Media beacons in the gloom

A week that is surely shaping as one of the most dramatic in the history of Australian media will take another turn this afternoon when News Limited announces what is tipped to be a dramatic cost-cutting program, including up to 1,000 job losses.

Coming so soon after Fairfax’s savage restructuring announcement, which will see 1,900 jobs go, it’s another big blow for the traditional media, which by now has officially shifted from the category of “struggling” to “beleaguered”.

But at the same time as News underlines its desperate bid to recalibrate its business model, it will also underline the fact that not all media models are broken.

As well as announcing big job cuts, News is expected to announce it has acquired business news media group Australian Independent Business Media, which owns the online publications Business Spectator and Eureka Report.

Here at Private Media (parent company of SmartCompany) we are firm friends with the guys at AIBM, led by chief Alan Kohler. In the past we’ve shared floor space, shareholders and a sales team, although we are now completely separate entities.

And while it’s sad to see AIBM lose the “I” (as in independent) from its title, we can only applaud their success engineering a sale tipped to be worth around $30 million.

Since its launch in 2007, Business Spectator has become an invaluable part of the business landscape and home to some truly great business and economic commentary, led by Kohler, Robert Gottliebsen and Stephen Bartholomeusz.

But the even bigger success of AIBM is Eureka Report, a subscription product focused on personal investment and the self-managed super sector.

Eureka Report provides a great example of a media model that works.

It is tightly focused. It has built a strong community of readers who deeply care about the product. It has real personality, driven by Kohler. It stands up for its readers, rebelling against excessive fees and dodgy deals in the financial planning sector. And, best of all, people are prepared to pay for it!

As SmartCompany founder Amanda Gome wrote yesterday, it is hard to understand why Fairfax particularly is moving away from this model in their restructuring efforts.

While centralising editorial functions into a national pool makes economic sense, it won’t make it easy for individual publications to have the personality, focus or sense of community that makes publications like Eureka Report – and SmartCompany and all the sites we publish here at Private Media – resonate with readers.

Newspapers (and their websites) with a more national focus also won’t do much for advertisers, who increasingly want to target communities, not just hit massive audiences.

There are signs News is getting this, as shown by its acquisitions in the last year of KidSpot, BestRecipes and now AIBM.

The other media deal signed by a big Australian company this week comes out of the US, where Telstra has invested in a $35 million funding round by Silicon Valley video streaming group Ooyala.

Telstra’s stake is small presumably, but Ooyala also says it expects Telstra to become one of its biggest customers. The company offers online video publishing, management and analytics services; it expects Telstra will resell its products to companies in the Australian market.

These are small media deals to be sure – nothing compared to the giant media organs that Fairfax and News are trying to restructure. But they do underline that community and technology lies at the heart of the emerging media models.