Change agent Kim Williams ‘resigned’ from running News Corp. in Australia yesterday. He’s been replaced by the former Chairman of the Herald & Weekly Times Julian Clarke in a move many commentators label seat warming for a longer term leader – some are speculating about Lachlan Murdoch for the role.
Williams’ resignation is evidence of company infighting at News. He was a change-agent recruited to focus on the digital platform. In this role he inherited T2020 – the name of the strategy to overhaul newspaper distribution. Williams oversaw tweaking T2020 and then presided over its death or stalling at least.
Now it looks like print people are back in charge. News insider Mark Day said as much on ABC Radio yesterday. This could mean T2020 or the goals of T2020 – cost savings for the company – are pursued again. But this is only speculation.
My expectation is that News will refocus on its print products and the costs associated with distribution of these products. They’ll do this because subscriptions and advertising revenue from digital come nowhere near what the company needs to serve its cost base or support its share price, nowhere near advertising revenue from print today.
I expect we will quite quickly see moves by the company on print given the saving some in the business expect they can achieve by focusing on the distribution costs. While I could be wrong as to the outcome, I am certain there are senior people in the company keen to ‘fix’ what they see as an expensive and inefficient distribution model – especially in capital cities.
The recent leaking of internal News correspondence, a reported by Crikey, showed discontent within the company and disputes between old and new guard factions.
It was put to me recently that some News execs see newsagents as a union they have to break in order to fix what needs to be fixed. The company will disagree, saying there is no one in the business who holds that view – just as they denied my comments a while back that News was in crisis in terms of newspaper home delivery.
While T2020 is what will matter most to newsagents flowing from the coup at Holt Street, the bigger picture is the future of the company itself. Challenges abound:
- Print versus digital.
- The financial model of free versus paid.
- Subscriptions versus single copy sales.
- The processes and costs of landing subscription copies on front lawns. That last mile is the killer for them.
These are matters of serious interest to newsagents and to News executives. They go to the core of the change in leadership I think.
We’ll read from industry associations that they are seeking meetings with the company and that they will advise newsagents once these meetings have happened. The reality is that News will advise newsagents about its plans when it is ready and not because someone demands answers.
The changes to the distribution of newspapers are far from over. Newsagents can be on the front foot by themselves consolidating to deliver News greater efficiency. I’m certain News will welcome more proposals from newsagents that reduce drops and the number of newsagent accounts they have to manage.
My advice to distribution newsagents is – do not wait for action from News, get on the front foot now, develop a business plan and pitch it to the company.
We pitched a plan to news a few months back that would benefit them and us ,get more customers increase sales etc and we where told you want your cake and eat it to” end of conversation … no negotiations or anything just a seeya later keep doing what your doing we couldn’t care less attitude ..
This is a good report to read: http://www.smh.com.au/business/media-and-marketing/making-the-wrong-enemies-how-williams-was-cut-down-at-news-20130809-2rnsx.html
They would greatly increase their print sales in my area if they could get the paper to us on time. Three days in a week “missing in action”. arriving at noon instead of 3.30 am. NO distribution hub of efficiency can distribute when there is actually NO PAPER. The competitors win hands down.
It’s clear from the way T2020 was handled that KW either knew nothing or didn’t want to know anything about home delivery and physical distribution.
Let’s hope the next snoozer understands that the relationship between satisfactory home delivery service and real circulation is symbiotic. Only effective home delivery can sustain circulation at a worthwhile level.
in rural areas home delivery is not economical and never will be. We should be able to dump home delivery services but maintain our sub agent network. Most people in country areas would understand that home delivery is not viable today.
Rick,
What a great topic for the associations to take up with News and Fairfax!
Oops – hang on – no free lunches involved here, no opportunity to sneak one past the members as they have done with Connect – sorry, doesn’t meet the stringent criteria demanded by the ANF and the lickspittles in the state associations.
If you are in a rural area and have not looked at this weeks supply for the DT I suggest you do it. I have found my supply for today was correct but the rest of this week down 30 to 40% on the quantity that our SCR emailed me 2 weeks ago for the holiday period, which I agreed to. To make matters worse my quantity for this Friday was zero as last week News Ltd did not supply to a lot of rural areas and this has not been updated in the system for this week (IMO, circulation did not know there was a problem with updating Fridays supplies to a publishing day for rural areas). A quick call to circulation hopefully has fixed my supply, but was advised to check every morning for the next week to make sure.