There was something hauntingly familiar about Rupert Murdoch's declaration that News Corporation was "on the cusp of a digital dynasty".
Back in the late 1980s, one of the major assignments of my then consulting team was to model trends in the global communications environment for Telecom Corporate Strategy. Our focus was qualitative rather than quantitative, the definition of key trends and their interaction with each other.
To do this, we analysed the corporate strategies of a large number of major players across the computing, media, pay TV, communications and film sectors, drawing conclusions as to how all this might fit together. Our conclusions on the equipment side have not stood the test of time, but we actually got the services and content side pretty right.
This was the period during which Mr Murdoch was making the decisions that would determine the future shape of the News' empire. To list just a few:
- 1983 News International acquires 80% of Satellite Television UK for one pound plus debts. Renamed Sky Channel in January 1984,
- May 1985. Murdoch and Marvin Davis announce intention to develop a network of independent US TV stations as a fourth marketing force
- July 1985 Murdoch acquires 50% of the parent company for 20th Century Fox
- 1989 Sky launches Sky New in the UK as Europe's first 24 hour news channel.
- 1990 Sky and rival British Satellite Broadcasting Co merge to form BSkyB.
Even from these few dates, you can see the Murdoch strategy of acquisition of control over content and distribution. There were some pretty gutsy decisions here in commercial terms, and indeed some observers doubted that News could survive.
Rupert Murdoch is still following the same strategy as before, control content and distribution. However, it is not clear to me that News is in fact on the "cusp of a digital dynasty", at least so far as the new media is concerned.
The acquisition of the Wall Street Journal and the subsequent migration of some of its content through other parts of the Empire fits with the content/distribution model. However, the MySpace acquisition was far more problematic because it took News into a new and far more unstable space, one in which the company had limited experience. I wasn't quite sure how it fitted with the traditional Murdoch approach.
We all recognise that the conventional newspapers are under some threat. A discussion with my own editor captured one part of this threat rather neatly.
When I asked him why my columns were not on line, he said that he wanted people to buy and read the newspaper! Apart from the implied compliment, his point was that on-line content could cannibalise the print audience.
Accepting that I am not as familiar with strategic issues in the media area as I once was, quite a bit of the discussion around the print media and its interface with on-line world makes me uncomfortable. I just have the feeling that it's missing the point.
I think that part of my discomfort lies in a feeling that people may simply be analysing the market place in too simplistic a fashion. Take, as an example, the Armidale Express or Rural Press's other regional outlets.
My editor is quite right to worry about cannibalisation. However, I would argue he also risks conflating newspaper audience and the web audience. The two overlap, but are not the same.
For every person now living in Armidale, there are more than ten people living outside Armidale who have some connection with the place. The total number of University of New England graduates alone exceeds the city's current population by a factor of at least three. I don't think that it's impossible to develop a web strategy that effectively segments the marketplace into two, protecting the print paper while reaching out to a broader audience.
I have used the Express as an example because I find it helpful always to test general thoughts with specific examples. It also points to the need to distinguish between general trends and those linked to specific organisations or outlets.
The decline in the print media does appear to be a broad trend, although it is less pronounced in Australia in general, less pronounced still in regional Australia. I have argued before that this reflects in part Australia's better newspaper distribution system.
People's discretionary time is limited, the competition for that time ever increasing. This is, I think, the core reason why paper sales have declined, why paper numbers have diminished. I used to buy two, even three, newspapers per day. I no longer have the time to read them.
Yet while this broad trend is there, the actual position of newspapers varies greatly and needs to be taken into account.
A particular problem here is that the modes of thought involved in running a conventional media business - TV as well as print - can create real blinkers on original thought.
Take, as an example, the Packer controlled Channel Nine web site. Being rude, this is a web site designed by people who think that a thirty second sound grab is news, that only the sensational sells. This is TV thinking, but doesn't work very well on a web site where you not only want to attract people in, but also hold them for a little while.
The one real source of content, the old Bulletin, was not only not integrated into the Nine site, but was also closed without any attempt to extract value from its content. I doubt that's a mistake Mr Murdoch would have made.
Time to finish this particular muse. I will probably come back to these issues in a later post because they still fascinate me.
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