A new news beast: Newsweek goes digital

In an interview that could easily have passed for Fox talking to Murdoch, the Newsweek Daily Beast Company sat down with its editor-and-chief and founder Tina Brown to discuss the end of print at the venerable magazine Newsweek.  Newsweek fell into the hands of Brown and Beast two years ago but have been unable to resist sliding circulation and rising costs. The last print edition will be December 31.

Brown was on “Newsbeast” this week seated next to the company’s new CEO Baba Shetty as they said why Newsweek was shedding staff and its print publication.  For Brown, it about protection, both of journalists and content. Senior suited-up columnist John Avlon lollypopped his bosses with the opening question phrased as a statement: “So we are taking the bull by the horns, going all digital…”

“We are,” replied Brown.  “We must embrace the future.”  
Newsweek was 80 years old, she said. and it was time to start looking at the next 80 years.  

Brown, like many editors before her, conceded defeat for print.  

The industry has reached a tipping point and it was no longer a case if but when, she said.

And “when” said Brown, might as well be “now”.

“We decided to take away the when and…embrace it, be ready for it.”

Avlon turned the discussion to Shetty with management speak.

“Being proactive not reactive is always a good idea…”

“Yes,” replied Shetty, who unlike Avlon, was dressed down with a jumper and shirt.

The new CEO, a “brand guru”, said Newsweek was a great brand and a powerful media icon but was encumbered by “the form factor” and its economics. Taking away issues of physical printing distribution and circulation by porting the core product to digital would be “incredibly liberating”, Shetty said.

Consumers were moving to digital and advertisers would want to be there to grab these audiences, he said. Tablet devices, web usage for news, and social news meant it made perfect sense for Newsweek to now go “completely native on digital”. 

Brown gave an economic rationale to back it up. She said it cost Newsweek $42m a year to print, manufacture and distribute "before you’ve even paid one writer or one intern".
“That’s an enormous albatross,” Brown said.

“We thought it was more important to protect the journalists, the contents, the photographers, the ideas.” 

Brown said she wanted a digital Newsweek to focus on the marketplace of ideas.

But how then, would it be different to the Daily Beast, also entirely online, asked Avlon.

Shetty said they were “incredibly complementary".

In four years, the Beast had gone from a start-up to a site with 15 million visitors a month, up 70 percent since 2011, a huge spike in readership and engagement.

Many were “lean forward, participatory, multiple visits a day,” Shetty said. “The Daily Beast is indispensable in many people’s information diet.”

A healthy portion of this traffic was generated each week by Newsweek’s strong original journalism. Newsweek, said Shetty, “a step removed”,  offered more considered, thoughtful, long-form journalism. 

Brown said the the Daily Beast and Newsweek spoke to “the same reader in different moods”.  The Daily Beast offered news that was “hot and happening” while Newsweek appealed to the ipad reader on the train home. But, she said, they offered the same sensibility: reflection, context and “a thorough look at what was happening in the world”. 

Avlon steered the conversation to the new brand: Newsweek Global.  CEO Shetty called it a terrific new perspective and described who the product would appeal to: “The mobile, highly informed, highly engaged, person very aware of what is happening over the globe.”

He said removing legacy print, meant Newsweek could re-interpret what it could be in pure digital form. Brown said the Daily Beast now appealed to a similar global reader who lived in India, London or Brazil.

Brown said one of the focuses was on “really powerful live events” including ones they had organised like Women in the World. which has an associated foundation which last week launched a campaign for education of girls in Pakistan with Angelina Jolie, hot on the heels of the shooting of 14-year-old education campaigner Malala Yousafzai.

All aspects of the company, said Brown were “now playing together” but print was the anomaly. Getting rid of it went with “enormous regret” as some “incredible brilliant talent” would be leaving the company but it was “the right decision for the company.” Avlon concluded that in terms of content that was “good news for journalists” and an exciting new opportunity” before nodding to the camera to end the interview.

The Daily Beast article that went with the video, gave some statistics to back up the “tipping point” :

There are now 70m tablet users in the US, up from 13m in two years. A further explosion of use is likely, especially as two in five Americans get their news online, a number that is also growing.

“Exiting print is an extremely difficult moment for all of us who love the romance of print and the unique weekly camaraderie of those hectic hours before the close on Friday night,” the article concluded. "But as we head for the 80th anniversary of Newsweek next year we must sustain the journalism that gives the magazine its purpose—and embrace the all-digital future.”

