Monthly Archives: August 2009

The News-Fairfax Non Aggression Pact

I thought this might happen. From today’s Crikey:

The head of the Australian Competition and Consumer Commission has warned Australia’s newspaper companies that they should be very careful about behaving like a cartel as they plan ways to make money from the internet and recover from their financial difficulties.

Graeme Samuel issued the advice following last week’s comments by Fairfax chief executive Brian McCarthy, who announced that he would like to hold talks with rival News Limited about ways in which the two businesses could maximise profits from their respective on-line operations.

It’s the only way they can make the jump to locking up content behind a paywall. If they don’t do it together, then the remaining free, ad-supported one will get all the traffic. The first one will die, while the second one will cannibalise its business until it’s gone – before making the same move.

So neither wants to jump. But if they don’t, then they’re both going to disintegrate as they continue to respond to declining advertising revenues by firing staff, leading to further losses in quality followed by further declines in revenue, and so on, until there’s nothing left.

I’m no media industry expert, but it seems to me that the only way they CAN save themselves is to act as a “cartel”. Even though they absolutely despise each other.

Two bitter, hated rivals forced to join forces, knowing that a last-minute betrayal would ruin their opponent and lead to them reigning supreme, but also fully aware that if it falls apart they’ll be ruined too?

This will be very interesting to watch indeed.

UPDATE: Ben Shepherd considers which areas might work beyond a paywall. Or not.