12/03/2008 - 22:00

Last of the independents?

12/03/2008 - 22:00

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A couple of weeks ago, a leading Perth business person rang me with some views on the WA Newspapers Holdings Ltd stoush between the existing board and Kerry Stokes’ Seven Network Ltd.

A couple of weeks ago, a leading Perth business person rang me with some views on the WA Newspapers Holdings Ltd stoush between the existing board and Kerry Stokes’ Seven Network Ltd.

Before offering me an angle, which I later followed up on, the caller asked me for my view on the matter; in other words, which side I was on.

I was genuinely taken aback.

Perhaps the business person involved was being cautious before committing to someone who supported a particular side, who knows? Whatever their reasoning was, my answer was that I didn’t have a side.

When reporting on major issues that occur in the state, it’s easy to privately form a view based on your own knowledge, experience and understanding of the situation and the people involved.

But it’s dangerous to form that view too early, or allow it to colour your reporting.

Staying objective is the key.

That’s harder in a comment piece, even a bit boring perhaps, where people expect to hear your views.

But it’s absolutely a key factor when approaching the WAN story.

Not only is it an important story throwing up real business issues and involving the reputations of some very well-known people, but it also involves a very obvious competitor to WA Business News, which further clouds the perception of objectivity.

As a journalist, objectivity allows you to keep the communications lines open so that readers get all the views they need to base their decision.

Even with Kerry Stokes now committed to speaking at a WA Business News event in three weeks, we need to make it clear that this is a story that requires a truly objective approach.

While many observers view the WAN battle as a fight over who can better operate the assets of that company, which publishes that venerable institution The West Australian newspaper, I reckon there’s something else in this.

This battle is for the hearts and minds of investors regarding the future of media, not just in Australia, but beyond.

Whether he intended to do so or not, by seeking to spill the board Mr Stokes is not really asking other WAN shareholders if they believe the company is well run or not.

The question being asked is whether an independent regional publisher like WAN has a future as technology drives changes in the way we communicate.

WAN’s market has long been sniped at from a variety of angles.

The last real attempt to get a genuine consumer competitor to rival WA’s longest-standing daily was in the 1980s, when Robert Holmes a Court had the now-defunct Western Mail.

Since then, the competition has been very different: from more specialist media (like WA Business News), to national newspapers and, in recent years, an online assault.

This is no different than any other mature market where daily papers in general have failed to keep pace with the overall growth in population.

The news organisations that have done best are, arguably, those from big population centres with strong brands, which have used online growth to supplement local losses.

The Washington Post, The New York Times, The Guardian and The Sydney Morning Herald are good cases of publishers that have used their brand to go online to deliver news well outside their traditional markets.

In some cases, as with Fairfax, they have gone so far as to launch online operations outside their traditional markets such as Brisbane and, soon, Perth.

Regional players have a much tougher time doing that, especially as international news becomes a commodity.

The jury is out on whether WAN will die a death by a thousand cuts as big majors and local niche players chip away at its base.

The alternative is that there is simply an adjustment taking place and that there will be a role for a regional player.

If investors think it is the former, then they may find some solace in opening the door for Mr Stokes, in the hope that closer alliance with Seven, a national player, will help combat competitive forces better than a standalone operation.

The price they may pay for that could be exactly what the WAN board argues is the issue – allowing a de facto takeover without a premium for control being paid, though the Stokes camp denies that is the case.

The alternative is that investors believe WAN can survive independently, or at least prove valuable enough that a proper takeover takes place.

There is a view of history that suggests this is possible.

Print is the oldest form of mass communication outside the town crier and it has survived countless technologically driven assaults during the past century.

In each shake-up, newspapers have ended up with a smaller slice of a bigger pie.

But not all newspapers have survived this change.

For instance, over the past two decades, many newspapers in rural centres have died or become part of bigger media groups.

And many publishers in big cities have gone the same way.

That depended partly on the ability of management and the strength of the brand, and partly on the broader market forces.

No-one really knows how much of each matters, though clearly it helps if all these elements are lined up favourably.

Will WA, with a population of two million, become too small to sustain its own independent daily newspaper in the next wave of consolidation in the industry? Or, after the current shake-out, will WAN find itself again with a smaller slice of a bigger pie? That is the question WAN investors – and I am one of them as a result of having once worked there – have to ponder.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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