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You might hate his politics, but you can't deny Rupert Murdoch's business genius

Rupert Murdoch.
Rupert Murdoch.
David Buchan/Getty Images

Rupert Murdoch is stepping down as CEO of 21st Century Fox, the media empire he has built over the past half-century. While most people today know Murdoch for his controversial politics, Murdoch's biggest impact was as a media innovator.

For decades, Murdoch was at the forefront of the media world's major trends. He was a pioneer in digital newspaper publishing, tabloid news, broadcasting, and cable and satellite television. In each of these media, he saw big opportunities and invested heavily (and in some cases waged bitter political fights) to build big and ultimately profitable business. Murdoch's repeated successes over more than four decades and on three continents makes him one of the most talented media executives of the 20th century.

Only in the past decade has Murdoch's business savvy begun to fail him. As the internet has become an increasingly important part of the media landscape, Murdoch has failed to come up with an effective strategy for capitalizing on it.

Murdoch was an aggressive and savvy newspaper mogul

Print unions picketing the News International print plant at Wapping after Rupert Murdoch had set up a non-unionized plant, 1986. (Michael Ward/Getty Images)

In the United States, people mostly think of Rupert Murdoch as the man behind the Fox television empire. But he got his start in the newspaper business before he jumped into other media.

Murdoch is a native of Australia, and his career as a media mogul began in 1952, when his father died and left 21-year-old Rupert a chain of Australian newspapers. The younger Murdoch proved to be a savvy businessman, and steadily built up his news empire in Australia. He launched the Australian, a national newspaper for Australia, in 1964.

He then made a jump to the United Kingdom, buying News of the World in 1968, the Sun in 1969, and the Times in 1981. To cut costs, Murdoch consolidated these newspapers' printing operations and began to shift the papers to new digital publishing technologies.

These changes ran afoul of existing labor rules, known as "Spanish practices," which led to a war with the industry's unions, who saw the changes as a threat to their jobs. The conflicts turned violent — according to the Guardian, 1,262 people were arrested, and 410 police were injured during months of demonstrations. But Murdoch prevailed, gaining a more flexible workforce and a more efficient printing process.

According to the Guardian, "many in the newspaper business — including some who criticized Murdoch at the time — now concede" that Murdoch's triumph "probably helped prolong the life of the British press by a good few decades."

Murdoch relied on sexual titillation and political outrage to build an audience

A cover of the Sun in 1998. (GERRY PENNY/AFP/Getty Images)

When Murdoch acquired the British newspaper the Sun, he soon inaugurated the "Page 3 girl," a photo of a topless woman that appeared inside the cover of almost every issue of the newspaper. Traditionalists were outraged, but the racy images helped make the Sun Britain's highest-circulation paper, a distinction it still holds today.

Other Murdoch properties have been equally willing to use racy content to boost circulation. The New York Post, which Murdoch acquired in 1976, has become famous for its sensationalistic headlines and focus on tawdry stories. The paper's most famous headline is probably "Headless body in topless bar," about a grisly 1983 incident in which a gunman forced a woman to decapitate the owner of the bar. (The author of that headline died on Tuesday.)

Murdoch's newspapers have also gotten a lot of mileage out of political controversies. For example, when Britain went to war against Argentina for control over the Falkland Islands in 1982, Murdoch's papers cheered on British Prime Minister Margaret Thatcher's aggressive posture in the conflict. Critics derided the Sun for its "xenophobic, bloody-minded, ruthless, often reckless, black-humoured and ultimately triumphalist" coverage. But the nationalistic coverage helped to boost the Sun's circulation.

Both traits — sexual titillation and jingoistic political coverage — are evident in one of Murdoch's most famous American ventures, Fox News. Fox News anchors like Bill O'Reilly and Sean Hannity play to the political prejudices of the network's conservative audiences with coverage that's often partisan and sensationalistic. At the same time, Fox News rarely misses an opportunity to broadcast images of scantily clad women.

Murdoch helped to break the stranglehold of television's "Big Three"

Married with Children was one of Fox's first hits. (Fox Network/Getty Images)

It's hard to believe today, but there was an era when most Americans had only three options for television content: NBC, ABC, and CBS. This was partly because the primitive technologies of the 1960s and 1970s made running a television network really expensive. And a variety of FCC regulations made it difficult for smaller networks to gain traction. In the early 1980s, it had been decades since someone had successfully launched a new television network in the United States.

In 1985, Murdoch acquired a string of six television stations in major markets that formed the core of the Fox television network. While the network struggled in its first few years, it soon began to thrive with hits such as Married with Children, The Simpsons, Cops, and America's Most Wanted.

Fox consolidated its status as a major network in 1993 when it signed a $1.58 billion deal to carry National Football League games, including the 1997 Super Bowl. The lure of football and some further acquisitions helped Murdoch build Fox into a truly national network. In the early 2000s, Fox became the leading television network among viewers in the coveted 18-to-49 demographic.

Murdoch saw the potential of satellite and cable television early

Fox News has succeeded by featuring conservative pundits such as Bill O'Reilly. (Peter Kramer/NBC/NBC NewsWire via Getty Images)

While the Fox broadcast station was a big success in its own right, in some ways it was just the warmup act to his big American television success: a line of Fox-branded cable channels. Cable television wasn't exactly a new concept in the 1990s, but Murdoch was savvy enough to recognize that the medium offered huge growth opportunities at that time.

Murdoch launched the FX ("Fox Extended") network in 1994, as well as a network of Fox-branded sports channels. Murdoch's greatest impact came with Fox News. While it bore the tagline "fair and balanced," critics charged that it was anything but, with a conservative slant that permeated its coverage. Still, the channel became a huge hit, attracting a loyal audience of mostly conservative viewers that appreciated its lively, often bombastic coverage.

Murdoch was also an early innovator in satellite television. He acquired a majority stake in the British satellite TV company Sky in 1983. Murdoch merged Sky with British Satellite Broadcasting in 1990 and turned it into the dominant force in the British satellite television business, with 11 million subscribers.

Murdoch has floundered in the internet era

Murdoch with Apple's Eddie Cue at the launch of the Daily in 2011. (Charles Eshelman/FilmMagic)

For three decades, Murdoch managed to anticipate and capitalize on shifting media technologies: digital printing, satellite television, and cable television. He built big, profitable companies for each medium. But he's never figured out how to do that for the internet.

His most ambitious effort was the Daily, an iPad app Murdoch launched in 2011. Murdoch spent tens of millions of dollars on the project, which had a staff of 170 people at its peak. But it was shuttered after less than two years in operation.

The Daily's basic problem was that it tried to reproduce the experience of a newspaper — in which consumers pay a subscription to access a bundle of daily content — at a time when internet news was becoming increasingly unbundled. Most people don't want to sit down and read the news cover to cover on an iPad app; they find news one article at a time using services like Facebook, Reddit, and Google News. The Daily walled itself off from the rest of the internet, and as a result, the rest of the internet mostly ignored it.