Maverick journalist Stephen Mayne was one of Australia’s first independent online media entrepreneurs, selling his subscription newsletter Crikey.com.au for $1 million in 2005.
But he has not been able to find a sustainable business model for his new online venture, The Mayne Report. He tells Amanda Gome why he is so gloomy about the future of journalism, why News and Fairfax have got it wrong, in what form journalism can survive and why, at 40, he plans to stop throwing rocks at companies and instead climb “inside the tent”.
Amanda Gome: Stephen, you are very entrepreneurial. Crikey was really one of the first of its kind, an online subscription newsletter business that focused on politics and current affairs. Do you regret selling when you did?
Stephen Mayne: No, I think selling it was the best decision that I made with Crikey. It was a big five year struggle to get it where I got it to with the support of a great team and then it needed to be professionalised.
AG: And why couldn’t you professionalise it?
SM: Well, I don’t think I had the media skills or administrative skills or the capital to really develop the advertising side of it and properly resource it. So I think the decision to sell and put it in the hands of some real professionals with some capital and some greater entrepreneurial expertise than me in running media businesses was a very good decision which had benefited all stakeholders. [Mayne sold it to well known publishers Eric Beecher and Di Gribble who are also shareholders in SmartCompany.]
AG: Good on you for knowing when it was time to go because most people don’t, stay way too long and kill what they created. But what were the signs that you needed to move on?
SM: The arrival of our third child. Running a business from home with three children under four was a pretty challenging environment and I could never see myself getting out of credit card debt and creating capital. It was always a good little cash flow business but it was never going to produce significant cash flow profits and I just thought I had taken it as far as it could go.
AG: You sold it for $1 million. Do you look back and wish you had sold it for more?
SM: No, in hindsight I think that was a very good price. It never really made much money while I had it. I wouldn’t have made much money if I had kept it and I’m not sure if it makes that much money today. Crikey has always been a far bigger brand than it has been a business.
AG: The current stakeholders have tripled the revenue and it is definitely growing.
SM: Oh they’ve tripled everything. When I had it I think revenues were around $400,000 and subscribers were about 5000 and I think now it’s more than 12,000. So everything has grown substantially but it still is, in media terms, a relatively small business and I don’t think it’s ever going to make a lot of money. It always has had an element of being a labour of love for people who are in the journalism and the influence business who love the debate. And I think the current proprietors certainly love that aspect – that business -and have given it the nurture and the resources it needs.
AG: News Ltd has just launched The Punch (www.thepunch.com.au)… is competition going to grow in that space? Overseas of course you’ve got some really strong brands, The Huffington Post for example, in that space.
SM: Well I think like all things online it’s very much about the first mover advantage. Whether that’s realestate.com.au, seek.com.au or Crikey.com.au and I think that’s one of the key assets that Crikey’s got. It’s going to be 10 years next February. It’s a very, very well known brand. It’s got a wonderful email database and the killer application with Crikey has always been the email delivery and there’s still remarkably very few people doing email delivery when email remains the number one killer application for web content delivery in my opinion. So, I think Crikey is in a great position with its brand and with its email database and with its black book of contributors – a wonderful list of contributors.
AG: There’s an ongoing debate about the future of news, print, online. Rupert’s come out and has said newspapers will be dead in about 20 years and that he’s got to look at charging. What do you think he’s doing?
SM: Well I think he’s finally woken up that he’s blown several billion dollars of his shareholders’ funds buying dinosaur print operations like the Wall Street Journal and even The Courier Mail, which News bought for more than $2 billion four years ago. It’s the world biggest newspaper company and clearly now he’s desperately trying to salvage some value by embracing the online space. But I’m very much of the view that the internet is destroying value substantially, that Google has hoovered up the vast majority of the value online, that the transactional businesses like the Seeks and the Realestate.coms have obviously found some excellent niches. But I’m very pessimistic about the whole advertising model supporting journalism online and also about the idea of being able to resource online journalism or even get people to pay. It’s a hard struggle getting people to pay online for journalism.
AG: So what happens to the industry then?
SM: Well I think the industry will be challenged and it will have pared down budgets and I think it’s a major crisis for quality journalism through newspapers as we’ve known it. I think content providers or journalists all over the world are already substantially reducing their pay rates and their asking prices for their content. That’s just a reflection of the structural changes we’re seeing because of this, and I am a believer that quality journalism will need to be supported philanthropically and, to a degree, by government, as well as having some advertising supported and commercial operations.
AG: The Government already supports some of the mainstream papers through massive advertising campaigns.
SM: And ABC Online is one of the most successful, I mean the ABC pod casting record is world class. The likes of Robin Williams have got millions of people tuning into their pod casts, so the ABC is a terrific example of the future of quality journalism online. I mean it’s government funded, it’s quality, it’s going to the world and it’s important for the nation.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
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