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Like King Lear, the ageing Rupert Murdoch has split his kingdom. The difference is that he has taken the precaution of hanging on to the more important part. He keeps America as well as Australia, where it all started; but has bequeathed Europe and Asia to his younger son James, formerly chief executive of BSkyB.

These are momentous developments in the media world – not least because the move appears to mark the anointing of the younger Murdoch as the chosen dynastic heir.

James Murdoch’s apotheosis is a shot in the arm for black sheep everywhere. A decade ago, few would have put money on him stealing ahead of his more conservative brother, Lachlan, let alone garnering the corporate and political power he now wields.

A Harvard dropout, who went on to found a hip-hop label, he marked his rebellion with a beard and eyebrow stud. Yet this move puts him in charge of the most powerful newspaper group in Britain.

As chairman of BSkyB, he also controls the UK’s largest pay TV provider, and its fastest-growing broadband internet and telephone network. On paper, that makes him the most powerful opinion-former in the country. The slightly unnerving fact about James Murdoch is that he seems rather a good egg.

Impeccably green and instinctively liberal – and less likely than the old man to use pliant editors and politicians to further business interests – he’s his own man and, unlike his brother (who suffered from having Dad down the corridor and ended up retreating to Australia) he has wisely stayed an ocean away from Murdoch Sr.

But don’t underestimate his drive. At BSkyB he has shown his father’s willingness to worst opponents, take risks and invest aggressively.

Bored with Britain, wild about The Wall Street Journal – that’s the basic backdrop to the seismic changes Rupert Murdoch has just made to his organisation. At 76, he is now a senior citizen in a hurry: having achieved his dream of acquiring an international publishing franchise, he wants to focus on it. He has thus summoned his trustiest lieutenants to America to concentrate on slaying new dragons and outsourced Britain to James.

Yet it would be wrong to assume the latter will be a shoo-in for the top job when Rupert finally departs for the great newsroom in the sky. News Corp is not a dynasty: it is a publicly quoted company in which the Murdochs are minority shareholders. James might be the heir apparent, but he still needs to prove himself.

When Michael Grade joined ITV in January, he cast himself as “the industry godfather” whom viewers could believe in. Ten months on, his honeymoon period is over. When Grade commissioned Deloitte in March to probe serious lapses in the broadcaster’s premium-rate phone-ins, he cannot have realised the gravity of what would be uncovered.

Deloitte found that some £7.8m had been taken from viewers under false pretences, with perhaps the worst offender being Ant & Dec’s Saturday Night Takeaway, which invited viewers to text in and win the chance of riding the “Jiggy Pig” – a giant mechanical pig that spewed out cash. They weren’t told that only entrants living within an hour’s travel would be considered.

Asked in an interview for his definition of fraud, Grade replied that he couldn’t answer because he wasn’t a lawyer, but surely the systematic fleecing of viewers in a series of phone-in con-tricks comes close.

Yet, astonishingly, no one at ITV is to be sacked or suspended – even in the teeth of calls for a police investigation. At the very least, Grade is guilty of double standards. He didn’t hesitate to suspend the independent production house RDF following the “Crowngate affair” before an inquiry had even got underway, thereby wiping millions off its share price. Yet he now seems bent on overlooking serious abuses at ITV.

ITV and other parts of the television industry are in deep trouble, not because they are over commercialised, but because they are not commercialised enough. They want the money that comes from running a retail business, but haven’t taken on board the responsibility that goes with it.

Charles Allen, who headed ITV over the period of the scandal, came from a catering background. He wouldn’t have tolerated the systematic spitting in soup at Little Chef, or replacing Blue Nun with antifreeze. Yet, captured by the glitz of television, he sanctioned a culture in which contempt for the customer took hold. Grade’s feeble excuse that it was difficult to sack anyone because the blame is so widespread seems extraordinary: there was widespread blame at Enron, but it didn’t stop executives there from being prosecuted.

