Sky News Australian Agenda Kim Williams 24 June 2012

Interview with Kim Williams Australian Agenda program, 24 June 2012

Peter van Onselen: We are focussing in at the start of this program on the media and a real change in circumstances that we saw this week as a result of announcements by both Fairfax and News Limited. Late yesterday at the News Limited building I spoke to News Limited CEO Kim Williams. Mr Williams, there's been increasing reports about Kerry Stokes's resistance to your plans for News Limited in relation to Consolidated Media. Are you more concerned now about being successful with this than perhaps you were when you made your intentions clear? Kim Williams: No, I don't think I have any reason to be concerned. I think we've made a full, fair and entirely appropriate offer for Consolidated Media Holdings. I think it's very fully priced and I think commonsense will assert itself. I haven't yet had a conversation with Kerry Stokes and so I notice that most of the commentary this morning was just that, commentary, and I tend to treat commentary with respect but with caution. Peter van Onselen: Did you... Kim Williams:
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Until I speak to Kerry I'm really not willing to leap to any conclusions. Peter van Onselen: So you didn't have any informal discussions with him prior to the announcement? Kim Williams: No, not yet. Peter van Onselen: Is he holding out for more money or do you think this is about him genuinely having interest in maintaining a stake in pay TV? Kim Williams: Frankly, until I have a conversation with him and with Peter Gammell, I don't know. Peter van Onselen: I'm interested in a strategy, obviously as an interested party myself in the convergence side of the business. Now, Stephen Conroy the Communications Minister has come out and said that he thinks newspapers at best probably have a five-year life expectancy. Do you reject that? Kim Williams: Yes, I do reject that and I think Stephen's crystal ball is a heck of a lot clearer than mine, which is odd given that he's not a media executive and I am. Hello Stephen, mean that in a warm and friendly way. But I genuinely am committed to our company being really fluent in all media and being fluent in all media today is the way in which you stay relevant and you stay financially sustainable. So we really need to have - have a real excellence in print, in online, in smart devices, whether they are mobiles or tablets, and of course in social media and broadcasting. And all of those media have

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very active rich lives and our journalists need to be very fluent in all of them and digital literacy is at the heart of it. Peter van Onselen: And that also leads to this idea of bundling. It strikes me that there are enormous opportunities perhaps for News Limited in relation to bundling content, be it pay TV and its print product and if it sort of packages it up to sell it that way, that could, would you agree, perhaps be one way to try and mitigate against declining print circulation? Kim Williams: Look, I'm a big believer in bundling and certainly one of the most interesting bundles that has been developed in print technology is bundling print with digital versions of print media that are actually living 24 hours a day and in the print version is the morning version, or in some instances the afternoon version as in things like mX. And so I'm a great believer in seeing products like that that are bundled together. It's worked very well for the 'Wall Street Journal', it's worked very well for the 'New York Times'. In fact, really very well, to the tune of hundreds and hundreds of thousands of subscribers. Peter van Onselen: Just looking at the two announcements during the week it struck me that the Fairfax announcement did seem more dire than the one by News Limited. It raises this idea of potential further acquisitions if Fairfax was broken up. Would you be interested for example in the 'Australian Financial Review' if it was on the market? Kim Williams: Well, we already have a national publication in 'The Australian' and our investment's going into the masthead that we are committed to. 'The Australian' is a 48-year commitment on the part of our company and, in fact, I was talking with Chris Mitchell recently about how much we're looking forward to celebrating the 50th anniversary in
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2014. I think it will be a very big year for 'The Australian' in all of its guises, so I think our concentrated effort will be investing in 'The Australian'. Peter van Onselen: So that's no interest in the 'Australian Financial Review' if it was up for grabs? Kim Williams: Well, I imagine that Rod Sims would have issues in terms of us looking at a national publication like 'Fin Review'. Peter van Onselen: If I could just go back to the issue of bundling in relation to other possibilities. One is Sky News being taken over wholly by News Limited. Now you're the chairman of Sky News. Is that something that could potentially one day be on the cards as an added progression, if you like, in the changing processes of the media? Kim Williams: I'd certainly see that as a very attractive opportunity if that was to arise. I'm not sure that it will arise. Sky is owned currently by BSkyB in Britain and the 7 and 9 networks and I represent BSkyB's interests in relation to Sky News as chairman. Peter van Onselen: But you see that as perhaps an attractive element of this... Kim Williams: I think broadcast news is a no-brainer for our company and certainly we've been able to house Sky News bureau in Sydney, in Melbourne, in Brisbane, in Adelaide and also in Perth and that's something where we've seen a natural synergy. Peter van Onselen:
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Gina Rinehart is entering the media stage. Now, there's been various descriptions about what that might mean. What's your view? Do you see it as a good thing for Fairfax that she's taken an interest or do you see it, as some commentators have said, as problematic because it's all about perhaps influence peddling rather than profit? Kim Williams: Look, I think generally there's a marked degree of exaggerated hysteria attaching to much of the commentary currently which is pretty unhelpful to considered debate and analysis. I don't spend much time thinking about or commenting on Fairfax. I spend a lot of time building our company and building all of the journalistic products which we're investing in because, frankly, I think it's much more interesting. We are a very competitive company and we seek to do things better than others and to attract consumers because what we do is more aligned with consumer interests. Peter van Onselen: When Fairfax's Greg Hywood made his announcement this week before yours, one of the key factors was closing their print facilities. Now, I know that there's been the talk that they're going to use regional facilities. There's even been a suggestion of perhaps bringing it across from New Zealand. The other option of course is doing a deal with News Limited. Have you been approached about that? Is that something that you would consider were you approached? Kim Williams: Well, I think it would make a lot of sense. Peter van Onselen: He's approached you about that? Kim Williams:

