Killing Fairfax, or making it unwell

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I think when a person is swimming in a river of gold it is not possible to even contemplate that the flow might end. Why spoil the enjoyment. Many of the board members and Executives of the Fairfax group over the last 10 years are still in the boards and management of many other companies and institutions. Probably companies which investors should keep away from.

Your overview is fine, Alan. However, a bit bland. It makes it seem that the Packers and Murdochs had the foresight to beat Fairfax. Perhaps being pernickity, as head of The Age at the time, you missed the opportunity to purchase and lead the market by applying its model to all classifieds. began before all of the powerful incumbents - SEEK didn't start until 1999 and Carsales later. began in 1993 before the Internet browser was launched. It is a relatively unknown missionary story of garnering support from the real estate industry and setting the online classifieds model globally. (It had thousands of subscribing agencies way before the US's began). began later and was as good as dead before News and Macquarie gave it a $2M life-line, marketing power and a corporate structure. It eventually purchased its competitor and aggregated the market by something-like doubling overnight. News in fact, had a JV with in the early days when online listings were printed in The Sun. However, like you, the Murdochs (or like you at Fairfax, their CEO Julian Clarke) didn't see the greater opportunity either. Sure, Fairfax and News seem culpable but at least News bought their way out of it. The day Robert Gottliebson wrote a BRW editorial about PMP's purchase of Showmega being important for type components, we thought was going to eventually provide access to Murdoch's backing. But they still didn't get it. The Packers and Murdochs are good at investing in existing businesses. However, it's actually a story that is being re-run all-over the World today as retailers, news creators, PC makers, car companies etc still work within traditonal M&A cultures and can't address the need for innovation from within groaning legacy structures. They were heady days but there are always great opportunities. (Check-out Clay Christensen's "The Innovator's Dilemma") - (I enjoy your "Family Business" section very much :)

The Australian media industry - from print to broadcasting - just cannot seem to grasp the golden rule that applies to any business. It's the product!

I am one of the millions who have virtually switched off listening to Commercial TV stations - I can't be bothered with wasting time watching hundreds of adverts. I cannot enjoy a programme interrupted so frequently. On screen adverts and announcements in programmes ruin the programme being watched. As for the selection of programmes it seems a choice between reality shows and watching really boring Americans killing each other - at this rate it is surprising there are any left. How the Hell did murder get to be entertainment? Gun culture is boring.

The newspapers all have magazine sections that seem to be set on a different planet to any I have visited so far. This planet seems to be full of poncey overpriced restaurants, poncey overpriced furniture and poncey overpriced clothes - you get the picture. Why would I pay to read about poncey anything? - or boring articles about spoilt brats that have grown up into people I'm supposed to admire and recognise as far more worthy than my own family? - dear oh dear.

If I want entertainment these days I go to the internet and watch it all without adverts. For news I can get a far greater variety of columnists than the ageing relics the newspapers here generally offer

In many ways my family is pretty average with our own house and our own small business, we live in a capital city, have a son who went to private school and university. But the papers don't seem relevant to us - and that is the problem and why I don't buy them. They are irrelevant to ordinary people who they insult with a barrage of right wing ideology. Why would I buy a propaganda sheet?

Australian newspapers do not seem to be about improving MY life instead of admiring other peoples - and they effectively insult me page after page. I'd rather read the overseas papers online - or buy their overseas editions - even struggle through foreign languge papers. Maybe the people who run newspapers and TV networks need to change their pub and listen to some real people. If they are worried about infection they could wear face masks and wash their hands afterwards.

If I were to give them one other tip it would be use a totally independent News Agency as your news source - one that itself does not mix opinion with news reporting. As for the present one, sell it to someone else.

If I may add one more thought to this excellent article - Murdoch led the trend for on-line fess for news, starting with the Wall Street Journal and then he tried it in his Australian papers. Fairfax has followed, and so on, and the revenue gained has been disappointing. There are just too many alternative sources for news that are 'free to air' - but the net result of driving away viewers who read their paper 'for free' also deprives the paid advertisers of the distribution and exposure to those who would otherwise view these ads.
I'm in America, and I've been reviewing real estate ads in Sydney - to deny me the access that I want deprives the paying advertiser of exposure to me as a potential buyer. This is counter-productive for both the advertiser and the reader.
Two years ago I watched Murdoch being interviewed and he gave the newspaper business 12 years.

The fundamental change for newspapers happened well before the advent of the likes of Carsales. Before the advent of the Internet, newspapers acted as the distribution medium for advertising. What the newspapers did not observe with the rise of the Internet was that their control over distribution had been taken away. Together with that, the regular spend of subscribers on newspapers had gone to ISPs. Newspapers were only left with the advertising revenue. The advent of online specialist advertisers like Carsales sealed the deal. Their existence only became possible because the newspapers' control over distribution was removed.

Allan you are spot on in that " the fundamental thing that happened, ........................, was that journalism and classified advertising became decoupled ". And it is exactly because of this that Fairfax needs to break up and set free assets such as and RSVP so they can grow and prosper. The fact that this isn't being I suspect has more to do with the board of directors looking after themselves rather that their shareholders.

Great article and insight and good pick from the article Michael.

...and let's not forget BS and other media are "two way" interactive communication systems, a huge difference from a printed media.

Thanks Alan, interesting piece. Do you think Mr Packer and Mr Murdoch had lunch on an "early spring day" as well circa 2011 to mark the 10 year anniversary of the collapse of One.Tel? Swing and roundabouts, I guess. And who now is killing the Ten Network?

Yes, spot-on, Michael! 40% of Domain if it's worth $650MM = $260MM in cash! (when Alan reckons all of Fairfax is currently only worth approx $1.2B) - to buy some more e-entities (using a new M&A arm also removed from their current culture and structure).