Things are coming to a head, at last, in the ongoing confusion and flailing around at Fairfax Media. Whether this results in any brave new direction for the company remains to be seen.
For the last couple of months the Fairfax board has been torn between conflicting advice from two of its senior executives. On the one hand there is the CEO and former Rural Press boss Brian McCarthy, and on the other the CEO of Fairfax Digital, Jack Matthews, who is apparently after McCarthy’s job.
McCarthy is hardly a new media guru. He represents the rump of Rural Press, which has been effectively running the company since the Fairfax-Rural merger of 2006. Although he gets cross when people accuse him of being a cost cutter, the fact is his main legacy so far has been to trim and trim again.
He had little choice during the financial meltdown of the last couple of years. The question now is whether the cuts have been so deep that the company cannot rebound and innovate as is needed.
Matthews, on the other hand, represents the digital future. Or that is how he would like to be seen. He is more personable than McCarthy and better liked — although even his supporters admit if he has a clear and inspiring vision for Fairfax, he has not yet made it known to his colleagues.
A couple of months ago, faced with a dispute between the two men over the company’s medium-term strategic direction, the Fairfax Board decided to bring in the management consultants, Bain and Company, to advise. I understand the firm’s report is now nearing completion. Some believe it will be used as an excuse to ease McCarthy from his position.
One of the questions being asked by close observers is the extent to which the Fairfax family, which has stuck like glue to McCarthy and owes him big time for making them money at Rural Press, will continue to back McCarthy.
But there is also a rumble that McCarthy might not be entirely reluctant to go. At social occasions he has been heard to discuss taking things more easily, and refocusing away from work.
Bain and Company has some material on its website about how it sees media futures. The insights are fairly conventional and could have been picked up for free by attending any of the several recent conferences on the future of the media.
But the vibe is clear: power is transferring to the audience, and media companies need to listen and innovate deeply, re-examining old structures and ways of operating. Elsewhere, there is more interesting material on strategies for online brand advertising and a prediction that media profits in the future will shift to those managing content, rather than only creating and distributing it.
The Bain and Company line as reflected in its publications is that media companies should not try to be all three links in the media chain — as creators, managers and distributors of content. And they should seek to identify and “own” target audiences across media platforms:
“Media companies need to be disciplined about where not to invest. While it makes sense for content creators and distributors to carve out as large a stake of the profits from content aggregation as they can, neither should try to play all three links in the chain as creators, managers and distributors. Distributors and creators should focus on the content management that sits between distribution and content creation. Distributors should buy the content that will generate the highest return on investment from their customer base. Creators should sell their products through whatever combination of platforms generates the most revenue.”
That sort of advice, if reflected in the report to the board, will favour Matthews more than McCarthy’s old-school approach. It might also shed light on the company’s recent, Matthews-driven excursion into buying long-form video content from Channel Ten and the ABC for delivery on its websites.
Meanwhile the board still hasn’t acted to appoint the promised new director with media experience. Fairfax followers will remember that at the AGM last year the company took a lot of stick over this issue. The board rejected candidates with journalism backgrounds, including Steve Harris, Gerard Noonan and Stephen Mayne, but a promise was made that media experience would sought out.
Since then, three new appointments have been made. Sandra McPhee and Linda Nicholls were two competent career company directors without media experience. The third appointee was Sam Morgan, founder of the New Zealand auction website Trade Me, now owned by Fairfax.
But unless you count JB Fairfax himself, who trained in the newsroom many moons ago at a time when journalists still used typewriters, there is no journalistic heft at the top of the company, and that fact does not seem to be animating any sense of urgency.
Chairman Roger Corbett promised at the time of the new appointments that another would follow, and it was presumed that this would be someone with journalism background. Five months later, we are still waiting.
Journalists aren’t confident that any brave new direction will emerge. There are eight voluntarily redundancies being offered at The Age at present. I hear that some very senior and valued people have put up their hands.
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