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Peter Smith had just received the phone call that would bring him to the top position. Regulators had approved his purchase of a controlling share in Direct TV’s satellite service. Our reporter Kate Harvey interviewed the News Corp. Chairman in his Los Angeles office on September 30, just hours before the official announcement.
How does it feel to finally get the deal?
I’m very happy, of course, but it would have been better if it were a few years ago, otherwise cable wouldn’t have made those investments and would have been more vulnerable.
How are you going to win customers away from cable?
To a certain extent, we’re just going to give better service — cable and satellite both have had reputations for service — and if we want to get customers, we’d better have someone on the phone in 30 seconds rather than 20 minutes. And we will be investing a lot in research and development to get the most advanced technology for our set-top boxes and to get a lot of more interactivity.
Will you be giving set-top boxes for free?
Well, Jack Lonergan, Echo Star Communications Corp. Chairman, is already giving away some of the boxes. We will be matching him. But if we are manufacturing boxes with more features than he is giving, then we will charge something. But we will be subsidizing to the extent that he does.
Do you intend to undercut cable’s prices to start a price war?
We are not going into a price war with anyone.  But overall, digital satellite today is getting about $54 a month per customer, and cable is averaging about $66 at the moment. People want digital offerings, because cable is just too expensive.
What about broadband? Cable offers it; satellite can’t.
I am inclined to think that broadband will be a commodity. I am not sure about that, but it’s certainly physically possible to get first-class broadband service by satellite.
People genuinely seem to fear you. Why is that?
Ah, "the crazy people who will change the world". This company has always been a stimulus for change — Fox News is a stimulus for change, BSKYB was. Someone told me that there Were two crazy people in the media business — Ted Turner and me — and now there is only one. And that’s not a bad thing to keep people guessing.
Still, in Britain, you forced MTV to lower its rates for your BSKYB service. Will you force US programmers to lower their rates to get carried on Direct TV?
I hope to have a good relation and compromise. But they want give us more and more channels — and charge us for them. So if they want us to carry one of their channels, they have to promise it will get an audience.
You have said you would use sports as battering ram. Will Fox TV or the Fox Sports Network bid against ESPN for Sunday Night NEL football when it comes up in 2006?
It is too early to say. I would be happy to leave things as they are. but the NFL may try to do something with cable to expand their revenues. To try to take on ESPN would be too expensive. I am not committing myself, but at current prices we are to keep what we have.
Your sons, Lachlan and James. are both in top jobs, Who will succeed you?
They will both learn and develop. And my daughter may be coming back into the company. But the board will decide. I won’t be around. I’ll probably drop dead on the job.