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Panpa Bulletin : July 2010
DESPITE economic convulsions and the possibility of a "double-dip" GFC -- something I have anticipated for some time -- newspaper revenues worldwide seem to be recovering. In the Asia-Pacific, the problems may have not been severe but in the northern hemisphere results have been catastrophic. So what can Asia-Pacific publishers learn from the experience of those in Europe and America? A major issue is how newspapers collectively compete against broader threats from other media. A newspaper may be dominant in its market but it is no longer big enough to operate as a competitive environment in itself. It is not enough to say newspapers are being engulfed by digital entrants. They are also engulfed by regulatory control, which in most markets inhib- its them from competing fairly. Why is it, for example, that Micro- soft is allowed to control 90 per cent of the world's computers, perhaps in ways that none of us understand; yet Trinity Mirror -- which takes three per cent of the UK communications industry, and Gannett, which is less than 1 per cent of the US equivalent -- are not allowed to sneeze without a government enquiry. Everywhere you look -- whether the society is free or controlled -- the answer is the same: paranoia. This does not mean to say news- papers should not be a lot better at collectively dealing with their market situation and emerging competition. There are few markets where news- papers are truly competitive. The exceptions are the UK, Japan, and Australia, which all feature a range of strong national competitors. But in most countries, particularly the US and Germany, the industry is dominated by local players, whose newspapers have no print competi- tion and challenge other media for advertising dollars. In France, where I live, around three-quarters of all newspaper pub- lishers are locally focused. This issue of competition relates more to how our industry responds to the ever-widening range of media alternatives - new entrants and substi- tutes - than other newspapers. In Japan, newspapers are working hard to control their audiences, by blocking links, and forcing consum- ers to go directly to their sites. While in the short-term it appears to be protecting their print circulations, it is not, and will not, attract the next generation of media consumers, who are seeking a more open range of media sources. When it comes to competing in tomorrow's world, newspapers have far more to gain by working together whether with or against the new generation of digital media. Obvious industry strategies should be: A collective, single, vertical solution for each category of classified. A shared industry search solution that covers all news sources, in a single experience. • • (I've long been of the view that it is better to work with Google than not, but in reality the quality of the Google search can still be greatly im- proved upon, in terms of clarity and granularity. How much better to have an authoritative single source that includes all the key media players, as well as granulated access to citizen and organisational opinion?) A joint public service aggregator, comprising all important public sector information, again with cred- ibility and granularity. These are issues of competitive product advantage but there are also issues of industrial operational advantage. If one loosely examines the value chain process of media: Gather. Pack- age. Distribute. Market -- then, two issues come to mind. The first is that the value chain proc- ess is increasingly consumer-driven. Digital media enables consumers to edit and repackage from a wider range of sources. The general trend of consumers taking control can only accelerate. The second is where the value lies in this of activity chain. It lies at the extremes -- gathering and marketing. At the start of the chain, it is in terms of content creation and interpretation. • This largely sets the product values of the service, and therefore the brand credentials. At the other extreme lies customer knowledge and control. Today, business control lies around who owns and understands customers. In the middle of the chain, there is little competitive advantage. Printed newspapers have long understood that they are better off sharing distri- bution (unless paranoid government puts a stop to it), and more recently printing. Imagine if we all decided to have our own digital network! But pub- lishers need to learn to work closer together in the distribution part of the value chain, because this is where they can gain competitive advantage against the real enemy, and maximise revenue opportunities. Google and Yahoo! are masters at the latter end of the value chain. But they don't actively operate at the front end. We newspaper people must simply get better at understand- ing where the competitive advantage and value lies, and get better at work- ing together to realise them both. Imagine if every time you searched for news you were taken to single news marketplace? Now that just might make the enemies paranoid. Know thy enemy www.panpa.org.au Kylie Davis Chief of staff of the Sun-Herald newspaper in Sydney Did you miss it? Italians swoop in for icon ONE of Italy's prominent media compa- nies, Gruppo Editoriale L'Espresso, is eval- uating a possible offer for a take-over of the French icon, Le Monde. The company that owns Le Monde has a debt of €100 million. Other interested possible bidders are Spain's Prisa, which already holds 15 per cent of the paper, plus France's Nouvel