There’s a bigger picture past ‘limited visibility’

THE global white-knuckle ride for newspapers – like many other areas of the economy – is picking up speed for Western media, writes Mark Hollands.

In an industry that has used technology to drive efficiency and reduce headcount in print and production areas, companies are now looking at the journalists’ staff roster with red pen in hand.

Much has been made of the Fairfax redundancies across Australia and New Zealand. Similar actions are going on at newspapers across the region. The underlying strength of our regional media means that we are not seeing the degree of cuts at other companies, such as Ford (800), Telstra (800+) or a myriad of financial services companies, or building contractors.

In the UK, it has taken a French newsagency with impeccable English to count the cuts. Agence-France Presse says 2,300 retrenchments have been made across all British media in the past week with hundreds more expected. The revered UK Press Gazette, once every Brit journalist’s source for the next job opportunity, estimates some 140 people have been having their farewell drinks down the pub every week since July. Another 3,000 have gone at the Beeb (BBC). ITV and Channel 4 (channels not owned by government) have shed 1,000 and 150 respectively.

Without wanting to sound flippant, the Americans may well have stopped counting.  A survey by US media analyst Alan Mutter, who writes a decent column on the INMA site, says profits of US newspapers have fallen 40 percent. More than 4,000 journalists have lost their jobs and even iconic titles such as the New York Times (100), USA Today (50) and Wall St Journal (50) have not been immune.

Closer to home, it is fair to say prospective advertising revenues have fallen off a cliff. At their respective shareholder meetings, CEOs David Kirk (Fairfax Media) and Ken Steinke (West Australian Newspapers) said they had limited visibility to short-term revenues, especially from the Retail sector. Retailers have been prancing through news media companies telling no end of tales of woe; of how their competitors are going to go broke, how they are the ones who need the discount and only they will pay media companies back in the future through long-term relationships.

Harvey Norman has been one of those. Smartly, it is using the downturn for a bit of megotiation leverage. Reuters todday reported it expected a 31.5% fall in first-quarter profit as sales continue to fall and retail margins remain under pressure. Harvey Norman, which based its earnings guidance on preliminary figures, said like-for-like written sales for the 28 days ended Nov. 23 were down 3.1% on a year earlier.

As a consequence of such retail trends, actions on the media side have had to be deep and meaningful. When sensible companies take large redundancy actions, they will cut a little deeper than necessary. It pays to ensure there is some capacity to reinvest and re-architect business practices or create new and different products.

During my 12 years in the technology industry, we had two major downturns – the dotcom crash and 9/11. No economic sector got so crunched as technology in those times. What happened may have a parallel for news media companies. Here’s what I recall from those sweaty-palm days:

• The good companies already had good business processes, they retained key staff and never moved off strategy – and won market share
• Individuals who had redundancies decide to ‘consult’ (freelance to use a journalistic term) and were open to new opportunities
• The market came back, as we always knew it would
• When it did, there were not enough people on staff to get the work done – it was a consultant’s (freelancer’s) paradise
• Jobs opened up quickly when the turnaround came, yet not everyone chose to return to a similar, previous existence. Some found new opportunities and interests

Why am I saying this… because there are many journalists who have left, or will leave, their job and wonder, ‘what next?’.

Journalists and photographers are among the most talented, creative people you’ll find in the job market. There will be many opportunities, either back in the industry we love, or not too far afield. The key is to work your contacts and be open to possibilities. I’ve been forced to do this twice, and was always amazed at what happened next.

Mark is CEO of PANPA. He began his career as a journalist in the UK and held various editorial roles at News Ltd.