15/08/2006 - 22:00

Poverty exists in the midst of plenty

15/08/2006 - 22:00

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The US is often cited as the best example of poverty in the midst of plenty. Parts of old coal-mining states such as West Virginia have been likened to the worst of the former Soviet Union. But, before accusing others of failure, it is sobering to look at remarkable examples of poverty in boom town Perth.

Expansion of the resources sector, which has driven unemployment down to 3.1 per cent, investment projects to a near-record $23.3 billion and housing prices through the roof, is having no effect whatsoever on three Perth institutions, one old, and two new.

The new example of poverty amid plenty was discussed by Briefcase last week – the troubled Perth Convention Exhibition Centre. How it is possible to have a business that’s less than two years old slip into a crisis when money is littering Perth’s streets like confetti is a truly fascinating question. The two old examples are not yet suffering genuine poverty, but are certainly showing every sign of heading that way after the publication of some very ordinary readership figures. Readers deserted The West Australian and Sunday Times newspapers in droves in the 12 months to June 30 – just as the economy went into overdrive with an annual growth rate said to have exceeded 10 per cent.

Like the convention centre, it seems the old ladies of Perth media are struggling to maintain relevance at a time when there are better alternatives for news and entertainment. The most obvious villain, which Briefcase explored at length a few weeks ago, is the internet, a place where both newspapers are fighting their latest battle via the launch of duelling web sites, which signal the death of ‘the gentlemen’s agreement’ about not competing on the same turf.

According to the Roy Morgan Research Centre, the number of readers of the Sunday Times dropped by 6.8 per cent in the 12 months to June 30, while The West dropped by 2.9 per cent on Saturday and 3.6 per cent with the Monday-to-Friday edition.

And remember this was at a time when the state grew by 10 per cent.

The two Perth papers were not alone. Declining readership was noted in most states, with all papers in NSW in decline and most of Victoria’s also losing support.

Briefcase is not smart enough to offer a solution to the problem of falling readership, just old enough to know that events in the print world are far more than a flash in the pan. A revolution is under way in consumer habits, and the internet is the primary culprit, as WA Business News is noting with the success of its daily news email.

The problem for management at The West and the Sunday Times is similar to that at the PCEC – what to do that attracts and retains customers.

While everyone can see that the convention centre is in danger of becoming a lost cause because of design and marketing flaws, the problem for the newspapers is less obvious because profit flows remain strong thanks to high levels of advertising.

But, if those readership numbers continue to decline, and the internet continues to grow (a certainty), it will not be long before advertisers question what’s the best location for their dollars.

•••

Another problem for newspapers is the need to retain a reputation for accuracy, and to avoid shrill and misleading reporting in difficult times. Last week’s readership figures were a prime example of how not to win the confidence of customers.

The report that most caught the eye of Briefcase was in The Australian newspaper last Friday headed, ‘Newspaper readership ‘holds up well’’ – creating an impression for a casual observer that business was ok.

But, the truth started to creep in by the second line of the first paragraph when “holds up well” became an overall national newspaper readership decline of 0.8 per cent. Briefcase might be fussy but there is a big difference between something holding up well, and something declining.

Once alerted, worse was to be discovered. Of the 39 newspapers surveyed by Roy Morgan, 25 suffered readership declines in the 12 months to June 30, roughly a two-thirds ratio of decline, and prompting once again the question of how can that be described as holding up well?

•••

Of the two Perth poverty problems the worst might seem to be the convention centre because it is so big and such an obvious flop.

Briefcase, however, thinks that fighting the internet is a much more serious issue and not much different to the challenge set by the legendary King Canute when he demonstrated the limits of his powers by showing that not even a king can tell the tide to retreat.

The convention centre might be saved with a more creative approach to attracting events, plus a bit of re-design – such as opening the southern side to the river, and doing something about parking for people attending events, such as blocking off sections for convention delegates and visitors.

But before fiddling with the detail, the first challenge is to attract events and last week Briefcase saw the event that must, as an urgent priority, be attracted to Perth.

The Diggers & Dealers forum in Kalgoorlie is one of the world’s great mining events, one that rivals the PDAC conference in Toronto and Indaba in Cape Town. It attracts some of the world’s top miners and financiers, but is severely limited by being held in a small and very isolated city.

True believers in Diggers being a unique event argue that it must stay in Kalgoorlie, and Briefcase understands that view.

But if shifted back closer to the place where it was born (the Windsor Hotel, South Perth) it would more than double in size, and attract many more international visitors who are put off from attending by the primitive facilities provided in Kalgoorlie.

The key to shifting Diggers is money.

It is an event owned privately by Palace Securities (largely Kate Stokes and family) but, somewhat curiously, not liked by all Kalgoorlie residents because of the influx of rich, loud, and sometimes unruly mining types.

Perth, however, would absorb Diggers comfortably and, when you consider that Perth is the genuine epicentre of the resources boom being driven by iron ore and petroleum (not Kalgoorlie’s favourite, gold), then perhaps it is time to make Kate Stokes an offer too good to refuse.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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