Clive Palmer: last sentry

Clive Palmer continues to hold a fascination for Australian politicians and the media alike. Prime Minister Julia Gillard invoked his name in her revenge attack on Campbell Newman's Queensland LNP Government. Gillard made a long speech to the Queensland ALP conference yesterday but it was the reference to Clive Palmer (curiously left out of the official transcript) that gave the Brisbane Times its lead. "Even Clive Palmer is having doubts," Gillard said. "You know the ship is going down pretty fast when the bloke who wants to resurrectthe Titanic is seen leaving it."

Gillard is referring to LNP life member Palmer dishing out on LNP leader Newman. Palmer has been on the attack since last week’s Queensland budget where the new government raised coal royalties. The near billionaire Palmer is directly affected through his China First coal project in the Galilee Basin which was cancelled in May though he cloaked his criticism in wider concerns. According to News Ltd, Palmer said “strikes, protest marches and royalty hikes were not good for the image of the state and would drive away investment.”

It is amusing to see Labor use Palmer as a tool of their propaganda after painting him so often as the bogey man. Wayne Swan was in his sights for much of that past 12 months, but the businessman has added the State Government to his grumbles. He is up in arms against both levels of government over his proposal to pump wastewater from his Yabulu nickel plant into the Great Barrier Reef protection zone.

Meanwhile the Queensland Government decision to award Gina Rinehart and an Indian consortium a rail corridor to the Galilee still rankles. Palmer and his Chinese partners have put their joint venture on hold due to the dropping price of coal. Luckily for Palmer, his enormous wealth is in iron ore not coal. His company Minerology painstakingly secured 160 billion tonnes of iron ore deposits south of Dampier in the Pilbara Ranges in Western Australia over 15 years.

Forbes estimates Palmer as being worth $795m making him the 29th richest person in Australia. Palmer said his father George, a successful silent movie star of the 1920s and radio pioneer, had the greatest influence on him. "Dad worked with the then Prime Minister Billy Lyons when he was in power, advising him on media stuff. He was probably the first of the spin doctors,” Palmer told the Gold Coast News. "He also set up train and buslines for transportation. He broke that monopoly that the state railways had. He was quite an amazing guy."

On leaving uni, George's son got a job in real estate in the Gold Coast. He quickly became their top marketing consultant, before setting up his own company, GSS Property Sales. With the Coast in the middle of a construction boom, Palmer thrived and was worth $40m before the age of 30. In 1986 he set up companies to buy iron ore deposits and trade oil. He became a close confidant of Joh Bjelke Petersen and an admirer of the way the Premier turned Queensland into a coal exporter. Palmer was considered the architect of Joh’s final election victory in 1986.

Palmer also met Soviet leader Mikhail Gorbachev and set up joint ventures with Russian companies that persist to this day. Palmer also greased the wheel with Chinese interests and had to be very patient to make the deals work over many years. The lesson was to treat everyone with respect. Palmer said their collective decision-making process often allowed middle management more power than the managing director. But Palmer’s key skill was his sense of timing. As Griffith Uni’s Jason West said, thermal coal prices spiked to unprecedented levels allowing the likes of Palmer, Hancock and Forrest to experience profit margins beyond their wildest expectations. “Instead of earning margins of $2 to $10 a tonne as they had for decades, coal miners were now earning margins of $50 to $100 a tonne which in turn increased asset values to levels rivalling well-established and brand name top 50 firms,” West said.

West said Palmer had one income-earning asset and a whole bunch of tenements offering nothing but promises of future wealth. But some of those promises are extremely lucrative. They include the massive $8 billion Sino Iron Project at Cape Preston, 100 km south west of Karratha, WA expected to deliver before the end of the year. Owned by Hong Kong-based CITIC Pacific, it is on Palmer’s tenements and will be the largest magnetite iron ore mining and processing operation in Australia. The Sydney Morning Herald estimates Palmer will rake in half a billion a year in royalties on Sino Iron.

These are impressive numbers for someone who is still mostly regarded as a joke. Much of this poor public profile is his own fault due to his buffoonish tendency to act as a walking headline. Palmer is not shy about self-promotion and prefers to call himself Professor Palmer, courtesy of an honorarium from Bond University. Somewhat bizarrely, he has also been officially listed as a "national living treasure" though the National Trust of Australia offers no reason for this accolade other than the incorrect statement “Palmer is a self–made billionaire”.