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I've said so to Fairfax, but Fairfax don't seem to see that as a priority and clearly have made alternate arrangements and are pursuing a different avenue now. I understand they're looking at using the Ballarat facility for printing 'The Age' which is an old rural press plant and the Richmond facility for printing the 'Sydney Morning Herald'. They make their own decisions. In Britain News already produces the newspapers of three of our competitors in order to get a rational use of a very good print facility. After all, printing is completely indifferent to which newspapers it is. What one wants is a better efficiency from a printing plant in order to produce product at an affordable price. Peter van Onselen: Given the significant developments in the media this week, with the twin announcements, how relevant now, in this climate, is the original media inquiry, the one that came before the convergence review? Kim Williams: The Finkelstein inquiry, I have great difficulty understanding what that report was - was, in fact, provoked by or in service of. In fact, I think when Greg Hywood said it's inquiry in search of a reason, I think he was right. We have all been quite perplexed by that inquiry and I found the outcomes from that inquiry deeply troubling. Peter van Onselen: Do you believe that the Government is still interested in making some decisions that bounce off the media inquiry, or do you think given the changed circumstances I suppose from this week that we're looking at it in a new light given that the print media clearly is going through change in circumstances? Kim Williams: I think if Government was to take some kind of action to promote regulatory intervention in print technology at this stage in print's life cycle it would be a deliberate act of sabotage of free speech quite frankly and I look at it in very, very stark and
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severe terms of the advocacy that Finkelstein advanced for a new regulator that can impose conditions on journalists where journalists would be subject to imprisonment if they did not comply, where the regulator would not be compelled to publish reasons and where the decisions of the regulator would not be appealable is frankly so absurd and to cast it in such a Stalinist kind of position as I think to be deserving of no consideration whatsoever. Peter van Onselen: What does that say then about our body politic, if you've got senior politicians coming out and saying that they really think that there's something in this inquiry? Kim Williams: Well, I found it troubling that the Finkelstein recommendations did not receive the kind of extraordinarily ferociously severe response that they deserved. And I fear that most people didn't read it. I read the report three or four times and I read the summary and the recommendations probably 10 times, and I found that a remarkably superficial, at times quite trivial and entirely poorly-argued piece of work, if you can call it work, and I have to say that I think it did the proponents of that report who initiated the inquiry and the people who undertook the report very little credit. Peter van Onselen: In the new world of the NBN, once it's rolled out, I wonder what your thoughts are about whether you can see Australia emulating what really happened in some other parts of the world with this triple play idea that in terms of Foxtel I suppose and News Limited it could find itself in a position I guess where it's competing directly against Telstra. Do you see that happening? Kim Williams: Look, I think there are many, many possible outcomes in an NBN world. It's going to create a very, very different landscape in terms of the way we all operate. It's going to
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change the way in which we exchange information. It's going to change the way in which we charge for things. It will change the way in which products are packaged together and promoted to the public, and it will create a very, very rich array of possibilities for consumers. I don't think any of us know how it will unfold other than it will have the most profound impact on the way in which we deliver information and receive information. Peter van Onselen: So looking forward 10 years now, I realise that this is crystal ball gazing but what kind of company in that environment does News Limited look like? I'm talking about you've got the legacy side of the business, so-called, which is the print media, you've got the move into broadcast and the changes in the digital environment. 10 years on from now, what does it all look like? Kim Williams: I'd like to see us as the leader in news, opinion and analysis. I'd like to see us as a leader in a number of categories like business and sport. I'd like to see us as a leader in a lot of lifestyle categories because they're clearly of enormous interest to consumers and we provide a lot of information that's quite fundamental to consumer decision making in relation to all manner of life decisions, whether that's to do with money or whether that's to do with reaction. And I'd like to see us as a leader in categories like food where we have a very strong relationship with a number of advertisers and that's quite fundamental to underpinning our position in news, opinion and analysis. I'd like to see us as a company that reflects a real ideas factory and really being right at the heart, the crucible of a lot of debate and intellectual activity in Australian life and I'd like to see us as a company that is very much about innovation, that really is at the edge of the curve in innovation because that's where consumers want us to be. Peter van Onselen:

