Friday, February 03, 2012

Rinehart, the media & technological change

Gina Rinehart is Australia's wealthiest person, with an estimated net worth of $A10.3 bilWilcox on Rinehartlion based on the iron ore interests created by her father. She is presently involved in  a court case with some of her children over control of a family trust.

  A suppression order has been in place preventing reporting of the details. Now court action over the suppression order itself has revealed some details.

Reading Louise Hall's story on this in the Sydney Morning Herald left me feeling rather sad.  The Wilcox cartoon is from that story. As is so often the case, the dispute is about money, with the suppression order linked to fears over security. I quote:

The NSW Supreme Court was told a risk assessment of the family by an international security firm, Control Risks, found reporting of the legal dispute over control of the multibillion-dollar family trust would increase the likelihood of abduction and kidnap for ransom, robbery, protest and harassment from ''criminals, deranged individuals and issue-motivated groups''.

Ms Rinehart's dislike of publicity is well known. For that reason, her foray into the Australian media starting with Channel Ten and now her purchase of a 10 per cent interest in Fairfax Media raised some eyebrows. Now in a piece in the ABC's The Drum by Alan Kohler provides an interesting personal perspective. Mr Kohler worked at one point for Ms Rinehart's father.

While the personal observations were interesting, I was more interested in Alan Kohler's perspective on Fairfax Media itself. I quote:   

As for buying 235 million Fairfax shares at 81.8 cents as an investment - it's a Roulette play, in my view.

Either CEO Greg Hywood pulls it off and Fairfax makes a profitable transition to being a digital company, or he doesn't and the company goes back into receivership and shareholders lose everything. There isn't any middle ground, in my view.

And even if he does pull it off, the stock is unlikely to be a short-term ten-bagger: there are far better speculative plays in the industry Gina Rinehart knows best.

The digital transition for all traditional media companies is more about survival than riches. It's about figuring out how to go from high margins to low margins, not the other way around.

I mentioned in an earlier post that my train reading at present was Rod Kirkpatrick's Country Conscience: A History of the New South Wales Provincial Press 1841-1995. One of the things that I found interesting in that book was the way in which changes in technology have so affected the newspaper press over such a long period.

I am still getting my mind around some of this because I want to build those changes and their effects into my historical writing, and I need to be able to explain things simply.

I have indicated before that I don't necessarily share current pessimism about the future of newspapers, although I agree that people have yet to define a business model that works in the internet age. Having some sense of history is actually quite helpful in considering current media puzzles.

As human beings, we are hard wired towards stability. We need this at a personal level. So when changes take place in what we see as the natural order of things, there is a sense of shock.

The role, organisation and indeed style of the newspaper press has varied greatly over the last 150 years. Take an apparently simple thing, the writing. This has actually changed quite considerably reflecting technology, economic circumstances and the patterns of human life.

As an example, consider the headline. Today this may stretch across columns, even dominate a whole page. This type of headline wasn't possible in the past. The printing technology made it difficult.

Or consider the use of short sentences and paragraphs with the most important point placed first. Newsprint was in short supply during the Second World War, leading to cuts in the size of papers. This required compression in writing and forced changes in the way that stories were written. This wasn't the only reason, but it did contribute to longer term change.

So the latest changes are just another step in a continuing change process. Whether they will in fact be as dramatic as some past changes remains to be seen.       

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