcript: James Murdoch

July 23, 2013, 5:08 PM UTC

FORTUNE — Below is an unedited transcript of the talk:

ANNOUNCER:  Ladies and gentlemen, please welcome Fortune’s Adam Lashinsky.

ADAM LASHINSKY:  Thank you, everybody.  Thank you very much.  It’s my great pleasure to introduce to you James Murdoch, the deputy chief operating officer of 21st Century Fox.  I realize that 20th Century Fox has been uttered here and even written, and that’s not correct, it’s 21st Century Fox.

So James, thank you for being here very much.  I feel like for many people in the room this will be a first opportunity to see you, partly because, as we’ll discuss, you’ve spent a lot of your career outside the United States.  You recently returned to the United States where you grew up.  And you’ve had such an interesting journey in your career.  I don’t know how you feel about the word dropout, but you did not complete Harvard College, is that correct?

JAMES MURDOCH:  I think technically I’m on an extended leave of absence.  (Laughter.)

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ADAM LASHINSKY:  You founded a record label, you did digital strategy within News Corp, you headed STAR in India and China, you worked for Sky.  You’ve done a lot of things.

Now your primary agreement is 21st Century Fox’s television business.

JAMES MURDOCH:  That’s right, yeah.

ADAM LASHINSKY:  Could you discuss that a little bit, discuss how you spend your time?

JAMES MURDOCH:  Well, it’s been an interesting journey.  I spent most of my career at what most of us would know as News Corporation.  We just split our company in two, which is relevant for you and many of your colleagues at Time, Inc. as well, which is —

ADAM LASHINSKY:  Yes, it’s on our mind, especially today.

JAMES MURDOCH:  — publishing and book publishing business on one side, and the media and entertainment kind of business, the TV and movie business and related businesses on the other side.

And I spend — you know, what’s interesting about the TV business now, which is where I worked within the Sky businesses, the STAR business in Asia, and the FOX businesses, both in the U.S. and abroad, is just how exciting a sector this has become.  Really and I think mostly really creatively it’s become an enormously vibrant business in television in a way that it hadn’t been for a long time, particularly in the U.S. where, you know, for a long, long time the film business had this sort of creative kind of, you know, that was where everyone wanted to be, that was sort of up there.

Now I think really the television business has gone through and it continues to go through a creative renaissance.  And I see that everywhere around the world in our businesses, right, where customers are getting much, much more value from television, they’re being entertained in new and innovative ways.  We’re seeing a wide variety of choices really proliferate.  We’re seeing much more plurality in the marketplace in terms of choices of television.

And I use television loosely.  I should say that’s audio/visual programming, be it over the top, on the Internet, on traditional cable, whatever.  But audio/visual storytelling is really in a great period right now, and it’s happening at a time where we have enormous change in the marketplace, not just from the plurality of choices point of view but also in terms of the ways that customers, the tools that customers have to consume video is completely different than it has been at any time in our lifetime.  And it’s evolving as rapidly as ever and is accelerating.

So I think — you know, so I spend most of my time trying to manage a group of businesses and a group of sort of sometimes headstrong leaders in a marketplace around the world that I think is experiencing so much exciting innovation that for me the key thing to spend time is making sure that our businesses don’t look at it and say, how do I kind of react to all this change, but how do I get up in the morning and have an appetite for change, how do I bring new change into the marketplace, how do I make something for my customers that’s totally different.  It couldn’t be a more exciting time to be in TV.

ADAM LASHINSKY:  So I want to hit the pause button on the TV conversation.  Get it, pause button?  (Laughter.)  Come on!

JAMES MURDOCH:  You can do that now.

ADAM LASHINSKY:  And talk a bit — you’ve remained on the News Corporation board, but your operating responsibilities with 21st Century Fox.  Tell everybody a little bit about the whys and wherefores of the split, how you’ve accomplished it, and sort of what the trajectory of the two companies is now from your perspective.