Whatever his status, there remains the unfinished business of political ambition. In a Lateline interview last week, he attacked Campbell Newman for his lack of experience in business. “I'm the most successful Queenslander in the commercial world that's ever lived, yet I'm not supposed to have any say and any knowledge about that,” Palmer said. But while he has flirted with Katter, he still wants change from inside his party. “I love the LNP and I've been a supporter of it for 43 years,” he said. “I remain the last sentry at the gate to protect democracy in this country.” The question remains whether the sentry is there to guard the gate or attack the castle.

Birth, marriage and debt: Bankrupcty in Australia

If you are a man, in your early forties and single, then  chances are you are more likely to be bankrupt. That’s the finding of the Profile of Debtors 2011 a new report released by Insolvency and Trustee Service Australia.  This Government agency would know as anyone who becomes bankrupt must lodge a statement of affairs with ITSA. 

The law covers this off under the Bankruptcy Act 1966 which allows for trustees to distribute property fairly among creditors and prosecute dishonest debtors.  Bankruptcy lasts three years but can be extended. Since 2003 several patterns among bankrupts have been noticeable: they are mostly male (55:45), they are getting older, and they have less children than before. The primary causes are unemployment and economic conditions affecting their industry (particularly since 2009). The majority of bankrupts earn $30,000 or less and the size of their unsecured debt is increasing.
Despite their low incomes, almost half of them have unsecured debt of more than $50,000 and over a quarter per cent have unsecured debt of more than $100,000.

Over 23,000 Australians went bankrupt in 2011 and ISA constructed a profile of the average bankrupt last year. He was male aged between 35 and 54 years and single without dependants. It was his first time bankrupt. He earned less than $30,000 in the 12 months prior to bankruptcy (well below the $48,000 national average) and owed more than $20,000 mostly to the banks. He had no assets like property that could be used to repay creditors.  Tasmania and Queensland had the highest percentage of bankrupts and NT had the lowest. Three percent of bankrupts identified as Indigenous (who comprised  2.5% of the population). 

Nearly half of the liabilities is unidentified by the research with the “other” category responsible for 47% of all debt. Of the identified debt, credit cards were highest, responsible for 21 percent of unsecured debt followed by personal loans and house mortgage both on 12 percent. Credit cards also accounted for 18% of personal insolvency agreement debtors’ debt and a record 58% of debt agreement debtors’ unsecured debt.

 

According to ASIC, Australians have over $36 billion owing on credit cards, an average of $4,700 per card holder. MoneySmart’s Delia Rickard said paying off their credit card debt should be a top priority for millions of Australians.  ‘If you have $4,700 credit card debt (the national average) and only make the minimum repayments, it will take 49 years to pay it off and cost you around $14,600 in interest,” Rickard said. “But if you are able to pay off $250 each month, you’d pay off your debt in two years and save $13,700 in interest.”

Despite the RBA keeping interest rates at historical lows, banks still charge astronomical rates for their credit cards. Paul Clitheroe said the average card rate is around 17 per cent but many charge 20 per cent or more. “Monthly interest charges continue to eat away at household budgets making it hard to get ahead with card debt,” he said. “If you're serious about clearing card debt, one solution is to use a personal loan to pay off the balance.” Clitheroe said this would increase monthly repayments but the debt would  be paid off in three to five years depending on the loan term.

There are new rules in place since July 1 which will allow people be better informed against the scams the credit card companies use to fleece their customers. The company must now refrain from offering limit increases on cards, unless agreed, provide monthly statements that show how long it will take to repay the entire balance if you only make minimum repayments and provide clearer details on interest-free periods. All new credit cards must include: facts sheets to make it easier to compare offers, the capacity for consumers to nominate the credit limit, a ban on over-limit fees, notifications if you exceed your credit limit and repayments to the most costly aspect of your credit card debt first (such as cash advances) to reduce debt faster.

Going Platinum: Lonmin and the Marikana

The precious metal platinum is what catalytic converters use to convert the toxic by-products of petrol combustion to something less poisonous.  Platinum is not easy to find in the Earth’s crust and 80% of it is found in South African nickel and copper mines.  One of the earlier companies to see the value in these mines was Tiny Rowlands’ Lonrho. Rowlands was a classic self-made 20^th century capitalist who turned Lonrho from an obscure farming and mining company into a multinational conglomerate.

