Tuesday, June 02, 2009

Train Reading - E Lloyd Sommerlad's Serving the Country Press

In yesterday's post, More on the obsession of writing - and personal obsession, I mentioned that I had been reading E Lloyd Sommerlad's Serving the Country Press. Country Press Association of NSW 1900-2000 (Country Press Association of NSW Inc, Castle Hill 2000).

I read the book for personal reasons, as a source for one thread within the history of New England. However, it was also interesting for professional reasons.

Just at present, the future of the print media is the subject of much discussion. Can papers survive in their present form? Mr Murdoch, for one, doubts it. The continuing drift of population away from many country areas is also a topic of discussion, and not just in Australia.

This book is the story of an industry association. Yes, the Country Press Association was more than this, but it is its role as an industry association that dominates. This plus the time span of the book, a full one hundred years, means that it is actually a history of the changing form of an industry sector seen through the prism of its association.

The story begins with hundreds of individual newspaper businesses. It ends with the country press in NSW dominated by two large chains, Rural Press and APN, with only a small independent newspaper rump. It is clear that the Association itself only survived through support from Rural Press, something that almost certainly created problems for APN and made its support for the Association very uncertain.

The story begins at a time when the newspapers were also individual printeries, making as much if not more money from printing as compared to publishing. By the end, the printing of newspapers had become centralised. Printing itself remains important for some of the independents, many of the independents and frees were in fact established by printers, but for the chains the location of physical production depends upon network economics.

One thing that stood out as I looked back over the one hundred years was the impact of constant change. The longest period of what we can loosely call business stability was probably the fifteen or so years from the early 1950s to the late 1960s, and even then there were local events such as droughts.

As independent businesses. country newspapers were affected by local conditions, by economic conditions in their market area. They were also affected by broader trends over which they had little control.

In 1900, the sector was weak and fragmented. The important metropolitan and then national advertising was effectively controlled by the metro dailies pushing into the regions and by advertising agents who played off local papers, many country towns had more than one paper, forcing them to accept supplements or to discount advertising rates.

Perhaps the single most important thing the Association did in economic or business terms was the creation of cooperative commercial mechanisms that gave the individual newspapers a collective economic power. This was never perfect, but it was still effective in attracting national advertising and raising rates. There was constant experimentation. This included the first commercial press clipping service, subsequently sold and now known as Media Monitors.

All this would be regarded in current terms as anti-competitive behaviour and indeed the introduction of the Trade Practices Act had a significant negative effect on the Association and its members.

Whatever the generalised arguments for competition policy, it does tend to benefit the big over the small. The reason for this is simple. One hundred small independent newspapers cannot combine to set rates or to enforce cooperative action. That's anti-competitive. However, if those newspapers are owned by a single company, then it can set rates and enforce common action to its heart's content. That's competition.

Don't get me wrong. I support competition policy. It's just that I am conscious of the dreadful irony that laws and policies designed to encourage competition among the big actually have the result of reinforcing the position of the big as compared to the small.

Nor is this the only case where actions by Government or other big players worked to the disadvantage of the small. However, I am out of time for the present and will have to pick up the story a little later.     


Bob Q said...

On competition policy, yes but...

The big guys can outcompete the little guys, fact of life and all that. Always has been that way, actually, cf. evolution.

However, the littlest guys in the equation are the consumer, not the corner store, and they often end up truly benefiting.

Unless they suddenly take it into their heads to obsess about Resch's Pilsener, of course. :):):)

There are many sides to the competition argument, and I certainly don't have a fixed position. It's horses for courses, I guess. that metaphor brings me to the other argument in favour of competition policy, which is that it saves having a policy of Government picking winners.

We can have that argument another day. I don't want to derail the central thread of your piece which is fascinating.

Jim Belshaw said...

I still love my Resch's P, Bob! The remarkable thing about some of the reading I have been doing is the way small survived despite the odds.

I am glad that you find the central thread interesting. I will continue, but its all about choices and the system.

Kanani said...

I've been following the unraveling of newspapers over here. The fall out has been major --scores of jobs lost, with the interesting result of seasoned journalists and editors hitting the streets and competing for the same jobs as freelancers now. A lot of the people I knew at the LA Times are gone.

Anyway, Warren Buffett has a negative outlook on newspapers as well. I think Berkshire Hathaway owns one, and he sees no end in the losses.

Sad, because newspaper organizations are the only ones who traditionally send reporters to world events. It seems the pool of reporting is shrinking --much to our detriment, I'm afraid.

Jim Belshaw said...

It is sad, Kanani, and is much to our detriment. To this point, the decline has not been as bad in Australia. One reason given is our newsagency distribution system, making it very easy to buy papers.