John Juliano: These are indeed interesting times

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Is it ever not an interesting time to be in the newspaper business?

In the US, newspapers and the news media in general are being vilified by the new US president, his staff and his supporters. In response, newspaper subscriptions are on the rise and hard news programme viewership is skyrocketing. Far from failing, these outlets are growing viewership and readership thanks to Trump's, perhaps inadvertent but nonetheless, effective and relentless marketing on their behalf.

There is the adage, which now seems to flow both ways between Trump and the media he castigates, ''It doesn't matter what they say about you, as long as they talk about you.''

Recently he formalised his position to press outlets he doesn't like by declaring them enemies of the American people:

Who knew being unpopular could make us so popular?

At the beginning of the recent presidential election, much of the fake news had a surprising feeling of innocence; the original creators of fake news were open to interviews where they discussed the components of a fake news story. The sole driver was capitalism: driving traffic to a website to be shown ads. When it was discovered that members of one political party were more likely to click on fake news than members of the other, more stories were aimed at those who were willing to click on them.

It also appears that this appetite for sensational headlines could and was used by the Russians to sway the electorate towards their preferred candidate.
In fairly short order, two things happened: any news that contradicted an assertion was labelled fake news, and consumers became more savvy. Supporters of each party now ask, ''has the story been vetted?'' ''What organisation reported it?'' Americans, it seems, can learn.

For the vendor community, we'll see if increased readership in newspapers translates into increased sales to newspapers.

The number of vendors in our industry continues to dwindle through acquisition. Miles 33's purchase of Wave 2 and Newscycle's purchase of DoApp come to mind as examples.

Price continues to be the driving factor in sales. However, there are bright spots. Morris Communications, a major east coast US publisher is replacing their advertising system across the chain with a Gemstone system from the UK vendor Miles 33.
The sale demonstrates, to my mind, that allegiances are to people. Morris has bought three ad systems from sales person Ed Hubbard, from three different vendors, although Hubbard says he entered the MediaSpectrum sale very late.

It has always been my opinion that allegiances are to people not companies, which is why I was very surprised that DTI international sales people were on the market so long before being picked up. I personally approached vendors on some of the personnel's behalf and was amazed that sales people with sales in the pipeline were turned down.

We're also seeing a vendor in our industry behaving like large vendors in other industries. Newscycle is doing something that takes great confidence and has a great payback, establishing an online market of third party products that can be used with their products. My friend and former John Paton travelling circus member Bob Mason says products range from those that are integrated, to those that are merely useful to users. It is a great marketing idea: get customers in the habit of coming to you to solve their problems whether or not you make the product. It is the type of thinking that I expect from large corporations, not a vendor in our vertical.

I had little faith in the company's ability to survive or the longevity of its parent company's commitment to our industry. While, like politics, one an always argue about products, direction, and approach, Newscycle is demonstrating commitment and longevity.

Given the offshore ownership of various vendors in the American newspaper vertical, there is some worry about import taxes under the new administration. Donald Trump has been very unclear and very indecisive about what might be taxed, but generally his ire has been directed at companies that have shifted American jobs outside the country. I personally would be very surprised of we saw protective taxing against foreign companies in general.
International ownership of vendors is something we are quite comfortable with. Now American newspapers may enjoy offshore ownership. Fortress, one of the major investors on Gatehouse, is in the process of merging with the Japanese bank, Softbank.

Looking at Fortress' US$70 billion in holdings, Gatehouse is less than one per cent of Fortress' holdings, so it would be difficult to make the case that Softbank bought Fortress to get Gatehouse. If the deal closes towards the end of this year, we'll see whether Gatehouse is kept in the portfolio or sold off.

During the flurry a few years ago when the aforementioned Mr Paton was predicting a quick and profitable sale of Digital First Media, sources in the executive suite told me that one or more Middle Eastern buyers would snap up DFM. No buyers, foreign or domestic ever materialised, but if Softbank keeps Gatehouse, it may be an indicator of international confidence in American newspapers.

The Trump administration is difficult to read at this moment about whether there would be any objection to offshore ownership of a major news company. He has stocked his administration with very pro-business and anti-regulation people. Australian-born Rupert Murdoch carries an American passport to get around foreign ownership laws, and has moved his company to the US.


In the early 1990s, David Cole's pub, The Cole Papers, covered one of my products, transforming my company from two guys in a basement to one with installations on three continents.

He died on January 17.

The twilight of David's generation in newspapers may be upon us. Those of us who joined the industry in the 1970s, and who were the youngest people in the room for more than 25 years, have quickly and recently transitioned to the oldest and now are leaving the industry.

We say figuratively and with some flippancy that a generation is dying off. It is sobering to have the figurative change to the literal.
• Contact John Juliano at john@jjcs.com

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