Fairfax throws its baby off the train

Fairfax will struggle to find a better digital opportunity than Trade Me. But as digital advertising outstrips print for the first time in 2013, the necessary task of self-cannibalisation is fraught for big, listed media companies.

"Trying to define digital versus traditional media is difficult and maybe it’s useless because it’s all merging into one,” he said.

Yes, but where it’s all merging is on screens of varying sizes – and increasingly it’s the small ones that fit into your pocket, not on pieces of paper.

Right now most traditional print businesses believe their salvation lies in paywalls – charging subscriptions for content rather than giving it away for free and hoping that digital advertising revenue is enough (which it hasn’t been so far). But that is a fraught and risky strategy.

One print company that is making a successful transition is Atlantic Media Company, which publishes The Atlantic magazine in the US.

Its president, Justin Smith, gave an interview to The New York Times in 2010 explaining how he did it. "We imagined ourselves as a venture-capital-backed start-up in Silicon Valley whose mission was to attack and disrupt The Atlantic. In essence, we brainstormed the question, ‘What would we do if the goal was to aggressively cannibalise ourselves?’ ”

The existing paywall was torn down, new young writers were hired and sales staff were told to hit one target – it didn’t matter whether it was print or digital.

But The Atlantic is not Fairfax – it’s a tiny business owned by one individual, David Bradley. While self-cannibalisation is theoretically the way to go for all traditional media companies trying to make the transition to digital, that’s very difficult for a big publicly listed firm.

Big traditional media firms with less understanding owners have a much more difficult task ahead.

Follow @AlanKohler on Twitter

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