Media must adapt: News chairman

8Aug07

Source: Richard Gluyas, The Australian

DRAMATIC changes in the news cycle and the advent of social networking websites such as MySpace meant newspaper companies had to completely reinvent themselves, News Limited chairman and chief executive John Hartigan said yesterday.

Mr Hartigan said the challenge for traditional media was to spread its brands and become part of the online scene, where consumers wanted to be part of the process and not just passive receivers of content.

"Customers are contributing their own content, and the line between the traditional content producers and consumers starts to blur," he told the annual Pacific Area Newspaper Publishers Association conference in Melbourne.

"We are moving from a speech to a conversation."

Mr Hartigan said the extension of print brands on to other media platforms reflected the arrival of a 24/7 news cycle that was changing the industry dynamics "forever".

The trend was for consumers to be alerted to news on their mobiles, told about it in more detail on the internet, see it on television and then rely on print to explain it and give it context.

The internet, though, had also produced a new phase of media — the "connected" phase, or social media, he said.

Sites such as MySpace, owned by News Corporation (publisher of The Australian), Facebook and YouTube created interconnected communities.

With 100 million videos a day streamed on YouTube and more than four million members of MySpace in Australia, there were "considerable opportunities to boost a brand".

Mr Hartigan urged the nation to embrace the entrepreneurial nature of online businesses, conceding that, with companies such as search engine Google and MySpace founded by 20-somethings, older generations may not be "up to the non-linear media world".

He said he recently attended a meeting of News Corporation digital executives in California. "Rupert Murdoch said: ‘You probably think I’m too old for this; well I think you’re all too old’," Mr Hartigan said. "I would like to think this is not entirely the case, but …"

News Limited, like Fairfax Media with its acquisition of the integrated auction and social networking site TradeMe, has been investing significantly in digital media.

But Mr Hartigan said the bulk of News Limited’s investment continued to be in print, with the launch of new magazines and newspaper inserts, as well as the installation of printing presses and editorial operations in Sydney, Melbourne, Adelaide, Brisbane, the Gold Coast and Tasmania.

He warned against writing off the power of print. A recent PricewaterhouseCoopers report, for example, estimated that total newspaper advertising revenue in 2007 would be $3.9 billion — the biggest slice of the advertising pie.

Revenue was set to grow again next year, albeit at a slower rate, he said.

The print sector of newspapers, magazines and books was also expected to top $5 billion in advertising revenue in 2008, equivalent to more than 40 per cent of media and entertainment advertising. And next year, the nation would spend more than $4 billion on printed products, or one-third of spending on all media.

"Newspapers are far from dead, and certainly not, as one could argue, in trouble," Mr Hartigan said.

The need to adapt, though, was exemplified in the steady erosion of newspaper readership among 15- to 24-year-olds. Only 20 per cent of that age category read newspapers, down significantly from 65 per cent in 1972.

One of the flip-sides was the critical role played by social media in the US presidential election campaign. Campaigns were being run online through blogs, candidates were collecting funds through sites such as Facebook and Hillary Clinton had announced her candidacy online.

Popularity: 1%