The problem may be Grade’s heritage: he comes from a great showbiz dynasty where the chaos behind the curtain was irrelevant so long as you put on a good show. The decision to invite the audience backstage changed all that. It’s no longer show business, it is just business, and it’s time TV executives wised up to the fact.

It was a spectacular business coup. Rupert Murdoch’s News Corp pocketed one of America’s best-respected newspapers, the Wall Street Journal, by paying top dollar – $5.6bn – to the Bancroft family for control of its parent company, Dow Jones. But the reaction in the land of capitalism red in tooth and claw has been decidedly sniffy.

The media tycoon’s name is synonymous in the city with dumbed-down and opinionated news – a reputation built upon the foundations of the tabloid New York Post and the Fox News cable channel.

In a posting on wsj.com, one reader in Minneapolis lamented: “The Journal will never be the same… Murdoch will turn it into another example of his legendarily low-brow offerings… The craven Bancroft family should slink away in shame.”

But is this deal really such a cause for concern. Dow Jones is about to be transferred from one close-knit family with an arcane equity structure to another. Plus, the Bancrofts were as motivated by money as the Murdochs: they agreed to switch their position from guardians to sellers of the family jewels as soon as News Corp offered to pay their $40m advisory fees.

What’s more, Murdoch clearly needs to retain the WSJ’s integrity and reputation. His attempt to prove there is an attractive business model for Dow Jones – by deploying the content it can provide across the print, television and internet outlets at his command – will be taking place amid intense scrutiny.

He has pledged to invest in Dow Jones’s digital operations, bolster the WSJ’s Washington bureau and use his formidable resources to invigorate the paper in Europe and Asia, markets in which Dow Jones has made heavy cuts in recent years.

For many, Murdoch is a threat to the whole American journalistic tradition – a barbarian at the gates indeed. But the truth is that he is much more like America’s great newspaper proprietors than his critics imagine. He has printers ink in his veins – and perhaps more importantly, he is investing in the newspaper business at a time when others are heading for the hills.

Perhaps, New Yorkers will learn to love him yet.

Many disputes in the City are thrashed out behind closed doors. Not so the ongoing war between Virgin Media and BskyB.

Three million Virgin customers awoke to find their favourite Sky shows, including Lost, 24, and The Simpsons, had disappeared – the latest victims in the struggle between Sir Richard Branson and the Murdoch clan. Yet from the point of view of the average viewer, the inconvenience of that particular skirmish pales in comparison to the scandal unravelling elsewhere in the industry.

It centres on the widespread abuse of premium-rate phone-lines, now so serious that an industry-wide regulatory probe is under way. ITV has suspended all its interactive competitions and quizzes, and mothballed its dedicated quiz channel, ITV Play, until further notice.

The row is rapidly becoming known as “the cash for no questions” affair. Even the industry’s most trusted brands are embroiled. The investigation was sparked by reports that Richard & Judy’s You Say We Pay quiz on Channel 4 had encouraged viewers to call in at £1 a throw, after potential winners had been picked. It turned out to be just the tip of the iceberg.

The list of rip off phone-lines includes shows across most terrestrial channels, such as X Factor, Ant & Dec’s Takeaway and the BBC’s Saturday Kitchen. A massive swiz has been uncovered and our trust well and truly breached.

Sir Alistair Graham, who heads the phone-line watchdog Icstis, says he believes the debacle may be “more cock-up than conspiracy”. Yet some of the more glaring examples would seem to undermine that view. Many of the charges, if proven, are tantamount to fraud. One quiz, which asked viewers to name items found in a woman’s handbag, required the answers “balaclava” and “Rawlplugs”.

Eckoh, the group that runs many of the call services, is pointing the finger at broadcasters, claiming it warned of potential problems. Meanwhile the costs to the industry are mounting. ITV alone expected to generate £30m from participation programming this year, but the loss of that is nothing to the financial risks the network faces if this PR disaster continues.

Chairman Michael Grade has correctly decided to cut his losses by coming out with his hands up. Other TV networks are merrily giving their phone-in shows a clean bill of health. We suggest they look more closely.