Reading Killing Fairfax by Fairfax journalist Pamela Williams is a breeze. This is because of its focus on personalities and use of the conventions of fiction writing.
It nails the coffin for Fairfax newspapers dependent on classified advertising and killed by ad-supported online businesses.
Killing Fairfax revisits a personal recent past. I was rarely surprised by the book’s tale, revelations, personalities or their behaviours. What stood out was the stark economics.
This is the story of the loss of wealth and power resulting from the repeated failure of the Fairfax company to react appropriately to trends obvious since at least the late 1990s.
Williams begins, structures and ends her book around these economic facts. Here they are.
In 2007 the stock market capitalisation of Fairfax was $9 billion after the merger with Rural Press. By June 2013 the value of Fairfax droped to as low as $1.1 billion. What happened?
In that same period from 2007 to mid-2013 the market capitalization of three Australian online advertising competitors to Fairfax grew to about $9 billion. They took the rivers of gold in job, car and property advertising.
The company behind seek.com.au, advertising jobs, went from $2.1 billion to $3 billion.
The company behind realestate.com.au, advertising property, ranged in 2007 between $680 and $740 million reached $3.6 billion.
The company behind carsales.com.au, advertising vehicles, and which in 2007 was not listed “but had an imputed value in the sale to CVC of $400 million” (p. 312), reached $2.1 billion.
These three pure internet plays had enormous financial investment and other types of support from the business interests of the Packers and Murdochs, fathers and sons. These online minows of the late 1990s were for years competing against the Fairfax company and its rivers of gold in classified advertising from The Age, The Sydney Morning Herald and other publications. They caught up and by 2013 vastly exceed Fairfax in market capitalisation.
Surprisingly for a business book that has gone through a great deal of editing, the Williams’ book never mentions the disruption thesis of Clayton Christensen. The Fairfax fall in value is a classic illustration of Christensen’s widely praised book – The Innovator’s Dilemma, from which emerges what Wikipedia terms disruptive innovation.
Also surprising is there’s no context provided outside the hothouse of emotion in a tale told as revolving around the Murdochs, Packers and Fairfax. So there’s nothing on information or advertising economics, search engines, affects on the internet on publications worldwide, or what really went on building three job, car and house sales online Davids that slayed the Fairfax classified advertising Goliath. We are told however that Lachlan and James respectively “got” the internet more than their fathers and that’s useful to know as it is a reminder of the great need to always question one’s belief systems.
Williams’ book plays to its genre, which focuses on dialogue, plot, motivation and human passions. Sure, people in business are human beings hence they too are motivated by emotion. Rationality is only part of the mix. The Packers and the Murdochs have found reason, for generations, to see the Fairfax dynasty, and then company, as their foil. So the Williams tale plays to this and the themes for the Packers and Murdochs of revenge, getting even, slaying the Fairfax competitor.
The cover of the book features James Packer and Lachlan Murdoch, both of whom attended the book’s launch. That’s telling you something, as is the fact that the book is published by the Murdoch arm, Harper Collins. I should know, I too was a Murdoch employee in my first job as legal office at Angus & Robertson Publishers.
Williams has worked to her strengths. She has collected a mountain of dialogue and event notes from personal interviews with the players. Her who’s who list is very long and includes James Packer, Lachlan Murdoch, Paul Bssat, Andrew Bassat, John McGrath, Fred Hilmer, Ron Walker, Kim Williams, David Gonski, David Kirk, John B. Fairfax, Kerry Stokes, Rupert Murdoch, Roger Corbett, Lloyd Williams, and Nigel Dews.
Ultimately it is a disturbing book because yet again we have an Australian business book focused on brutal emotions at play. Could not these stories be told differently? Perhaps this is what book readers buy. Perhaps this is the culture in which we live.