Observateur, and a Swiss group, Ringier. Deliverer shot A NEWSPAPER deliverer carrying a pro- vincial US publication, the Lexington Herald-Leader, has been shot while on his round. Herald-Leader vice president of circulation Nelson Fonticiella said this was the first time in his seven years at the company that a deliverer had been shot on the job. Apparently, he had had an ar- gument with two men, one of whom shot him in the back. Fairfax closes NZ paper FAIRFAX Media is closing The Independent newspaper, choosing to utilise editorial re- sources across its business sections online and in print. Fairfax, which has owned the paper, founded in 1992, since 2004, has decided it makes strategic sense to put The Independent content in front of a bigger audience through Stuff's business website, www.businessday.co.nz Press freedom win THE Zimbabwean government will issue licences for four new dailies in an apparent win for press freedom for the African coun- try. One title to be licensed, Daily News, was banned in 2002. Opinion Our conflict addiction When it comes to competing in tomorrow's world, newspapers have far more to gain by working together" " | JULY 2010 Chisholm Publishers must learn how to work together to grow the industry JOURNALISTS are probably the worst people to have a conflict with. We have a cultural history of gathering our facts -- sometimes aggressively -- storing them up, collating and crafting them for maximum impact and lobbing them (literally) over people's front fences. We wait for the reaction with glee, before going through the whole process again -- either in response to what our last drama created, or to find another issue to expose. It is why, as a general rule, great journalists make terrible business managers. We're addicted to the drama, we want to change things NOW or die, nobly trying, and take the government with us as we go. We love the politics of corporations because it's where the story and interest is, and it's what we understand. It takes a long time for many journalists to understand that engaging in the political is not the best way to get things done in any business, even their own. And that while the strength of journalism is exposing and highlighting weaknesses, the strength of a good executive is in counter intuitive processes of building up an organisation against resistance, reinforcing the positive and overcoming challenges by working through them. The trauma that managers of "normal" departments, such as sales and marketing, feel when dealing with their editorial teams was referred to many times during the recent INMA Congress in New York. Roger Dunbar, the vice president of business development and marketing at The Globe and Mail in Toronto, Canada, gave an entire presentation on how trying to get teams of editors and editorial managers to trust the science of research when it came to understanding their readers had led him to several years of psychotherapy. We hoped he was joking but the groans and laughs he got from many in the room showed he wasn't alone. Later, on site at the New York Times, the vice president of Advertising Sales, Todd Haskell laughed uproariously when asked whether there was any conflict between editorial and sales teams. "We have what I think is most politely called 'robust debate'," he admitted. "But it is necessary because we have to push the envelope, so we're always exploring new ground." Mr Haskell did admit, however, that because of the frequency of the discussions, the two departments had now managed to "play nice". "The publisher doesn't have to adjudicate or make the decisions any more," he said. "Good conflict" is necessary in every business, according to an article by US academics Amason, Hochwarter, Thompson and Harrison. (Conflict: An important dimension in successful management teams, Organisational Dynamics, 1995) They argue there are two types of conflict -- A-Type conflict which is "affective conflict" -- aggressive and angry, harmful, based on personalised disagreements and this detrimentally affects team performance. And there is C-Type conflict -- "creative conflict" which encourages innovative thinking and can actually improve the decision-making process. "A-type conflict fosters cynicism, distrust and avoidance," the academics write. The response to A-Type is either fight or flight, but neither of these responses fosters good business. Successful teams, however, use conflict to their advantage to arouse discussion and stimulate creative thinking. The focus is on ideas, issues and challenges -- not personality or power. "Effective teams know how to manage conflict so that it makes a positive contribution." As newspaper companies search out strategies to grow into the future of multiple platform publishing, there is always going to be conflict -- between editorial and advertising, between print and online. It's part of the terrain as we struggle to work out the best way forward and grow our revenue without selling out our values. The "trick" is not to avoid it -- the research shows that avoiders are even less effective than warriors -- nor appeal to an independent adjudicator so that one side should dominate. As an industry, it's probably time we learned to thrash out the issues with an eye to the bigger picture, kiss and make up at the end, and never go to sleep on an argument. Good conflict ... robust debate between editorial and advertising is necessary to push the envelope and explore new ground Jim Chisholm is an independent media consultant, based in France. He can be contacted at firstname.lastname@example.org