JAMES MURDOCH:  Well, I think it became clear to us after many, a lot of really rapid expansion over a 20 or 30 year period, I would say really probably mostly the last 25 years, since the company as News Corporation really branched into electronic media with the acquisition of the 21st Century Fox film studio, and then the launch of the FOX network and then Star TV in Asia and then the Skys, you know, there was a period from ’85 to like 2000 I guess ‘7 I guess when we started Sky Deutschland, which I started in our German Sky business, where there was this huge amount of expansion, and we found that actually to gather the leaders of the company in 2010 required 38 different CEOs of operating companies, many of which had nothing to do with each other or very little.

And while the breadth and diversity of the business was exciting and dynamic for people, we realized that actually the interests of each one of those businesses wasn’t necessarily best served by being part of a broad-based conglomerate.
And our view, and I think a lot of people have done this before us, this is not particularly innovative, was that aligning both the kind of spans of central management and leadership and sort of strategy of these companies with their balance sheets and shareholders that had bought into those ideas was a much better place to be than having this tradeoff where your balance sheet and your shareholders were saying, listen, we always want you to invest in new cable channels or something like that, and we don’t want you to invest in making — you know, transforming the book publishing industry.

Now, I happen to think the book publishing industry is one of the most exciting digital businesses in the world right now, but nonetheless we really thought that each business would make much more sense separately.  And also having shareholders, balance sheets, and leadership aligned to those things would be very refreshing.

And I think what we found very quickly sort of in the six to nine months I guess where it’s felt like a reality, even though it’s only been a few weeks since we’ve been trading as separate public companies, that each company and much of the leadership within that company, and I count leadership going a long way through the company because everyone has to be a leader, really feel like their businesses make more sense, that there’s a greater coherence to those businesses, and neither business has lost its diversity, its dynamism, its internationalism, its cosmopolitanism, all that stuff.

So I think actually we’re much, much better off.  Even though they’re very different sizes, those companies, I think this is a better way to go.
And you look at somebody like — if you look at something like IAC or you look at, you know, Barry Diller’s career after FOX, you know, he calls it — he and John Malone would say the same thing, they’re kind of the anti-conglomerates, right?  And I think having shareholders align to particular business opportunities does have a lot of merit to it and they’ve created a lot of value.  So there is a lot to learn from that.

ADAM LASHINSKY:  Now, you’ve put that in very eloquent and colorful terms.  If I could paraphrase what you just said, the conventional wisdom out there is that investors and most business analysts love the entertainment business and hate the newspaper business, and the only person in the world who genuinely loves the newspaper business is your father.  (Laughter.)

JAMES MURDOCH:  I don’t know.  I think — I’m not sure that’s true.  Look, I think all of the media business is going through a really interesting time.  And I actually think ironically, even as we’re more interested — and I’m a real believer in it, that splitting these companies is the right thing to do — ironically a few years from now the business rules governing the written word versus audio/visual programming are going to look the same, right?

So if you’re ones and zeros and you’re packaging those ones and zeros in a particular way, you’re probably going to end up bundling different branded sets of ones and zeros for a price, and you’re probably going to be distributing them on multiplatform services, and probably the branded content business, be it a newspaper business, what used to be on a newspaper, is going to have moving pictures, is going to be bidding for sports rights, is going to be wholesaling its product to third party retailers downstream, and is probably going to look a lot like the cable business.

So I think there’s — so from a business rules perspective I think actually in a digital environment these things come together very closely.  Nonetheless, the transition to get there I think requires a much more focused and aligned leadership and shareholder base to get that transition through.  And I think that’s what’s important and why we’re seeing this today and why we think it’s a good thing for our business.

I think nonetheless that the newspaper business or the business of journalism remains something that I think a lot of people love, right, because a lot of people believe that it does a social good.

ADAM LASHINSKY:  I’m one of them.  (Laughter.)

