“The pace of technological development and the changing patterns of consumer behaviour, are the most important challenges facing the modern media firm”. Discuss.
I will discuss the above statement and in doing this I will look at the Irish media firm Thomas Crosbie Holdings (TCH) and compare it to the International media firm News Corporation.
I will look at the challenges that both firms are facing and how each business is coping with these challenges.
Thomas Crosbie Holdings was first established in 1872 when Thomas Crosbie took over the Cork Examiner after the death of its founder John F. Maguire. By this stage Thomas Crosbie was the editor and had been working at the paper for over 30 years after starting work there at the of 15. In 1899 Thomas Crosbie died leaving his business to his son George. Major expansions to TCH began in the 1990’s and by 1994 the company revenues for The Examiners publications unit were worth €20 million. By this stage the company had shown interest in investing and it went on a buying spree, in which acquired it 17 more titles between 1995 and 2005. Before the company was limited to just The Examiner, Evening Echo and Waterford News and Star and now expands across radio, Internet, print and website areas too. The Western People in Mayo was the first acquisition back in 1995 and the most recent has been WLRfm and Beat Fm in Waterford just last year. In 2000 TCH made its first deal in Northern Ireland by buying the Newry Democrat and three years later the company bought The Irish Post in Britain from Jefferson Smurfit for £1.7 million.
While all was well for TCH the new millennium brought its own deal of financial problems to the company. After losing over three quarters of a million in 2002 the group struggled through and the next year. These years were a threat to the business and observers began considering whether TCH had tried to conquer too much too fast. However in 2004 pre-tax profits has risen almost 50 percent.
2004 brought with it other changes too. The company’s printing operations were being closed down after almost 153 years in operation. A new company was being set up in the Mahon area of Cork to print the papers. In this same year TCH also decided to sell ads on all its websites including motornet.ie
Two years later in 2006 TCH conquered its last newspaper acquisition. By this stage there was just one remaining Independent regional paper. The Echo group including the Wexford Echo and New Ross Echo with a total circulation of over 22,000 was bought this year.
News Corporation was founded in Australia in 1979 by Rupert Murdoch. In the beginning News Corp or News Limited as it was known then was created from the assets that Murdoch inherited after his fathers death. This one newspaper which was called the Adelaide News has since expanded into the worlds largest media firm. In the early 1970’s the headquarters moved to New York where they are still located today. Almost forthy years on the corporation’s revenue is worth over $28 billion and has shares in publishing, media, radio, tv and print companies. Amongst the many International companies owned by News Corp are The Irish Sun (Ireland), The Sunday Times (UK), The New York Post (US), The Wall Street Journal (US), 20th Century Fox (and related Fox companies) and Myspace.
One of the greatest challenges facing all media firms including the two I have mentioned was the introduction of the internet. The first idea for a system like the internet came about in the late 1940’s. However it took many years for the internet as we know it to be established. The introdution of the internet has posed both great threats and opportunities to media firms. Print based media firms have come under the greatest threat. Before a newspaper would be printed daily/weekly and the only competition was radio and television. However now with the internet we have a new system wherby news stories can be put up online and accessed by anyone with an internet connection. This “virtual” newspaper is especially threatening as it provides a cheaper and easier way for readers to get their information. The introduction of free wi-fi interest net access areas has speeded up this process and made online information even more readily available.
As a result of the internet the majority of daily newspapers internationally have had no choice but to develop their own websites so that their loyal readers will read The Examiner online or The Wall Street Journal online instead of going to another paper which has a website.
In recent years TCH has developed websites to tackle this new internet nation. The Irish Examiner website was first set up in the mid 1990’s. TCH did face the same threats as other media firms internationally but saw this as new system as an opportunity to expand further into the media system. Since then TCH has set up many other internet services including RecruitIreland.com which provides a job search database for those looking for jobs. Other internet services run by Thomas Crosbie Holdings are Motornet.ie, Breakingnews.ie, Rugby.ie and Golfline.ie All of these appeal to a variety of different target audiences nationwide and so give TCH a good grip on the internet media market.
This years JNIR (Joint National Internet Research) survey supports this above statement. Results of this survey show that visitor numbers to the Irish Examiner website have increased by 17% in the past year. Breakingnews.ie perfomed similarly with a 16.4% growth. In the overall figures of users, TCH’s websites compare favourably to the other competitive news media sources in the country. 74.6% of Irishexaminer.com users are in the upmarket ABC1 category compared to competitors like RTE.ie’s 66.7% and 75.9% of IrishIndependent.ie’s market. These results show that TCH media are top of their game and are coping with the challenges that are brought with the internet. Commenting on these results, Angela Crowley, CEO of TCH commented on the success of BreakingNews.ie which has 77% of this market. “We have completed a significant investment in the redesign of the BreakingNews.ie site and branding. The content and site design have improved considerably as s result of this investment and this is reflected in our JNIR performance”. There are future plans to invest in the redevelopment of Irishexaminer.com in 2009.
