For anyone who bothers to read this, I apologise for the long time between posts. Amongst other things, I have been experimenting with becoming a rock star and a few weeknights have been taken up with band practice so we didn't make complete asses of ourselves when we did take to the stage. You can see the results of our efforts if you go onto youtube.com and type in "Captain MREMS and the BJs". As things stand today, despite the depressed condition of commercial property markets, I am not contemplating a career change. However if anyone has an "in" with Michael Gudinski, please let me know.
Now back to a story which piqued my interest a few weeks ago concerning the future of the media. Funnily enough it all started with a 15 year old intern at Morgan Stanley in Europe. It's not often that anyone takes notice of the remarks of a callow adolescent, however the remarks he made to his employer sent something of a shockwave through the media world.
Apparently, media analysts at Morgan Stanley in Europe had interviewed this particular intern about the media consumption habits of his generation, which found, amongst other things, that teenagers don't watch much television, think newspapers are irrelevant and prefer downloading music for free or from on-line forums like iTunes rather than going out and buying CDs from the shops.
Media analysts and some traditional media companies reacted with horror and surprise at the report Morgan Stanley subsequently issued based on the interview with their intern. However, when you think about it, what is most surprising (and disturbing if you are a shareholder of one of these companies) is that the media companies were actually surprised by the findings. Because when you assume the perspective of someone born into the digital age, the limitations of traditional media like newspapers and television are blindingly obvious.
Take television, for instance. About 10 years ago, my wife and I got so fed up with the unadulterated excrement that screens on free to air television that we bit the bullet and signed up for Foxtel. However instead of providing more viable viewing options during the limited times we get to sit down and watch television (ie. after 9pm), all this has done has quintupled the amount of excrement available, at the considerable cost of $126 per month. Foxtel in Australia comprises over 60 channels, most of which are chronically unwatchable unless you are either a compulsive vidiot or borderline autistic. Weather, CNBC, Bloomberg Market Watch, Home Shopping channel - who cares? On the odd occasion that you might want to watch something they are screening, it is on either at 10:30 in the morning or 11:30 at night, which is an impossible ask for any professional person who wants to earn enough to pay for their Foxtel subscription.
What is perhaps most galling given the substantial subscription fees Rupert charges is the fact that you can be sitting down watching something vaguely watchable and then all of a sudden you get interrupted by a sequence of ads so long it would make a Channel 10 executive blush with embarrassment. It is usually at this point that I switch off with disgust and reach for the nearest newspaper, which is kind of lucky for Rupert as he has me covered there as well. However, when confronted with rubbish on television and not being able to watch what they want when they want to, most 15 year olds don't see the appeal in crosswords or sudokus and instead head to their bedroom to log on to Facebook, or, if their atrophied attention span can handle it, put on a DVD.
When you compare the limitations of live television with internet applications like youtube or other illegal variants which allow you to watch what you want, over and over again if you like, is it any wonder that television viewer numbers are sinking like a stone? I was reading an article by Jeremy Clarkson awhile ago lamenting that at the height of Morecambe and Wise's popularity in the early 1970s, over 5 million viewers would tune in, while nowadays, "Top Gear" struggles to attract more than 2 million. Market saturation of TV Channels might partly account for this but people embracing other media is clearly the major cause. Anyone who lives with children between the ages of 5 and 15 will know exactly what I am talking about. Even my technophobic wife has started up. Perhaps inspired (or appalled) by our band's performance last week, I came home on Friday to find her not perched in front of the Lifestyle Channel but instead on youtube looking up 1980s Australian film clips. I won't go into exactly WHAT clips she was watching, but suffice to say whatever was on television must have been particularly dreadful that night to force her to do it.
It will be interesting to see how the major media companies react to this generational shift in media consumption habits. So far, both News and Fairfax appear to have made a major hash of it. Fairfax have alternated between pretty much doing nothing in the hope the internet goes away, and setting up a half-baked website to recycle their newspaper stories without working out how to make money out of it. News, on the other hand, have ventured into a disastrous investment in One.Tel, overpaid for a US satellite company and then gone to great lengths to acquire another US newspaper (the venerable "Wall Street Journal") at the top of a speedily-shrinking market.
This failure to come to terms with the new media has shown up in the abysmal performance of their share prices. At the height of dotcom fever when both companies were expected to cash in on the promise of the digital age, Fairfax shares touched $5.50 and News Ltd $56. Today, 9 years later, they are trading at $1.50 and $15 respectively. Meanwhile companies like Google and Seek who were early embracers of the new technology and worked out how to make it profitable have gone from strength to strength.
How this all plays out is difficult to know exactly given the pace of change in the industry. However, given events to date, you would not expect traditional media to be the winners. Too used for too long to having their near-monopoly positions protected by complicit governments which have allowed them to blithely consolidate and expand at will, they lack the necessary mindset and flexibility to adapt to the changing environment. In fact, instead of focussing their efforts on innovation, you could almost put the house on these companies to use government lobbying, threats and good old fashioned bastardry to try and stop their more nimble competition.
Take Google Earth for example. On any measure, a program that has digitally recorded every square metre on the planet to the extent it has represents a phenomenal achievement, not to mention an amazingly lucrative revenue raising opportunity. Almost overnight, Google Earth has rendered telephone directories and street directories entirely redundant, as well as stopped cab drivers the world over from taking you on a 10 km detour en route to your intended destination.
It is also an incredibly useful real estate tool. Already, because of its "Street View" function, it is saving homeseekers an incredible amount of time and effort by exposing the so-called "Renovator's Delights" in a real estate agent's classified ad as the flea-ridden dumps that they are. Unsurprisingly, the on-line real estate classifieds run by the daily papers use Google Earth extensively. However, when Google announced that it intended to set up its own on-line real estate finding service, the dailies predictably screamed blue murder and of course threatened to stop using Google's platform.
I bet Google aren't exactly quaking in their boots. After all the chances of those idiots coming up with a better global satellite platform than Google Earth are infinitesimal. I hope Google do go ahead and launch a competitor, because chances are the platform they do come up with will be user-friendly, informative and arm its users with the data they need to make an educated real estate decision, instead of just being a glorified advertisements like the other on-line services.
In a world where you can download live streaming of the cricket to your phone and upload footage of your band's performance from a remote location in country Victoria so someone in Canada can watch it 4 hours later, is it any wonder that a 15 year old looks at a newspaper in the same way that people born in the 1960s might look at a horse sulky or a mangle? Change can be scary, but it is also inevitable and in the area of media communication, only someone like Rupert with billions to lose could fail to be excited by it. The fact that the technological advances are also causing the dismantling of the old media oligopoly is also a good thing.
Maybe in time the changes will mean tiresome newspaper hacks like Andrew Bolt, Alan Jury and Kenneth Davidson no longer have an audience, and get called in by their bosses at GoogleNews to get made redundant. Now that would be footage that would be worth watching over and over again.