JAMES MURDOCH:  Parts of it may do a social ill.  But in a free society you take the good with the bad, and you try to do that.  And I think the business of journalism is one that starts I hope from a noble basis, and making that pay and making that self-sustaining is really important.  So all the more reason to have investors that are aligned with the opportunities.

The last thing you want is a — I’ve sort of controversially talked about this in other countries — having the business of journalism being beholden to other interests as opposed to its own ability to self-sustain itself through profit is the most dangerous place we could be.  So in that sense —

ADAM LASHINSKY:  In that case you were talking about the government in particular in the UK?

JAMES MURDOCH:  No.  Or some oligarch somewhere or someone with other industrial interests or a car manufacturer, it doesn’t matter.  Factionalism around the press is dangerous.

And I think so I would just say for Time Inc., you know, and for Fortune and all this sort of stuff I think you’ll find that this split is going to be one of the most refreshing and most empowering things, because actually going and making your own hay and actually being able to then make those choices about investing for growth is much, much better than having someone else make it for you.

ADAM LASHINSKY:  I’m going to move on in a moment but it’s really interesting because in contrast with your father, the rap on you has been that, you know, you’re not passionate about the journalism business.  And so are you?  Because I’m hearing a little bit of love from you but not an overwhelming amount.  (Laughter.)

JAMES MURDOCH:  Well, look, I think the journalism business is a broad business, and I think characterizing it as newspapers is feared, right?

ADAM LASHINSKY:  Yeah, fine, forget about that.

JAMES MURDOCH:  But listen, I think as anyone who believes in a free society, I think you have to have some affection for the business of journalism, and I think you have to have a deep affection or people being able to articulate ideas and spread their opinions and intermediate where customers choose that that’s what they want.

ADAM LASHINSKY:  You’re not commenting on whether you love it as a great way to make money.

JAMES MURDOCH:  Look, I think it remains to be seen — I think it remains to be seen how the business models work, but I would say that the big brands, the big — you know, I think the big brands in what we consider traditional journalism will all be in what we would today consider the TV business in the future, because there’s no reason — we used to get into these arguments about access to the football field, for example, right, so all the newspapers had to be able to take pictures.  Once you can take 24 pictures a second with a camera like that, right, you have to then put restrictions on how those pictures get published and can you create a flipbook to create live pictures.  Now, those are rights that are sold.

My argument was always don’t worry about feeding the press here, the journalism business should be investing in rights and should be investing in exclusivity, because as barriers to entry come down, truth — we’ll get into this in television in a minute — as the barriers to entry come down if you’re a blogger or if you’re just an investor creating something new, if you’re a TV company or a newspaper, whatever you are out there in a digital environment where everyone has access, differentiating yourself is fundamental.

And actually fighting for sameness is crazy, right?  So if you say, listen, I just want to have the same picture that everyone else has, I want equal access to Getty images, you’re dead, right?  And that’s a way to just not be able to charge for what you do, and it’s an admission that what you do is no longer special for your customers.

So I think investing in the content itself, in the creative act, be it contributing, you’d call them contributors, they could be photographers, they could be reporters, they could be people who just want to go and do the work and the investigation, that’s the place to be investing and that’s the place — that’s what we feel in the television business everywhere, be it factual or fiction, investing in that differentiation is the thing that’s going to produce the big returns for us over the long term.

ADAM LASHINSKY:  So I will take your implicit offer of a segue here to talk, to explain to everybody 21st Century Fox’s content strategy.

JAMES MURDOCH:  Well, we have a pretty simple view, which is that you have an environment today where you have for all intents and purposes — we can get into arguments about developing markets and whatnot, and we should talk about them, but for all intents and purposes you’re going to have a lot of broadband everywhere.  You’re going to have ultimate plurality, which is everything ever produced available everywhere and to anyone.  And you’re going to have an environment where the barriers to entry in terms of packaging that product downstream, if you’re Netflix, if you’re Amazon, if you’re Verizon or AT&T or Dish, DIRECTV, Comcast, Time Warner Cable, the Skys, Virgin Media, LOVEFiLM, you name it, is really easy to do.  The barriers are down, so you’re out there doing that.