News Corp has also embraced the Internet as a media firm. One of News Corp’s greatest success stories is its ownership of Myspace. While the company does have direct online media firms Myspace is in a league of its own when it comes to providing the public with what they want. News websites exist because they need to but Myspace is an invention, which exists because it is what the people want. Myspace is a social networking site that was first developed in 2003 and was taken over by News Corp in 2005. At the time of this takeover Myspace was said to be worth $327 million. Now three years on the company has grown to an estimated value of $15billion. News Corp tackled competitor websites such as Youtube.com and Myslide.com by adding them to their own website in the form of widgets. By making these features available Myspace keeps a firm grip on Youtube and other competitor websites. Along the way similar networking websites such as Bebo and Facebook have been set up but according to Techcrunch.com Myspace still remains top of its game and is still first place in the international user market with Facebook coming in second and Bebo in third place.
Whilst in the beginning TCH’s primary focus was on print media this has changed in recent years. The company has shown a great deal of interest in the ownership of radio stations. While the radio industry has been around for a long time it has taken a long time for this company to make the move. It may have taken years but once TCH got a taste for the radio industry it didn’t just stop at one. Now the company owns/part owns Cork’s Red Fm, Waterford WLRfm and Beat 102-103 fm and Mid West Radio. Radio poses great challenges to the print media industry. Print media has its disadvantages in that the majority of newspapers only produce one daily edition. They present the news as it is at the time of publication and updates are not available. Radio on the other hand can provide updates as they come in via news bulletins on the hour. This is challenging for print media as half way through the day their top story may be considered “old news”. Of course print media has its advantages too as the story can be read and reread and visual aids in the form of images and survey charts. While print media does has its advantages TCH did see the advantage of owning another form of media and in recent years has taken the plunge and now has another section of the competitive media industry.
In September 2007 TCH received approval from The Competition Authority to hold a majority shareholding in both WLR and Beat 102-103. Through this the company has acquired a 75% shareholding in Beat 102-103 and WLR. Commenting on this achievement TCH Managing Director Anthony Dinan said “We can now proceed with building and developing our business. The addition of WLR FM and Beat 102-103 FM will greatly enhance our portfolio of businesses and brands.” The company also has 36% shareholding in Red Fm in Cork and 15% in Mid West radio in Mayo.
Radio media firms are not the only firms that TCH has taken over in recent years. The company has also acquired shares in several print media businesses nationwide.
In 2004 TCH bought The Roscommon Herald. A long-standing print media firm that had been operating since the 1800’s. According to Group Managing Director Anthony Dinan this was the company’s “Eleventh acquisition in nine years”. Other takeovers include The Echo Group (which includes the Evening Echo) in 2006,
Takeovers have proven a great success for the company but so also has the establishement of a new print publication called The Sunday Business Post. The first edition of the paper appeared in November 1989 and according to the Audit Bureau of Circulations the average weekly circulation was 53, 871 in 2007. The paper appeals to the business market and describes itself as being “Ireland’s Political, Economic and Financial Newspaper”. Aimed at the middle to upper working classes this paper caters for a different target audience. At the time there was a niche in the market for a newspaper looking at issues such as politics and money and The Sunday Business Post filled this gap.
There are many similarities between TCH and News Corp. They both own radio stations, newspapers and websites. In terms of these TCH does have a strong grasp on its national market and News Corp is conquering the international market. While the companies are quite similar News Corp is years ahead in that it has spread to the international market. Starting off an Australian based company News Corp now has shares in the UK, Irish, US, Asian and Australian market. By spreading itself amongst so many companies News Corp has had opportunities to own more types of media firm. Owning 20th Century Fox and its related news stations and networks has opened up a lot of doors for News Corp. They now own their own cable channels and studios. Outside of the direct media market News Corp also has shares in the Australian and New Zealand National Rugby League, The Brisbane Broncos and The Colorado Rockies. News Corp also part owns Harper Collins Publishing company.
So while the impact of technological development and the changing patterns of consumer behaviour are the most important challenges facing the modern media firm I believe that both of the firms I have looked at have embraced these changes and used them to their advantage. Whether it is through News Corps Myspace invention or TCH’s radio and internet focus both companies have not been afraid to try new things along the way. Both media firms have struggled at times along the way but I do believe that TCH now has a strong grasp on the Irish Media market with potential to expand internationally and News Corp is above all others in the international field.