Because disruptive technologies disrupt - Australian media group to cut 1900 jobs

The Australian media industry is being hit hard.
Written by Tom Foremski, Contributor

Fairfax, the second largest Australian newspaper publisher, said it would cut 1900 jobs, almost 20% of its staff. I was asked for comment by the Australian Broadcast Service, which was concerned about the effect on independent news from the loss of hundreds of top journalists.

I said that it will have a very bad effect because well-financed special interest groups will have a field day promoting their agenda. There's very little that can be done to stem the loss of journalists because we don't yet have a business solution to this problem, which is the direct result of a disruptive technology at work, one that continues to devastate the US media industry. Last week, Advance Publications announced 600 job cuts at newspapers in New Orleans and Birmingham, Alabama.

And there will be even more job losses to come.

In her story about the Fairfax cuts, Reuters reporter Victoria Thieberger quoted Margaret Simons, the head of the University of Melbourne's Centre for Advanced Journalism.

"There is no business model that can support the hundreds of journalists that are employed by companies such as Fairfax."

When there's a disruptive technology at work in your industry there's little that can be done to avoid its destructive nature. I constantly have to remind people that disruptive technologies disrupt. That's why they are called disruptive, it's not because it sounds edgy and cool.

The Internet is a publishing technology and so that's the sector where the disruption is hitting hardest. The PC, in comparison, was also hugely disruptive but that is a computing technology and so the it devastated the computer industry -- IBM barely survived.

Unfortunately, there's a belief that as long as you can see the disruption ahead, that if you can see the train wreck on the rails ahead of you -- you'll be fine because you can do what's needed to survive. But it doesn't work that way, you will slam into that train wreck too, because you won't be able to downsize, cut costs, change business models fast enough. I've seen it time and again.

Look at Fairfax, those 1900 job cuts will be made over a period of three years. That's a lifetime in a fast changing media industry.

So what will happen to quality journalism? What will happen to trusted sources of information? Who will protect us from monied special interest groups seeking to promote their own agendas through the media?

The 1% can pay for the media they want you to read; but the 99% have no solution for getting the media they need.

This is by far the most important Internet issue we face, it's far more important than the digital divide, broadband, or search engine monopolies.

How can we ensure that we have a competitive, independent journalism community, able to deal with the complexities of today's world and present us with the best quality information?

We need quality reporting so that we can make the right decisions about our future, and about hugely important issues such as the economy, ecology, education, elder-care, energy use, the environment -- and those are just the issues that begin with 'e'.

The problem is we don't have a value recovery mechanism for quality journalism. Clicks are the currency for most of today's media but a click is a click regardless of the quality of the content it surfaces.

Let me give you an example: it takes me a day to drive to a meeting, interview a chief executive, come back, research, make more calls, and then publish a story.

Yet I can often get just as many clicks by sitting at my desk for 30 minutes and "blogging" a story based on some other reporter's work.

The clicks I get from an original piece of reporting won't pay for that day's work. And I'm just a guy with a laptop. I don't have a staff of reporters, editors, photographers, admin staff, printing presses, office buildings, pension plans, delivery trucks, etc, to support. So if I, with my modest expenses, find it hard to justify original reporting, how will newspapers do it?

This is the Gordian knot of our times. The saving grace is that if anyone, I, Rupert Murdoch, or you -- figure it out, we all benefit, we can all adapt to that business model.

I've been warning about this issue since I left the Financial Times in mid-2004. At the time, I was confident that we'd find a solution within five years. We haven't -- and I've seen nothing yet that shows that we will.

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