Now, what I believe that leads to is a huge scramble for really great programming, right?  So people — it will no longer be acceptable to be able to program the middle of the road, to be able to make an on-demand service, an SVOD service or a channel or whatever it is, that’s populated with just kind of stuff that you picked up cheaply and you made it look nice.  I think a lot of factual programming comes under pressure and a lot of investment goes into dramatic programming, goes into sports, goes into original writing.  And I think that investment really flows upstream.

So our strategy very much has been to simplify our operating model, so to have less companies doing more and investing more in original programing.  So that means selling our minority investments in our Chinese media businesses, for example, simplifying, you know, getting out of all our Eastern European businesses, getting out of those other things, and having big brands in big categories that mean a lot for customers downstream.  So if it’s FOX Sports, if it’s FOX, if it’s National Geographic, if it’s Sky Sports, et cetera, that’s what we want to invest in.  Then we want to take that simplification and we want to invest upstream as much as we can.

ADAM LASHINSKY:  And explain to the non-sports fans in the room this audacious plan that you have regarding sports.

JAMES MURDOCH:  I don’t know if it’s audacious.  I mean, we sell an opportunity because we think that sports — talk about investing in drama, the playing field creates some of the greatest drama you can — they make it for you, right, you have to pay.  And I think what we see in sports is we see live programming, something that’s not time-shifted at all, we see something that creates incredible passion amongst customers and they really just love it, particularly when you can really invest in the experience onscreen with data, with cameras, with better production, which I hope we’ve done at FOX and at Sky Sports, and at STAR Sports before.

And we looked at that, and over the last couple of years we’ve seen really an opportunity where we can simplify our business and create a real global sports business for the first time ever.  And ESPN has really been retreating from the sports business outside of the U.S., which has been an interesting moment.  So we were able to buy them out of our joint venture across all of Asia.  We were able to consolidate our Latin America sports business.  We’re launching FOX Sports One, a real competitor to — or rather I shouldn’t say that, we don’t say that — (laughter) — a new — a new national sports channel that’s going to be great in America.

ADAM LASHINSKY:  I don’t understand the distinction.  ESPN is a national sports channel, right?

JAMES MURDOCH:  This is a new one, and I think there’s plenty of room for more.  (Laughter.)

But I think it’s emblematic of the way we’ve always approached business, right, is that you must never overestimate the customers’ satisfaction with the status quo, right?

So you can’t sit there and say the customer is happy with ESPN.  That’s great.  They have a sports channel nationally.  They’re done.  The customer is never done, right?

ADAM LASHINSKY:  Fair enough.

JAMES MURDOCH:  The customer is never done.  And you have to go and say, I think I can make one better, I think I can make it more fun, I think I can do that.  So that’s really what we’re trying to accomplish, and we’re trying to accomplish that in a lot of places around the world.

So I think the sports business — and we’re probably the biggest — we could be wrong about this but at least our investors know that we’re clear, like we know what we’re doing — probably the biggest investor in sports in the world.  Our forward outlook, which I won’t give you a number, in terms of sports obligations is enormous, and it’s because we believe there’s nothing like it in the world to drive an audience in a marketplace, particularly that’s much more complex and confusing than it’s been in the past.

ADAM LASHINSKY:  On finances I was going to ask a slightly different question, which is what will the over — you tell me the number of period of years, whether it’s five or 10 or something like that I assume — what will be the investment required to get FOX Sports One going?

JAMES MURDOCH:  It’s not — I mean, we haven’t given a number.  It’s very manageable.  I mean, basically we’re taking — we have a big cable portfolio in the U.S., and we’re using some of our existing rights, et cetera.  We’ve bought a lot of new rights.

