When Einstein laid out the groundwork for Quantum Physics in the early 1900’s everyone was amazed at his theories, but soon after everyone was asking, but how can it be used and how is this applicable to anyone’s lives? What a waste of taxpayers money being spent on this science stuff! The answer from scientists was put simply that they did not really know what practical use this would bring!
Today Quantum Physics drives around about 50% of all the GDP of western economies, with computers, satellites, mobile devices and the Internet all not possible without the early Quantum work done by Faraday, Bohr, Einstein and Planck.
Fast forward to today and we have seen some of the largest companies in the world turned on their ears by the Internet. Think about this in 2000 we had never heard of Google, Facebook, Twitter and the like, yet today they are an integral part of just about every person and company in the western world, even Apple was an afterthought!
Today these companies not only shape our lives and the people we connect with, but they are also shaping governments and countries around the world! Technology and innovation now drives economies.
News Ltd and Fairfax
So we now come at the cross roads for many incumbent digital and media companies. Many will fall and we will see a rise in new players across the spectrum. The latest being News Ltd and Fairfax as they struggle with diminished revenues from print.
Much of the blame is currently directed at the boardrooms, and yes, the people who sit in these rooms and make strategic decisions for their companies must accept some of the blame – but not all, it was inevitable that they would lose revenues from print. In hindsight, Fairfax today really should be sitting pretty controlling online what jobs are advertised, who rents/buys what home, trades what car and who is selling their bric-a-brac, but for the most part Fairfax have come up short.
News Ltd pretty much control the online housing market, but they will know that they need to continually innovate to stay on top. The message is clear, don’t get comfortable!
What can Fairfax do?
Cost cutting is obviously an idea, especially in areas where they know they cannot come back. However one thing Fairfax doesn’t have is a Black Ops Tech Division and every media company today should have one. Why? Because most of them do not have money in the bank to just buy great ideas these days.
This Black Ops Tech Division must be funded with enough capital to create a team of around 20 people across the globe, and their mantra would be to develop awesome new ideas, tools, apps which are not restricted or constrained in any way. They are to be given 12 months to come up with a starter set of killer web and mobile apps, ones that may even have an impact on revenues from current services.
The idea is a simple and cost effective one. You cannot tell me the money they spent on Trade Me could not have been used all of those years ago to come up with bigger global solutions.
Fairfax have to think local/global. Yes the ideas must work locally, but they also should work on a global scale.
If Fairfax do this they can be saved, cost cutting and streamlining will only save them for a few years. They need new ideas and new markets and with billions of income waiting out their for them, they would be crazy and possibly negligent not to.
Technology and innovation have only touched the surface, there are people out there today creating amazing ideas and applications that will power new economies, think big or go home!
What Fairfax Need
Well for one thing, they do not need a business person for this division, they do not even need them in an office, they just need someone to head the division that can put together a team around the world that can deliver these tools and make them work on a global scale. The thinking must work on desktop and mobile! This person would be an ideas person, he or she would have a project manager and PA and the rest of the team would be made up of designers and developers finitely skilled in certain areas.
You cant hire these people full time, these are the best of the best in what they do, most people who are available for hire are just not good enough! So you hand pick experience and skills and contract them to perform tasks around a full project!
Start Dreaming Big Fairfax!
Companies like Fairfax cannot afford to buy companies the scale of Trade Me anymore, they must innovate themselves! The idea that they do not have the money for this division is ridiculous, it is something they can no longer afford not to have, it will be the make or break of the company – period! Start dreaming big Fairfax and get out of this rut through innovation and ideas.
Your time is now!
9 Comments
Greg Vincent
So true Peter! Great vid 🙂
“It is a terrible thing to see and have no vision.” Helen Keller
Fairfax & News have amazing platforms for launching innovative products because they already have lots of eyeballs.
I get that depth products like Highlight from REA, are designed to get a larger share of wallet but agents are getting sick & tired of playing the ‘Fight for Supremacy Game’.
Manish
Great Read Peter and I couldn’t agree more.
They were in control and they have lost control over the years.
It is not too late for them to come back.
The Point of think Global is the best part. In not very near future Internet Companies can operate any where from the world and the wages and profits and competition will get even tougher.
Hiring available staff is also not cut of this challenge. Definitely need the most innovative heads with tens of years of experience, to lead this unit.
It will be Quality, Vision and Leadership that will define the Internet World. Fairfax and Australia have all they need, All It needs is just the step in the right direction.
Manish Khanna
Business2sell.com
Robert Simeon
So true – Peter
However, Fairfax have never really understood (News are not that much better) the machinations of online. It is treated as aside not a core business. The problems that remain are completely cocooned within senior management and like a fish – it dies from the head!
The sooner they come to the realisation that they are no longer a newspaper rather a media organisation only then will the bow start to turn in the right direction. Newspapers will not exist in five years time – at best we will have just a Saturday and Sunday newspaper. Midweek papers will no longer cease to happen – when will they get this trough their thick skulls.
