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Monday, 18 April 2005 04:40

Murdoch and Seek herald the end of print news

The past week has seen a couple of extraordinary events take place in the world of news media publishing. The two events, which concerned the irreversible decline in print news, took place on opposite sides of the world but both involved an Australian connection.

The first event was an address to a bevy of newspaper editors in the US by one of the world’s most powerful media magnates, Australian expatriate Rupert Murdoch. In that address, Murdoch issued what could very easily be construed as a veiled warning to his print media executives that the days of newspapers as we know them are fast coming to a close.  To use samples of Murdoch’s words, much of which was quoted from a report by the Carnegie Corporation: “Among major news sources, our beloved newspaper is the least likely to be the preferred choice for local, national or international news going forward…..consumers between the ages of 18-34 are increasingly using the web as their medium of choice for news consumption.”

Murdoch of course, still being in the newspaper business, went on to spout a few platitudes about how moving to tabloid from the ridiculously dated (our words) broadsheet format can help arrest the irresistible decline in circulations. He also eulogised about how print media should see the internet as an “opportunity” rather than a threat. He was not entirely clear about how exactly newspapers could avail themselves of this “opportunity” in order to stop themselves becoming redundant in a world of online instant digital news access. The point is, however, that in the space of a 3564 word speech, that must have sent chills down the collective spines of many of the newspaper editors in the free world, Rupert Murdoch issued a signal to the global media community. He finally gets what the digital revolution means for the future of print news industry. The days of denial are over. The news for news print ain’t good so to speak.

In contrast, on the sunny shores of Australia, last week we saw an indication that, for many in the news publishing industry, a culture of denial is still in force. The extraordinary attack on the upcoming Seek online jobs board IPO by John Fairfax is evidence of this. In a story that ran in its own publications, Fairfax admitted that its unfavourable analysis of the Seek float, produced in-house, was designed to reassure its staff that the publisher has a strong future.

However, what is one to think, when a traditional news print publisher of the size and reach of Fairfax goes out of its way to issue a public thumbs down on a much smaller competitor’s IPO? If Fairfax is so confident of its position in the jobs advertising space, why did it find it necessary to go out of its way to publicly rubbish a competitor?

Last week, we met with internet pioneer Vint Cerf, a man of advanced years. He made it clear that he liked reading newspapers – it was part of his lifestyle. However, he made the astute observation that it mattered little what people like him did because the future lay in the hands of the 13 to 20 year olds. For anyone who has read the Carnegie Report mentioned above, which contributed much of the sentiments quoted by Murdoch in his recent speech, cannot fail to see that young people are turning away from both newspapers and TV and toward the internet for their news and entertainment. Likewise, people are moving in droves to the internet to look for jobs, property and cars – the three biggest money spinners for traditional print classified advertising.

While the internet threat to print news has been likened to that once presented by both TV and radio. The comparison is not valid and the threat to print is far greater from the internet.  TV and radio are both push media and, thus, present at best an alternative to print news. The internet, on the other hand, is pull media, and thus a complete replacement news delivery solution to print.

The advantage that print has always held over push electronic media is that it enables consumers to access daily news presented to them at their leisure and in depth, with the added value of editorial comment and opinion. The internet not only negates this advantage but provides a far richer experience of interactivity, superior access and referencing capabilities and unsurpassable timeliness of news delivery. The internet enables users to access news from a huge variety of sources when they want to; it enables them to cross reference articles against previous stories written on the same topic; it enables them to check stories against those written by different sources with a different perspective;  it enables them to publish their own opinions and much more.

With the advent of true broadband, the internet is now moving beyond the boundaries of print news and into the world of multimedia news presentation. Webcasts, Podcasts, wireless internet access to news over mobile devices, blogging are just some of the phenomena contributing to an irreversible sea change in the news delivery paradigm in which print publications will have little if any part to play.

In the end, however, when it comes to news delivery, the ultimate argument against print is an economic one. In a world that has well and truly reached the zenith of an information age both technologically and culturally, news print has become an embarrassingly costly, wasteful and environmentally unfriendly industry. The number of trees felled to produce the billions of pages of newsprint each day, the energy required to produce the paper and run the printing presses, the chemicals for the inks, the fuel needed to operate the vehicles in the newsprint distribution network, plus other overheads all add up to a horrendously expensive supply chain.

In the pre-internet age, the high cost of print news production presented a huge barrier to entry to newcomers, enabling a relatively few well-connected players to establish monopolies. Like the Berlin Wall, the barrier has now come crashing down and a plethora of new players are emerging. The cost of delivering news and information to the world is now so low that even sole operators can get into the act, as is evidenced by the exploding blogging phenomenon.  It’s true that the big print media players still hold an edge over smaller internet operators in terms of news gathering resources. However, even that edge is being gradually eroded as print media the world over are being forced to pare down the size of their editorial teams in order to stay profitable in the face of declining circulations. There are few if any newspapers in the Western World actively hiring new journalists in large numbers. Many often do not replace journalists who leave and most are trying to do more with less on their editorial teams.

The lifeblood of print news, advertising, will of course provide a pointer to the future. The cost of advertising in major newspapers is a function of the cost of operating the newsprint supply chain and the circulation of the publications. As circulations continue to decline, there is downward pressure on what print publications can charge for advertising space and this in turn forces them to pare their costs. Having already optimised their supply chain through technology, the only costs left to pare are people and, of course, the most expensive people are journalists. Advertising in the online space, meanwhile, continues to grow, as does the traffic to online news sites.

All major print news organisations now have online sites. Some are actually quite good. However, all of the traditional newsprint organisations are still constrained by the baggage they carry with their huge investment in print infrastructure.  They still seem unsure of how they are to present the news and sell advertising online, without compromising the value of their print products. They find it difficult to compete with lean online players in both the advertising and editorial spaces that don’t come with the print baggage. Sooner or later they will be forced to write off their newsprint investments and compete with a plethora of interests from the electronic media, telecommunications carriers, search engine portals and even the blogging community for a slice on internet mindshare.

For some, it is hard to accept the idea that daily newspapers will soon no longer be with us. However, most baby boomers and older folk remember a time when cities like Melbourne and Sydney not only had a choice of two or three morning metropolitan newspapers each, they had numerous editions of afternoon and evening newspapers. The afternoon and evening papers are now but a distant memory. Before too long the morning newspapers will join them. Welcome to the world of online news.

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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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