Rupert Murdoch, CEO of News Corporation, appeared before the US Federal Trade Commission’s Workshop: From Town Crier to Bloggers: How Will Journalism Survive the Internet Age? on Tuesday. His speech contains information which could be of interest to newsagents facing a decision as to whether to accept the new News Limited contracts.
Here is some of what Rupert Murdoch had to say to the FTC:
First up, on the trust between consumer and a newspaper:
From the beginning, newspapers have prospered for one reason: the trust that comes from representing their readers’ interests and giving them the news that’s important to them. That means covering the communities where they live … exposing government or business corruption … and standing up to the rich and powerful.
And on the future of newspapers:
The same is true with newspapers. More and more, our readers are using different technologies to access our papers during different parts of the day. For example, they might read some of their Wall Street Journal on their blackberries while commuting into the office … read it on the computer when they arrive … and read it on a larger and clearer e-reader wherever they may be.
Later, he adds:
I have often made the point about newspapers this way: by reminding people that we are in the news business, not the dead tree business. In other words, what makes a newspaper is its content and brand – not necessarily the form in which it is delivered.
He outlines the principles for the new world:
- Let news organizations innovate to give their customers the news they want, when they want it, and how they want it.
- Ask consumers to pay for the products they consume. Let aggregators desist – and start employing their own journalists.
- And ask the government to use its powers to ensure the most innovative companies are free to reach new customers instead of looking for ways to prop up failures or intervene in a constitutionally sensitive business sector.
I’d make several observations on this. Newsagents are distressed at the challenge of their individual small businesses negotiating with a global corporation on a contract which many see as the reason for their existence. News Limited has denied newsagents the opportunity to charge consumers fairly for the services they provide. Successive Governments in Australia have ignored calls by newsagents to give them genuine freedom in structuring their businesses around newspaper distribution in ways which are appropriate to their communities.
Looking at Rupert Murdoch’s speech more broadly, News Corp. is rightly positioning itself for the next generation channel. This will not be print, certainly not to the extent that it has been in the past. It is therefore, in my view, open to newsagents to decide the timing of their move out of newspaper print distribution . The contract on offer today is two years (one year in South Australia) for a reason. Newsagents need to understand that and not expect anything beyond this period.
Australian Newsagents ought to study this and other speeches by Rupert Murdoch and add them into the mix when considering what to do about the contracts.
“And ask the government to use its powers to ensure the most innovative companies are free to reach new customers instead of looking for ways to prop up failures or intervene in a constitutionally sensitive business sector”
Hmmmm, like AusPost (the former)? Or the migration of newspapers to supermarkets etc (the latter)?
On the other hand, the issues facing newsagents in recent years in terms of the nature of our core business changing are highlighted right there. As far as Rupey’s concerned, the writing is very much on the wall regarding partnerships with newsagencies.
What I glean from this is, basically, that newsagents should expect much more of the same inequitable behaviour from the likes of News.
I dont think it would be fair for the government to become involved in this debate, they havent since the late 90’s wanted to know anything about it, why step in now to protect a multinational who has its own interests at heart. Surely Mr Murdoch should be comfortable lying in the bed he made should he?
With the demise of print media (oh how quickly this appears to be coming) will come the demise of the traditional ‘newsagent’ as non-print (digital) media will not require ‘agents’ to distribute. Sound like science fiction but it’s closer in that publisher’s mind than we think.
NEWSPAPERS will b arouind for many more generations, but the key role (home delivery) for newsagents will change to publisher based or depot distribution. The newsagent is now the retailer. In many cases we will relinquish or distribution of media newsprint. The future is an up-scalled retailer as a franchised regional outlet. If we reform and trade as well as petrol based roadhouses, 7eleven, aldi, office works and general convenience retailers we will prosper. BUT! I doubt if our retail industry has the smarts to put this life changing structure together in the timeframe that now confronts us. We have wasted the last 2 decades on outdated systems and failed industry organisations that we focused only on retaining the past.
Robert Allen
I believe that your indentification of the problem is in fact outdated.
There are 3 ways that newspaper or shall I say News transmission can occur to reach the reader.
1. Casual sales i.e. retail
2. Home delivery through a distributor 9usually the newsagent0 in the Country- Mail.
3. Internet or electronic resources. T.V. Radio. Google Blogs or other means Kindle Sony reading devices.
As one grows or should I say passes the other options will be clearer. The publisherMurdoch, Fairfax Stokes whomever will favour the passive path.
Retail newsapapers and maybe home delivered (over the fence papers) could all be free of cover price.
Who knows? Mr Murdoch may know the trend, after all he is in the bos seat of all the statstistics to help. Howver it is crucial to his business to graduate public “shift” to mininse harm. Timing will depend upon when this is right.
Unfortunately we do not know any of this His timing could be our downfal, it may well be that we get an amount to deliver the “free” newspaper – the one with all the adverts in it- or it maybe that we “give away free newspapers in our stores.
Rupert probably doesen’t probably know when this may happen or even if it will go exactly this way so he issues a contract to all newsagents that keep ALL OPTIONS OPEN.
That’s what you’ve got
NOW LET’S SEE SOME HEALTHY DISCUSSION ON WHAT ARE YOU GOING TO DO – FOR THIS IS THE ISSUE!
The rest is over.
Bob, I disagree with you, newspapers (the paper kind) will not be around for generations.
Graeme, comments here have plenty of examples of newsagents reengineering their businesses with success. Our future is up to us. The less we rely on a small group of suppliers the better.
Print product will become botique within ten years. Home delivery will never grow again. Publisher / consumer engagement will grow through online and portable devices. Newsagents are not part of this model. Read this and other speeches from Rupert Murdoch.
Mark, My concern is for the industry and the contracts now on issue.
Retail is a specialist field and one I address profesionally with bpanalysis (business performance analysis) which amomngst other performance reports specialises in space allocation and return per sq metre of sales and profits for newagencies. You are aware of this as I have talked with you on the subject many times.
This is not about that. This is about the contracts and those many, many newsagents who’e livelihood is derived from those very contracts. Yes believe it or not their are a lot of profitable deliveries and deliveries that support the retali shop and ones that represent additional profits when the newsagent does the delivery himself. This is the bulk of the investment within this industry known as Newsagencies.
Yor work and continuance to beat the retail alternative drum is great and very much appreciated by all that you shine a light to, however as I said I have that covered and there is no alternative anyway, is to try and extend a link to the newsagents that are heavily committed to the income from these contracts, not to mention the debt exposure they have securitised with lending authorities.
Remember in most states there used to be at least two daily papers. When Rupert decided to close the “News” in SA it was never announced – it was presented as a fait accompli and that is how he always does things. He probably knows the date that he is going to stop the presses but he is not going to shout that from the rooftops while he is putting his other options in place. Distribution of a daily newspaper is dying (not slowly either). The cut will come sooner rather than later and distribution depots and the good people who thought they were doing a good thing for their future will be the biggest losers. It is called commercial risk and it has been around for a very long time.
Doesn’t mean it’s right but it will happen anyway with
enormous ramifications for many agents and others who are involved in our industry.