Rupert’s Pearl Harbor Speech
Last week Rupert made the equivalent of Bill Gates’ infamous Pearl Harbor Internet speech in 1995. Back then, Bill said that people are using their computers differently and that the Internet was integral to most of the change. Nearly ten years later, Rupert said that consumers, especially younger ones, are consuming media completely differently and the Internet is integral to most of the change. Unlike a Procter and Gamble speech, Rupert’s tend to mean something, so forgive his common-sense conclusions.
Many may not like his media properties‘ point of view, but he is the most brilliant media executive in the industry. His best trait is exemplified throughout the speech. He can be completely wrong about something, admit that it is the case and then throw himself in the other direction without irony. Go and read the full transcript. His grasp of blogging and its role in integrating and deepening the print product are spot on. I don’t expect any News corp. online property to achieve anything close to his vision within 3-5 years. But heads will roll in getting there, and the organization will become a better one because of it.
Where there is irony, even for a Murdoch-blusher such as myself, is that the opportunity for innovation comes at a time when there are inevitable cost implications and business realities. Namely, the cost of paper, the primary expense of a newspaper, is rising dramatically by double digits and out of the control of every print publisher, and the dirty circulation tricks are being weeded out.
Circulation declines over the past year are not accelerating because of less people reading newspapers. That has been happening for fifty years at a fairly linear rate. Rather, the circulation tricks that used to artificially prop up numbers are being slowly peeled away.
Although the Internet does create an opportunity to enhance the overall media product when combined with print, I can’t get past the reality of paper prices. It is akin to what the price of oil is doing to the airline industry. In twenty years, publishers simply wont be able to afford to print on paper. Combined with less people reading the print product, and I think the environment is best summed up by the pithy conclusion of Knight Ridder CEO Tony Ridder: "We are not at the bottom believe me".
