The end is nigh for print media

Stan Beer
Thursday, 04 November 2004 17:16

IT Industry - Development

The news that ASX listed products and services provider McPherson's Limited has sold off its telephone directories printing business for $16 million to its main competitor in that space, PMP, should come as no surprise to anyone who is remotely aware of technology trends.

McPherson's is a diversified company and it wanted to get out of the print business – especially the telephone directory business. It had half of the Telstra White and Yellow pages directories contract which runs to 2009. Although this was seemingly money for jam for the next five years, McPherson's stated quite frankly that the future is uncertain after the contract expires and it would rather sell its contract to its competitor now, get out while the getting is good and put the money elsewhere.

Why? Because it will be a miracle if those millions of ridiculous monstrosities we call telephone directories that land on our doorstep with a thud each year will be around for much longer. By the time we get them, they're often months out of date. They cost a large fortune to produce and a small fortune to advertise in. In our house, when they arrive, we no longer even bother to break the shrink wrap, we turf them straight into the recycling bin. I f we want to find a phone number we either look it up on the internet or dial information. If you can't find the business you're looking for through Yellow Pages online, then chances are Google or another search engine will point you in the right direction.

The reason telephone directories still exist in print form today is that enough people still use them for Telstra to still make money from them. The minute that stops – and some time between now and 2009 is a fair bet – say good bye to hardcopy and hello to exclusively online directories.

Now let's take this scenario and apply it to the news print media. I don't exactly remember the last time I bought a newspaper – and I write for them! I remember reading an article about two years ago quoting the world's greatest investor Warren Buffett. According to Buffett, who from memory owns a large share of the Washington Post, he has not read a newspaper in years. He said he would often read stories on newspaper websites the day they appeared in print, so why would he want to pay money for a messy wad of news print to read yesterday's news?

Advertisers have started to cotton onto the fact that, in the US, publications like the New York Times and The Washington Post are getting millions of visitors each month. What's more it is far easier to track the effectiveness of an ad in an online environment than in print. The news print publishers know this of course and are scared to death. They have billions tied up in their legacy print empires, which can't simply be discarded. So in many cases, they're in denial.

To give you an example, I submitted this quite interesting story some time ago to a print publication and it was rejected. I was continually told that there was no space for it. The fact that the story was about a survey which indicated that ICT jobs advertising had all but disappeared from the print media, while online ICT jobs advertising was booming, had nothing to do it with it of course. There was just no space for it. One can hardly blame the print publishers for taking this attitude. After all, no-one wants to admit publicly that their best days are over and that all they have to look forward to is a slow and painful death.

Thus, we return to the statement of McPherson's chief executive, when explaining his decision to sell off the printing subsidiary, he said words to the effect that future of the Telstra's business beyond 2009 was uncertain. Well we would have to disagree. In our view, the future for the print media business, whether directories or news, is quite certain – there is no future.