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So where does that leave the delivery side? So for example are we still likely to see the printed product? Are you expecting things like, in terms of apps for example you mention lifestyle, things like lifestyle apps that can pick out individual parts of what are currently in the overall paper? What are you expecting? Kim Williams: I think inevitably we're going to have a wide array of different products. We will have print products which are probably evolution - will have evolved from what they are now but they will be traditional print products, beautifully printed I might add and we have the best printed newspapers in the world which is something people often forget. We have the very best colour printing in the world in newspapers. We will have tablets, we'll have smart devices, fabulous smart devices with much better screens, much better video, 4G technologies. We will have a whole range of online products that will provide a rich array of niche services across many of the categories that are contained in a traditional newspaper today as stand-alone products. All of these things are part of a new kind of economic landscape because the most character-forming element of all of this transition is that a dollar in the physical world is worth roughly 18 cents in a digital world. So you need stacks and stacks of 18 cents to make up the dollar given that most of our cost structures are actually built around the dollar. Peter van Onselen: Just finally if I can, Mr Williams, I want to ask you about the ABC. Now it's increasingly got an online presence. Does this concern you, given that newspapers are increasingly going digital, is that a sort of virtual newspaper almost that the ABC is starting to increasingly put out by entering that space? Does it concern you in relation to its impact on the commercial side of the commercial media? Kim Williams: Look, it's a complex question and it's something that I'd be less than honest if I didn't say troubles me. The ABC is obviously a large employer of journalists and produces a
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lot of journalism; breaks remarkably few stories relative to the amount of money that's invested in it if I'm truthful and accurate and objective in assessing it, which is something I think the ABC is often not good at. The ABC has a remarkable appetite for self-congratulation in the most extravagant way. I am troubled by the fact that in many of its online offerings the ABC competes without actually having any of the accountability that its commercial counterparts do have and that's clearly awkward in an environment where many costs are pressured and where many employment pressures arise from that. At times I think the ABC is misplaced and misconceived in a lot of what it does. Peter van Onselen: It's just interesting because politicians are very quick to discount the idea of subsidising newspapers or indeed have a taxpayer-funded newspaper were newspapers as they exist now to go away altogether, yet here we have a situation where the ABC, the taxpayer-funded ABC is moving into that online space in terms of what it delivers and it strikes me that it's a virtual online newspaper right at a time where the commercial side of newspapers is increasingly shifting in that direction. Kim Williams: Do you know, one of the things that I find most interesting about online life is of course what differentiates our online life from ABC online life, is that we break news and we break thousands of stories each and every year. The ABC breaks dozens. The ABC is not a news-breaking organisation other than occasionally on '7.30 Report', occasionally on 'Four Corners' and occasionally on 'Lateline'. But that's it. The ABC is not a major news-breaking organisation. We do it for a living every day across our country, every day, every week, every month, every year, thousands of stories. Many of them are republished by the ABC online and on radio. Peter van Onselen: Those are some very, very strong comments about the ABC.
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Kim Williams: In making those comments about the ABC I would say there are many journalists in the ABC that I and my colleagues at News have a lot of respect for and I have friends in the ABC which I hope is not surprising. But at times one just has to call it to account in terms of the way in which one sees such preposterous statements from Mark in terms of saying that the ABC represents a vote against market failure. I think that was just a bit over the top. Peter van Onselen: Kim Williams, appreciate your company on Australian Agenda, thank you. Kim Williams: Real pleasure.

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