ADAM LASHINSKY:  You can resign in other words or you can —

JAMES MURDOCH:  We can invest a portion of our growth in our free — in our — of the growth in our free cash flow in our U.S. cable business and reinvest that in creating FOX Sports One and still be growing.

ADAM LASHINSKY:  Let me ask you another question.

JAMES MURDOCH:  So net it’s very manageable.

ADAM LASHINSKY:  Do you — internally do you overtly evoke the creation of the FOX broadcast network here?  Is it similar, it’s an analogous situation?  There were three powerful broadcast networks and you came and made a new one.

JAMES MURDOCH:  I think we invoke in our culture the fact that the — you know, we are the quintessential kind of — there’s a lot of talk today about founder-led companies, right?  I think we’re the quintessential founder-led company, right?  But what’s neat about it is my father, who founded the business, he makes us found new things all the time, right?  So it’s not enough to have one.  So if it was the newspaper business and then it was the UK business, and then it was FOX and the FOX network, and then it was STAR TV, which I had to run and turn around for a while, and then they founded BSkyB, and then Sky Italia, and then I had to do Sky Deutschland., that’s what we do, right?

So I think it’s not about invoking just the FOX network.  What we’ve tried to do, and we get it wrong in lots of places, we get tons of things really wrong, and we —

ADAM LASHINSKY:  I have a ton of admiration for the way you got the Daily wrong, for example, and I mean that completely sincerely.  You guys took a shot and it didn’t work.

JAMES MURDOCH:  If you don’t fail, you won’t try anything.  If you’re not willing to fail, you won’t try new things.

So we got the Daily wrong.  I mean, I can go through with you, it’s terrible.   You know, MySpace was wrong.  We’ve had launches in our businesses that you guys wouldn’t be aware of around a place where we get wrong.

But if you’re not — you know, if you become paralyzed by your failures, then you won’t grow and you won’t have big visions for the future.  And I think what you have to do is try to learn as best you can.  We’re probably less good at being reflective as we’d like to be, but I think actually in our gut we are pretty reflective about those things.  And you have to go on.

And I hear sometimes about other companies, and I say, why aren’t they looking at this thing or that thing, and someone says, well, they were really burned by X that happened a couple of years ago, right?  It could be a small thing, and probably I forgot about that.  But they didn’t forget.  And I think you have to in a way be able to forget, you have to move on.

And I think one of the key things that’s so important hopefully in success — you know, we hope, we’re trying to this one out — is just pure perseverance, right, just getting on with it.

I was talking with my wife and I heard this story that the single-most determining factor of a child’s future success is the child’s success in something called the marshmallow test, right, which is you put a three-year old in a room with a marshmallow and you tell the three-year old, “I’m going to leave the room now.  When I come back, if this marshmallow is still here you get another marshmallow.”  And the researcher leaves the room and they leave a video, right, going, and they come back.  And if the child has not eaten the marshmallow, he gets another marshmallow.  Many children eat the marshmallow.

Apparently this is the single biggest determinant, more than IQ, more than education, more than background —

ADAM LASHINSKY:  What, is it good or bad?

JAMES MURDOCH:  It’s good.  Willpower is everything, right?  And that’s what I mean about dealing with failures, right?  Perseverance is everything and I think in business there’s so many startups here, so many people working who have taken those risks.

I failed at my record business.  We had a great creative success.  We signed some great artists.  We’re very proud of what we did.  But it wasn’t a commercial great success, it was this tiny business.  My God, you learn so much failing.  You have to be willing to do it.

ADAM LASHINSKY:  I want to ask you about a marshmallow that’s still there, namely Hulu.  (Laughter.)  Why did you and your partners, 21st Century Fox and your partners decide to keep Hulu?

JAMES MURDOCH:  I think we always thought that Hulu — first of all, the management team at Hulu had done an incredible job building a great brand, getting a lot of customers on the free Hulu classic product, and I think really building a position here with a new way to consume kind of really first run, high quality network TV.  So that was the job done on that part, right?

