I have had my doubts about Fairfax's overall strategy for some time and argued that they needed to make a decision – were they printers of newspapers, or did their value lie in the knowledge and insights of their journalistic content business?
At that time there were also plenty of discussions with the senior management on these issues, where I explained my future vision for the company and for the news media in general. We at Buddecom were pleasantly surprised by their knowledge of the digital media at that time. They had terrific people with great insights into the digital media, who shared my views on this and the need for a completely new and different business model for their digital media business.
So it certainly was not a lack of knowledge about this new industry that stopped them from entering the market in a more serious way. While not explicitly mentioned at that particular meeting it was clear that the underlying sentiment was to protect the ‘rivers of gold’ linked to their lucrative advertising revenues – and these, of course, were linked to their printed media.
There was no real urgency towards embracing new media and they were never serious about moving into the digital media market to any significant degree.
There were many excellent proposals accepted by the board. A typical scenario was: prepare a proposal (3-6 months); obtain board approval (2-3 months); initiate and execute a pilot (6-12 months); evaluate the pilot (3-6 months); shelve the idea as something that would be interesting to do later; then start with another proposal.
Another striking example of how wrong their priorities were was their focus on investment in their printing plants and a prestigious new head office in Sydney – opened with great fanfare and many dignitaries – while the trend in digital media was to move away from printing, and away from large corporate offices. Also around that time they sacked 300 journalists – they clearly had no clue about the overall future of their business.
One of the early suggestions we made was that the online version of the Sydney Morning Herald only be made available free of charge to subscribers to the printed version – when at a certain point these subscribers did not wish to continue with the printed version they would be more likely to continue their paid subscription, for which they would receive their online version.
I also argued that the online edition of the Australian Financial Review should be made available free of charge to existing subscribers. Later on I also pointed out the old-fashioned style of the online version of the AFR is not up to scratch. Sadly, this remains the case today.
So, Fairfax did make quite a few strategic mistakes the company has made; but this is a case where the company could have made the changes; and I should add had many people within the organisation that genuinely tried to make those changes to no avail.
Sadly, Fairfax is becoming another piece of road kill along the superhighway, alongside others such as music companies, retailers, Kodak, and Nokia. The message is the same every single time – trying to protect a dying business/industry is futile.