There is no doubt that the media industry is going through some very
serious changes and that to date John Fairfax has not been very
successful in finding a good position from which to move into the
converging markets of media and internet/telecoms.
In my analyses of the newspaper market in the past I have argued for a
strategic review of these media companies. They will have to decide
what they are – content providers or printers. It has been clear for
many years that customers are changing their attitude towards gathering
and processing news and information.
This is partly to do with the commercialisation of the media. In order
to increase the share price news media now operate less as objective
news suppliers and more as entertainers. This has led to a dumbing down
of the media, which has produced an environment of mediocrity. The once
proud image of the media has been undermined by this process and by a
concentration of monopolistic domination in the media industry. This
has made readers cynical about the information delivered to them.
With less vigilance being placed on the independence of the media,
readers began to drift away – and, more importantly, new (young)
readers are not emerging. Given the lack of good quality information,
news and open discussion, and the sensational form in which the
official news bulletins are delivered, there is now not much different
between them and the entertaining popular news and information shows on
TV that have been growing in popularity, especially among the 25
to 35 year olds.
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Apart from these alternative programs, other more specialised or
in-depth news and information can be gathered from the internet,
according to the customer’s own choice of favourite
journalist/newspaper. While this is an excellent development, finding
the right news and distributing it is a daunting task that is not
undertaken by many. This offers a great business opportunity for
quality news media.
Newspapers will have to review their structural arrangements and I
believe that their added value is in content and not in printing
presses. A structural separation is needed and the content business
should be media-independent – in other words, news and information
should be provided in whatever format the customer fancies (and is
willing to pay for). This will most likely be a combination of text,
video and audio – in other words, internet, broadband TV and podcasts.
My advice to many media companies has been to train their journalists
to be multimedia journalists. The journalist should be able to generate
a text article from an interview, also put the interview (or a summary)
on video and make audio versions available as well. A range of other
services can be built around the news sites, including a dissemination
of overseas news.
Newspapers should offer different services to different customers,
based on what the customer is interested in – niche market segmentation
to such an extent that journalists can interact with their readers.
Personal briefings from expert journalists and other services should be
developed around this concept.
The actual distribution of these services can be outsourced to the
appropriate infrastructure providers (printers, internet companies,
broadband TV, mobile services, etc). There is no need for media
companies to own these infrastructures and it certainly is not
appropriate to own only one of these sources, the printing presses. The
old newspaper model hinders these media companies from becoming truly
infrastructure independent and selecting the right distribution model
for the right customers.
By sacking journalists rather than outsourcing the printing, John
Fairfax is cutting into its core business and endangering its future.
Instead the company should show less interest in printed media services
and look at how it can make structural changes to free itself up and
allow itself more open-minded consideration of alternative business
I recognise that the company has been looking at new models, but this
has been done in an ad hoc, add-on kind of way. This needs to become
its core business model and newspapers – which are currently declining
as a business segment – should be an element of this. Now I would be
the last one to say that this will be easy, but I am convinced that the
future of companies such as John Fairfax lies in content and not in
presses and I believe they should start working seriously towards a new
John Fairfax is a quality media company and it will be that quality
that secures its future position in the new media. Anybody can
deliver mediocre products and there are plenty of them already; however
quality products are going to be at a premium – they will be sought
after by customers. Permission-based marketing models, based on
one-to-one advertising, can support this model and will also offer an
excellent new product for advertisers.
Quality is needed, not just in the actual content but also in the
intellectual skills necessary to effectively select news and
information, package it and deliver it to customers. Only media
organisations of high standing will be trusted by the customers to do
this for them and I can see a very clear spot for John Fairfax here. It
hurts to see this first-rate company going downhill. Drastic action is
needed to turn this around and making severe cuts to its core business
(its journalists) is, in my opinion, the wrong way to go about it.
Read more on budde.com here.