John Hartigan, chairman and chief executive of News Limited, yesterday spoke at the National Press Club. Click here for an extract from his speech as published by The Australian this morning. Hartigan’s case, in my reading, is more about the future of publishers and journalists they employ than the print newspaper medium:
Instead of throwing a paper over your fence we will offer you a much more sophisticated package of print and electronic content, incentives for loyalty and tools that allow you to conduct transactions with our advertisers.
We will make our content suitable for the next generation of smart phones: devices that are still in their infancy with potential to deliver news, information, entertainment and shopping in high definition with full interactivity.
I agree with most of what Hartigan said in the speech. Publishers do need to evolve their model for new distribution channels.There is a bright future for quality journalism. Consumers will pay for this.
Newsagents ought to read the extract in The Australian as it reinforces my view that our shops need to be flexible and our businesses need to be structured to not rely on newspapers for traffic as we have done for decades.
The speech also reinforces my view that newsagents do not need contracts with newspaper publishers in this period of transition.
Mark,
It’s not the contracts that is the problem it is what’s in them. They need proper negotiation covering our position and penalty clauses with escape clauses. The contracts we have are used as security and if they are removed the available purchasers will be reduced by (estimated) 80%.
Most newsagencys that we sell, the Bank takes a Bill of Sale or E.M.A.(Equitable Mortgage over Assets) as a “floating” charge.
They lend up to 50% oof the total value including stock of the newsagency.
Removing this would result in an incredible amount of purchasers not being able to afford to buy.
The Goodwill would drop alarmingly at least by half. This is not alarmist talk or one of fear, for I too agree with Hartigan and know that it is the way it’s going. We also need to be apart of this diversion or new world of commications and ridding ourselves of the current contracts is one thing re negotiating better ones is another.