An excellent editorial in the Financial Review today on the structural change facing the media industry. A few interesting points are worthwhile highlighting.
1. News Corp's struggle with the internet: "News Corp has a successful record of diversification but has had an equivocal attitude to the internet, which it is now embracing at the local level. The Australian Financial Review, by contrast, has long recognised the value of placing its content behind a paywall, already uses the multi-platform production system now to be used at News, and has launched a best-of-breed tablet application. We also remain committed to delivering our news in the compact newspaper format we have always used."
2. News Corp is underwriting a non-viable business model that recent acquisitions will exacerbate: "The structural pressure imposed on the “old media” by the internet is forcing the removal of cross subsidies within large media companies for what have been valuable but loss-making mastheads. News Ltd was less forthcoming yesterday than Fairfax Media about job losses and the cross-subsidies needed, for example, to carry its historically multimillion-dollar loss- making newspaper, The Australian. These pressures will only intensify now the also unprofitable Business Spectator online publication has been purchased by News."
3. The ABC needs to take the business of "wealth creation" seriously (a brilliant point): "And the rising pressures on the commercial media mean there should be more questioning of why the taxpayer-funded ABC sees fit to duplicate services provided by the commercial media, such as diverting its reporters to air their views in a dedicated opinion outlet, when it should be more focused on the spirit of its charter to provide valuable information that otherwise may not be supplied. The national broadcaster surely ought to devote more resources to covering the business of wealth creation."