Rowlands had no compunction with dealing with apartheid era South Africa for which hypocrite Prime Minister Ted Heath called Lonrho “the unacceptable face of capitalism." But while Rowland was making enemies in London, he knew how to do business in Africa. He made many friends among black African leaders including Nelson Mandela, Kenneth Kaunda and Muammar Gadhafi. When Mandela came to power, he didn’t throw out Lonrho but instead bestowed on Rowlands South Africa’s highest honour the Order of Good Hope in 1996. 

By then Rowlands was on the outer at Lonrho after he financed a film exonerating the Libyans of Lockerbie.  In 1999 Lonrho refocussed on its mining core business and renamed itself as Lonmin. The focus of that mining was the wealthy Bushveld Complex of northern South Africa around Johannesburg, home to the world’s largest collection of platinum group metals. It was a money-spinning venture as platinum prices soared. Xstrata saw the value and bought up 30% of the company. Of the 245 tonnes of platinum sold in 2010, almost half was used for vehicle emission control devices.

But by then the bottom was starting to fall out of Lonmin’s market. In March 2008 the global financial crisis was about to strike and platinum was one of the first casualties. The price started to plummet. Lonmin were never big fans of unions and suffered constant safety stoppages because of accidents, numerous labour strikes, and unplanned plant and equipment shutdowns. Yet they were also protected by an ANC-backed National Union of Mineworkers whose leader Cyril Ramaphosa ended up on the board of Lonmin.

But as the NUM flirted with management, its membership fled to more radical unions. There was also simmering resentment from locals who felt they were not getting their fair share of the mining boom. Social welfare organisation Bench Marks Foundation said low wages and social disintegration, crime, murder, rape and prostitution, unemployment and poverty amid the third richest platinum mine in the world, created an incubator rife for worker and community discontent.

On August 16, Lonmin shares plummeted 7 percent on news an illegal strike had paralysed all its South African operations. At its flagship operation in Marikana near Rustenburg, 100km north of Johannesburg,  Lonmin threatened to sack 3,000 rock drill operators if they fail to end a wildcat pay strike.  Clashes between unions claimed nine lives, including two police officers. 

Jeffrey Matunjwa of the Mineworkers and Construction Union defended the strike action. He told Al Jazeera they couldn’t stand by while bosses and senior management were getting fat cheques. "And these workers are subjected to poverty for life,” Matunjwa said. He said despite 18 years of post-apartheid democracy, most of the 28,000 mineworkers were still earning $360 a week “under those harsh conditions underground."

Matters came to a head on August 16. Members of an elite South African police unit were called into Marikana. They opened fire killing 34 strikers and wounding 78 others.  It was the largest single massacre on South African soil since Sharpeville in 1960 and a bloody reminder South African police had never departed from their apartheid-era role “as the brute enforcer of state power.” 

Police claim the strikers shot first, for which there is some evidence and many strikers were armed. But there is also evidence the return fire from police wasn’t indiscriminate. The Daily Maverick  estimated the majority of those who died were killed beyond the view of cameras at a nondescript collection of boulders some 300 metres away from the protest. They said heavily armed police hunted down and killed the miners in cold blood.

The only charges laid have been against 270 strikers initially charged with public violence and later murder. These charges were laid under the doctrine of ‘common purpose”, an apartheid era conceit kept by the new rulers.  Their lawyers write to Prime Minister Zuma saying it was inconceivable the strikers would have killed their own people.  Last Sunday the Director of Public Prosecutions for the North West dropped the common purpose charges.  They didn’t explain why but defended the initial decision on “a sound legal principle” and a “prosecution duty” to go for the highest charges. 

Yesterday a court released 100 of the 270 miners as most of the unions signed a peace pact with a Lonmin desperate to rid itself of the unwanted international attention. One union and non-union workers have not signed up to the deal so it remains a worrying time.  Lonmin has been losing 2,500 ounces of daily production since the strike started a month ago. With the price of platinum recovering since July to the point where only silver has gained more this year among precious metals, every day of lost production is costing them a lot of money.  The company will be looking for its state links to do whatever it takes to get their mines operational again.