By Adam Fraser.
I had a fantastic chat on this week’s podcast with Clive Dickens, the Chief Digital Officer of Seven West Media.
A fascinating perspective from the inside of a legacy media empire – with traditional print, radio and TV media properties facing severe disruption and fragmentation from the digital and social revolution of the past decade.
Clive showed Seven are truly embracing change and disrupting themselves from the inside in many ways as they adapt to streaming video on demand, mobile penetration and media fragmentation more broadly.
Darwin’s theory of evolution is evident in spades. The species most likely to survive is not necessary the smartest or quickest but the one most able to adapt of change. Adapt or die.
A further example of this theme was also evident in the financial results from Fairfax – possibly Australia’s most well known media company. Owner of well known mastheads such as Sydney Morning Herald, Melbourne Age and Financial Review, they are in many ways a barometer for how traditional media is adapting to digital disruption and the pace of change.
It has been an unavoidably brutal period in Fairfax’s history. Cost cutting, outsourcing, deep changes to journalistic business processes have been experienced.
The results are challenging yet with glimmers of hope from the transformation process. Whilst loss making overall, driven by balance sheet write downs in the value of some of its newspaper mastheads, the business remains EBITDA positive and non print income now generates 42% of total revenue (versus 20% 3 years ago). Traditional advertising continues to decline. The digital property listing business Domain is now a key driver of earnings. A digital ventures unit includes TV streaming start up Stan.
The stock market remain unconvinced but the the Fairfax CEO Greg Hywood remains bullish:
“Today’s result is proof that the transformation of Fairfax Media over recent years has succeeded. The stable top-line revenue and EBITDA make it clear that we have reshaped this company into a high-value, broadly based, digital rich business”
Certainly the transformation journey has begun. How successful they are long term is open to debate but it’s encouraging to see Australian media businesses embrace the challenge to pivot and transform. The alternative is of course obsolescence.