But the question of the future of Hulu is really relevant, both in an environment where we saw, you know, sort of retailers, the cable companies, et cetera, really investing a lot and trying to achieve a different position with their customers, offering more value for them in TV everywhere and things like that.

And we weren’t necessarily — and it was written about — we weren’t necessarily aligned with our shareholders or management around strategy for the whole time.

Going through the process of the sale and actually looking at the different alternatives, as well as our own investment plans, what we found with Disney was actually we were much more aligned than we thought.  And that really took a lot of the impetus to sell the business out, because actually we were aligned and we had a vision for how we can continue to create the kind of programming that we want to create.  We want to see more competition out there in the SVOD marketplace.  We think Hulu can play a real role in an authenticated —

ADAM LASHINSKY:  I’m sorry, S5?


ADAM LASHINSKY:  Oh, got it, you said that earlier, yep.

JAMES MURDOCH:  Subscription video on-demand.

And we think it can be a business that plays a real role in sort of the authentication, kind of TV everywhere environment, which we have a lot of experience in, because our Sky businesses in Europe have been deploying TV everywhere solutions for customers, but for millions of customers for the last four years.  So we really feel like Hulu can be a part of that.

So at the end of the day we just decided, and it was quick, as soon as we realized between Disney and us that we were more aligned than we thought, that we were actually very aligned, it was very easy then to put the refinancing into the business, real risk capital to grow it faster and really invest in the business, and go forward.

So I think we were — you know, we’re very pleased with the outcome, even though I know it was an arduous process.

ADAM LASHINSKY:  Tangential question, you have a big investment in Roku.  Why?  What is it that you see in Roku?

JAMES MURDOCH:  First of all, it’s not a very big investment.

ADAM LASHINSKY:  I’m sorry, probably big from —

JAMES MURDOCH:  — but it’s a chunk of it.

Look, at the end of the day I think Roku — first of all, I think Anthony Wood is a great entrepreneur.


JAMES MURDOCH:  Yeah, I think he’s tremendous.  I think he’s a great engineer.  But mostly in Roku I saw a great customer experience.

ADAM LASHINSKY:  It’s a great customer experience.

JAMES MURDOCH:  And I think for me I come from a background of both the creative side of the TV side internationally, but then also very much a direct customer business.  At the Skys we sell telephony, broadband, TV, and we’re the call face of a customer’s and a family’s decision every day.

So I think we try to bring and I try to bring a kind of product focused and a customer focused approach to our industry here, which I think sometimes in the TV landscape in America can be a little bit too much focused on business rules, and we want to be more focused on the total end-to-end experience, the design of the customer experience totally.

I saw in Roku a great experience, and I thought the opportunity to help them grow and to be a part of that growth and deliver something really special for TV customers was great.  And that’s why we invested, and they continue to deliver.  And they’re also super scrappy kind of commercially, which I love to see.

ADAM LASHINSKY:  I want to leave the United States for a few minutes.  You mentioned earlier that News Corp and 21st Century Fox have largely disinvested from China.  Why?

JAMES MURDOCH:  Look, I think, you know, I’ve been — I was — when I was there for four years between the end of ’99, early, end of 2003, it was a really interesting shift.  We went from the end of the Jiang Zemin regime, right, which was liberalizing, trying to do all things, to a much more I think a timid approach to investment and to liberalization.  And we saw this shift from liberalization to marketization, which was a big shift that I don’t think a lot of people noticed enough.  And basically it became harder to do business there.

It’s always been hard for us in the business of ideas to do business in China.  That’s clear and a lot of people have those issues.  But I took a view very early on that we had a couple of investments.  Let’s help them grow, let’s see what we can, but we don’t want to get too overstretched here.

And of late, you know, they’ve been kind of minority positions because of the regulatory issues, and that really doesn’t gel with our view that we should be simplifying our business, we should be investing upstream, and so on and so forth, right?