You mentioned – “Think about this in 2000 we had never heard of Google, Facebook, Twitter and the like, yet today they are an integral part of just about every person and company in the western world, even Apple was an afterthought!
Well I will give you another – Apple’s total sales in 2011 were $128 billion which is more than the gross domestic product of about 160 nations around the world.
With interest watch the Apple June Quarter sales given this quarter was when the iPad 3 was released – I predict the sales will be through the roof and setting another record quarter.
vic Del Vecchio
American Rail Roads omitted to redefine itself with the advent of road transport and went broke. The thought of themselves as being in the railroad business when in fact they were in the TRANSPORT business.
Unless Fairfax starts from a point of redifining its purpose in life, it too will go broke.
Interesting times ahead.
Peter Ricci
Thanks guys. I still think the major mastheads have a role. good quality journalism is so important for a democracy. I do however see a day when these newspapers are free to buy, if they can work hard on getting distribution costs down, major advertisers would love the extra spread of readers.
Remember, most people still travel to work, love a coffee break and there is something special about holding and reading a quality newspaper, that online cannot hope to match.
I think Fairfax have got to become a global player in many areas, but thinking local at its core and then spreading with global media solutions!
A Newspaper, Online Community TV Network, A TED Style Innovation Foundation and a great Global Media/Software Company is all within their grasps without the need for massive investments.
Simon Baker
Peter
Interesting article.
Fairfax should have owned all three classified verticals online. They made a play for seek, carsales and realestate.com.au in the late 1990’s / 2000. F2 (Fairfax Digital) had real deals on the table with each of these players but in an attempt to squeeze too much out of the deal, lost each of them. How much they must regret their aggressive approach to trying to buy these businesses when each was sub $100m in total value.
News was taking a different approach. They were not looking at acquiring but building. The problem was they didn’t have the skills back in 2000. They invested in CareerOne (where is that now?), CarsGuide (see CareerOne) and even had Homesonline (for real estate). They even decided to take on eBay with GoFish.com.au. They were never going to succeed in the online space in Australia with this approach.
Finally News had to be cajoled into investing into realestate.com.au (now the REA Group). The deal to invest $2.25m in cash and $8m in marketing for 44% should have been a simple decision however it was not. After weeks of convincing, one of the key reasons that got the deal over the line (internally) for News to invest was that they could up load ads from the internet to their papers – of course that never happened. I even remember the then COO of News Limited telling me that realestate.com.au was not a real business. Ouch! I know – i did the deal for News to invest into realestate.com.au. Now of course their stake is worth over $1 bn.
So the bottom line is that the News’ and Fairfax’s of the world have only themselves to blame. As they say, a fish rots from the head!
Simon Baker
Peter Ricci
Hi Simon
Thanks for this insight. Of course way back when I can only imagine the boards of each of these companies not accepting what they were being told, especially when their respective revenues were so high during this time from their traditional businesses.
It is still not acceptable that they were like this, but it is understandable. However, when in business and when warned by so many, you would at least hedge your bets and say, well, we want to be number one everywhere where there is a threat.
The early days of the Internet for traditional media were all about protecting their traditional businesses and unfortunately that took the form of legal action in so many cases (music, movies, tv)
Then they moved on to the hedging era, still not understanding the threats of the internet. Today some are still in protective mode, and look where that gets them. The ones that are going to win, will win through innovation and a severe concentration on users and their behavior.
The teenage to 40 year olds are lost for traditional media unless they understand their behavior and not try to change it, but embrace it. I still think Fairfax has a massive future, but the board down needs to understand this is a user world in these mediums.
PayWalls I believe are again a protective measure, they can be an innovative measure, but only if what is behind them is of enormous value.
My theory is simple, innovate, innovate and think local/global and build businesses from within, move away from buying businesses that cost more than 20 million!
If you want to see innovation at work go to http://www.kickstarter.com
Robert Simeon
I was amazed to hear Fairfax Media using News Ltd’s ‘pay wall’ strategy as being successful. Well the UV’s have dropped by half so that would significantly reduce the advertising revenues. Firewalls remind be of Julia Gillard’s failed boat policy – just do nothing and look for another distraction. News have been attacking the credibility of the ABC to provide quality journalism (remember the ABC’s website will always be free).
Then again you can simply go to: http://news.google.com.au/?ar=1340679228
Hey presto – you just successfully navigated past all those nasty ‘paywalls’ . The question still remains to media outlets – “now what part of this don’t you understand?”
gold price
With school holidays now over, a somewhat minute increase in stock levels which is actually a positive indication of where Mosman property prices are headed. Our market is consolidating and tightening. When you have the cash rate significantly dropping and property markets consolidating, it means that real estate prices have bottomed. Our markets won’t be doing hand stands, nor booming, for that matter.