Media Headliner: Murdoch heir supplies Sky's broadband vision

industry's West End watering holes.

Pops (as James refers to him: he's known as plain old Rupert Murdoch to
the rest of us) had clearly become a fond and foolish old man, willing
to sacrifice solid business sense in his desperate determination to
perpetuate a family dynasty started by his father, Keith Murdoch. This
was not likely to be a story with a happy ending.

How they (both father and son) have proved us all wrong - and last
week's Sky Broadband initiative caps a satisfying three years for
Murdoch Junior, during which he has kept customer growth ticking over
nicely (under the circumstances, given the parallel growth of Freeview),
while also introducing premium products such as Sky+ and high-definition
TV.

James Murdoch hailed this latest departure as a "transformational new
initiative for Sky" and most observers agree - although there were
clearly pockets of nervousness in the City as the share price wobbled.
The transformation period will, after all, knock at least £400
million off Sky's profits before the new broadband service begins
breaking even, some time in 2009 or 2010.

But, along with last year's acquisition of Easynet, it positions BSkyB
as a truly convergent media company with interests straddling
programming content and delivery infrastructure. It also strikingly
underlines the company's brand positioning as a leader in technological
innovation.

All of which is forcing everyone to rewrite the earlier chapters of the
James Murdoch biography. Previously, the story was that, as the youngest
child of Rupert Murdoch's marriage to his second wife, Anna, James
managed to stay the corporate distance, where his elder siblings Lachlan
and Elisabeth had not, largely because he was more malleable to his
father's will.

Lachlan, in particular, had been groomed through the late 90s as
Rupert's successor as he rose through the ranks to become the deputy
chief operating officer of News Corp. But he was determined to be his
own man and clashed frequently with his father, not least over the
decision to relocate News Corp's headquarters from Sydney to New York.
Lachlan spent decreasing amounts of time in the New York office before
deciding to bow out altogether.

So if Lachlan was the heir, James, born 1 January 1973, was clearly the
spare. The old version of the story casts James as something of a
wastrel or a feckless dilettante, drifting in a dream world and prone to
passing fads and fancies - there's a story, probably apocryphal, of him
visiting Rome as a young man, clocking all the antiquities and deciding
on the spot he was going to be an archaeologist.

The anecdotes about James' formative years have built over the years
into a substantial mythology. For instance, his desire as a child, under
his mother's influence, to become a painter; or his first summer job,
aged 15, on the Sydney Mirror, where he fell asleep at a press
conference and the picture was splashed across the front page of the
competing Sydney Morning Herald.

Then came Harvard, where he studied visual entertainment, with a special
interest in puppet theatre, but spent most of his energies producing the
Harvard Lampoon satirical magazine. "More to do with drinking than
journalism," Rupert growled at the time, when he dropped by to monitor
the boy's progress. His spell on the title was best known for the
cartoon he contributed, Albrecht the Hun.

His parents were distraught when he dropped out of Harvard in 1995,
complete with surfer's bleach-blond hair, beard, grunge gear and an
eyebrow stud, to launch Rawkus, a hip-hop record label. Rupert reclaimed
his son by buying the label and installing him as head of News
Corporation's small music division.

The new version of the James Murdoch story takes some of this basic
material and puts a wholly different spin on it. Here is the classic
case of a young man getting all sorts of distractions out of his system
early on - and, thus cleansed, he has proved himself even more worthy of
high office.

The colourful past and somewhat unconventional present (few other
members of the world's business elite would number mountain biking and
karate among their interests) are now presented as evidence that he is
no dull corporate drone from the accountancy and business admin school
of management thinking.

But his credentials as a man with a vision are now established. And
perhaps we shouldn't be all that surprised that this vision embraces the
internet - he was, after all, placed in charge of News Corp's digital
media assets in 1997, shortly after Pops lured him back into the family
circle.

We tended to forget that important part of his track record; just as
some City analysts have always tended to discount his successful years
as the chief executive of Star, News Corp's Asian pay-TV service, in the
three years before he joined BSkyB.

And the launch of Sky Broadband proves that his vision has substance,
Robert Horler, the managing director of Diffiniti, argues. The big
players in the broadband market - BSkyB's direct competitors include BT,
AOL, Talk Talk and Orange - will spend the next couple of years
effectively buying market share, which they will become increasing
successful at monetising. That, in turn, will be good news for
advertisers.

Horler says: "It's going to offer a lot more choice for customers and it
will fuel (the growth in penetration of) broadband. Once Sky has secured
its broadband customer base, it will be offering multiple services to
consumers - and it will be offering packages to advertisers across all
the platforms it has. That will offer more integrated advertising
opportunities, which will come to represent very good value. The trick
will be to build critical mass - but, given Sky's track record and its
commitments to market it heavily, I'm sure that will be achieved."