So when you look at it and there’s value there, one of them was a publicly listed company, another one, and we just decided this probably isn’t worth doing, and the companies will be better off not having us ambivalent, and we’ll be better off.  We’ve made a great return.  They’re some of our best — you know, not the biggest investments but good investments.

And in the meantime in the 20 years we’ve been investing in Asia, you know, contrast what we’ve achieved in India, which is the largest media company in India, which is hugely successful financially and kind of from a popularity point of view.  We’re a big investor in original programming and original writing and content creation in India in nine different languages.  It’s a fundamentally different animal.

And I think each country’s attitude towards media, towards investment, towards job creation, towards what companies like us can bring tells you everything you need to know.  So we just decided that that was a better place to be.

And Southeast Asia is very exciting for us now as well, and particularly what we’re doing in sports in Southeast Asia, which is I think a big, big opportunity.

ADAM LASHINSKY:  So I want to leave time for questions from the floor.  I want to end in the UK where you made reference earlier to when you were the CEO of BSkyB.  You are largely credited with turning that company around with that company becoming very profitable under your leadership.

And then you didn’t have the greatest ending there.  You ended in this hacking scandal.  You’ve testified in front of Parliament.  You’ve answered —


ADAM LASHINSKY:  — oh yeah, twice — every question imaginable.

So I want to leave you with two.  One is, you know, you were on the cusp of acquiring the rest of BSkyB.  This was a major important strategy.  It doesn’t look like that’s going to happen anytime soon.

And so number one, are you committed to keeping the stake that you have?  And number two, what did you learn from the whole episode as a business leader, as a person, as an international businessman, et cetera?

JAMES MURDOCH:  Well, let me deal with the second part first, because I can go into kind of the business part.  But just personally, you know, you learn a lot going through a storm like that, a fire like that, right?  And somebody told me —

ADAM LASHINSKY:  I can’t imagine.

JAMES MURDOCH:  — somebody told me that when Winston Churchill, he had this thing where he said, “When you’re going through hell, keep moving, right?”  (Laughter.)

So, you know, a couple of things.  One is I think just on a baseline first of all I definitely learned that politics is a nasty business, and I would encourage anyone to read the HarperCollins book, part of News, if anyone has read the Hilary Mantel series about Thomas Cromwell —

ADAM LASHINSKY:  Yeah, I’ve read the first —

JAMES MURDOCH:  — and the second book is really particularly great about the prosecution of Anne Boleyn.  And you should really read it if you want to think about the intersection of politics and commerce and everything, right, because it was ever thus, and I really recommend it.  It was very helpful to me going through that.  (Laughter.)

The other thing that I learned, and I said it before, you know, is just more where just perseverance counts for everything.  I think that grit is really underrated, and when they think they have you and they don’t have you, you have them, right?  And I think you just have to — when you’re going through tough times, whatever it is, personal, business, political, whatever it is, I think grit is something that we often don’t think enough about, and we’ve got to find it in ourselves sometimes to do that.  Sometimes we have it, sometimes our families help us get it and find it, but we just have to — you know, that’s important.

So I learned a lot about myself and about that, but also about business and about how businesses do things wrong, and how businesses get things wrong, how they take some things for granted, and so on.  And we’ve really improved our companies, both companies now enormously, having gone through that process, and I think it’s really been an important process for us to really improve systems, governance, all of that sort of business.

So that’s number one.  On the business side, look, I think, you know, we have 40 percent of BSkyB. It’s a great company.  It’s got a great team within it.  We’ve worked with them for many, many years.  We founded the business 20-some odd years, 23, 24 years ago, and it continues to grow.

In the meantime, Sky Italia and Sky Deutschland have also been created.  They’re part of 21st century Fox, not part of BSkyB, they’re all separate.  And I think our strategy a number of years ago, which was to say, listen, we should consolidate these businesses, they should be part of one business or at least be one business, the industrial logic is still very much there for that, right?  And I’ve said it publicly, you know, there’s a bit of — that’s something we need to resolve.  We have no intention of bidding for the rest of BSkyB today or in the near future.  We have no plans about that.

