I read this morning about Fairfax Media selling its jewel in the crown 51% stake in TradeMe.co.nz. My first thoughts are that this is pure suicide from Fairfax. TradeMe is a very successful business that brings in valuable revenue but also valuable learnings on the Digital Media landscape. Sure New Zealand is more isolated than most places but they certainly know how to do online, and TradeMe is a prime example of that, keeping eBay out of the country! Who Else has done that around the world?
So why would Fairfax sell such a valuable asset? I understand reduction of debt so they can invest in other digital media assets but why sell the cash cow?
When working for the Trading Post as their National Sales Manager of General Merchandise Online, we were going through a massive transition towards Online and the print side of the business was really not performing or making money, yet despite this, the print Sales & Marketing teams were reluctant to 'cannibalise' their existing print business (maybe job preservation?). I pushed pretty hard to have the business focus more on the Online side of the business and transition as quickly and smoothly as possible but nobody wanted to listen or co-operate. Despite us being on the same team, our 'Online' side of the business was on the outer. We continued to bleed money chasing the print business. Large staff numbers were the biggest overhead that could have been reduced dramatically if we had of gone full power towards Online. And there was good management in place for the digital side of the business!
Of course it was inevitable that the print version had to be closed but ti still took another 3 years or so after I left. In the mean time it continued to make losses.
This brings me to the main question. With the rise and rise of digital media, when is the right time to transition your business from traditional print to digital, or can you continue to do both?
Just stopping one and going to the other could be disastrous and even fatal. I know how long it can take to build an online business and build a revenue stream from it, so where is the 'tipping point'?
I think it's obvious! When you're traditional business model isn't making money, you've left it too long but when there is an obvious decline in traditional media revenues and an increase in new digital media revenue streams, shift your focus very sharply! Hire the people with the right connections and experience to build your online media profile very quickly!
At least it appears Fairfax are looking to hire very good people to take them forward with Digital Media in mind. Good luck to them!
So why would Fairfax sell such a valuable asset? I understand reduction of debt so they can invest in other digital media assets but why sell the cash cow?
When working for the Trading Post as their National Sales Manager of General Merchandise Online, we were going through a massive transition towards Online and the print side of the business was really not performing or making money, yet despite this, the print Sales & Marketing teams were reluctant to 'cannibalise' their existing print business (maybe job preservation?). I pushed pretty hard to have the business focus more on the Online side of the business and transition as quickly and smoothly as possible but nobody wanted to listen or co-operate. Despite us being on the same team, our 'Online' side of the business was on the outer. We continued to bleed money chasing the print business. Large staff numbers were the biggest overhead that could have been reduced dramatically if we had of gone full power towards Online. And there was good management in place for the digital side of the business!
Of course it was inevitable that the print version had to be closed but ti still took another 3 years or so after I left. In the mean time it continued to make losses.
This brings me to the main question. With the rise and rise of digital media, when is the right time to transition your business from traditional print to digital, or can you continue to do both?
Just stopping one and going to the other could be disastrous and even fatal. I know how long it can take to build an online business and build a revenue stream from it, so where is the 'tipping point'?
I think it's obvious! When you're traditional business model isn't making money, you've left it too long but when there is an obvious decline in traditional media revenues and an increase in new digital media revenue streams, shift your focus very sharply! Hire the people with the right connections and experience to build your online media profile very quickly!
At least it appears Fairfax are looking to hire very good people to take them forward with Digital Media in mind. Good luck to them!
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