Sunday, November 06, 2005

Why sacking journalists is dumb

I read this article from Crikey a couple of days ago and made a note to place it up on the blog. Got around to it today!

There's a couple of points before you read this article and your not from downunder.

The media down here is in the hands of a few people. Television is controlled by about three or four families, the newspaper business is run by around three. Two if you're looking at the big circulation cities. Rupert Murdoch's Newscorp has tabloid papers in each city, he also controls "The Australian" which is the national daily. Fairfax media has two broadsheet papers in the larger cities of Sydney and Melbourne.

The Newscorp tabloids are read by the working class in the western suburbs and a little more Murdoch-like...... right wing and shallow, the Fairfax broadsheets are more in the eastern suburbs and have a left-leaning style and go into a bit more depth. That's a broad sort of definition.

If you walked into a newsagent, you could propbably tell which area of Melbourne or Sydney you were in by the height of the respective Fairfax or Murdoch stack.

It looks as if Fairfax is looking to "dumb down" it's image a little and focus on entertainment as they try to find their niche in these internet vs news on paper times. That's a shame, The Sydney Morning herald gets cited regularly on the net as it sometimes covers stories that the usual media via AAP and Reuters doesn't cover. Another example I can think of is The Guardian in the UK, who maintains that fiercely independent spirit, not singing from the same song book that is written by a large media owner in charge.

nd talking rationalization, I can think of a similar example of an airline who went through a similar thinking process when they askied the question "What business are we in?", they decided they were in the "ticketing business" and then proceeded to flog off airplanes, pilots, terminals, aircraft maintenance operations and the like. From memory they went under pretty quickly.

Lets hope they don't head the same way at Fairfax.

Anyway here's the article from Crikey

Fairfax job cuts a dumb move

Media and telecommunications analyst Paul Budde writes

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.

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 models.

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 future.

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.


Post a Comment

<< Home