ADAM LASHINSKY:  But you also have no plans to divest this?

JAMES MURDOCH:  And we have no plans to divest.

But I recognize, and I think it’s important, and I’ve spoken to a lot of our shareholders about this, it’s important for them to understand as well that we’re not complacent about this.   Clearly the status quo is not optimal, and we need to figure this out.  But I think over the next few years that’s what we have to do.  It’s a complicated question with reputation across Europe and also in the UK, as well as in terms of our own business strategy.  But we really believe in the Sky businesses, and we think they’re great companies.

ADAM LASHINSKY:  So if I hear you correctly, you’re not saying one day, come hell or high water, we are going to own 100 percent of that business.  You’re saying we certainly would like to, but if we come to the determination that we can’t, then we won’t.

JAMES MURDOCH:  Or we’d like to see them as one business somehow.

ADAM LASHINSKY:  Not necessarily under 21st Century Fox’s ownership.

JAMES MURDOCH:  But I couldn’t possibly say.

ADAM LASHINSKY:  I understand that.  (Laughter.)  I’m highly confident it’s the first time in Brainstorm TECH history that the era of Henry the VIII has been invoked in a conversation about business strategy and politics.

Questions from the floor before we have our entre?

JAMES MURDOCH:  Everyone is hungry.

ADAM LASHINSKY:  Yeah, I know, I know.  Well, see, I can’t see who it is — yes?  I think that’s Karen Cator in the green.  If we could get a mic to her quickly, please.

JAMES MURDOCH:  Sorry, it’s very hard to see —

ADAM LASHINSKY:  Yep, it is.

JAMES MURDOCH:  — with all the big strong lighting.

ADAM LASHINSKY:  So please identify yourself, explain who you are, even though I just said your name.

KAREN CATOR:  Hi.  Karen Cator.  I’m CEO of Digital Promise, which is focused on spurring innovation to improve education.

Curious about Amplify.  Are you at all involved?  Do you know anything about the education company that your father has invested in?

JAMES MURDOCH:  Yeah, no, I mean, we started — so Amplify is this education startup that’s part of the News Corporation, the publishing and education sort of business that’s been spun off, but we still — so I’m still involved.  I’m a director there.  But it’s a very exciting business.

We bought a business a number of years ago called Wireless Generation, which is an assessment business, which provides tools for schools to get in really and sort of digitally get a view of how students are performing against different modules, and really assess teachers, pupils, school environments, curricula, et cetera, in a way that’s in real time, and so school boards can look at this, and we thought that’s really exciting.

That became Amplify, which is now in curricula development as well as technology development.  So it’s very, very early days, but it is — I mean, there will be a lot more news about that over the next year as they roll out in various school systems.  I think there’s a school system in North Carolina that’s signed up for it, and there’s a number of school boards I think in California but don’t quote me on that.  I’m not close to the day-to-day.

But it’s pretty exciting, and I think the view was simply — and my father and Joel Klein who runs it, who was the chancellor of a school board in New York, their vision was that there’s been so much going in the world, there’s been so many things that have really improved; why is it that a schoolroom, a classroom still looks very much the same as it did 50 years ago, except you have lower teacher-student ratios, or better ones, and costing more money, but worse educational outcomes?  Can you apply — can an innovator, can a disruptive digital startup in the education space make a difference there and come from the private sector to come and do that?  That’s the question they’re asking, and I think all of us in this room and everywhere in the world probably have high hopes that lots of companies like that can make progress, because I think the schools need it.

ADAM LASHINSKY:  Folks, it has been communicated to me that we would very much like to serve you hot food rather than the other kind.  And so I think you will all agree what we’ve seen here is an executive who has already accomplished a lot and who we should expect to hear a lot more from in the future.

Please join me in thanking James Murdoch.  (Applause.)