Anton Harber

Johncom at the crossroads

2006-11-03 09:07

Anton Harber

Major media group Johncom is being pulled in two directions.

On the one hand, at an operational level, a dynamic product development team led by former Sunday Times editor Mike Robertson is cooking up some interesting new ideas. The latest is "Sunday Times every day" - a plan to deliver a daily version of the country's most successful newspaper free every day to subscribers of the weekly.

The Sunday Times newsroom is buzzing with the plan, though editor Mondli Makhanya says that it is just one of "millions" of ideas they are considering and have not acted upon.

It is true that there are other ideas being worked on and researched, such as newspapers in indigenous languages in areas such as the Eastern Cape. The success of Independent Group's isiZulu paper, Isolezwe, in KZN, has raised interest in this kind of product.

It is also true that their board has not yet given the go-ahead on the new daily newspaper, but I can tell you that inside their Rosebank building, they are seized with the plan.

I am not surprised, as it is - in some respects at least - quite brilliant. They will have, from day one, a newspaper with 130 000 wealthy subscribers and will try and spread their extraordinary weekly success to a daily market.

But it is also high-risk, as a loss of focus at the Sunday Times could cost them dearly. Running a daily out of a weekly newsroom is extremely difficult, if not impossible (ask me, I have tried and failed when we launched the Daily Mail out of the Weekly Mail in 1990).

The heavy print and distribution cost will still demand a large investment to get a new paper going before the advertisers buy into the idea.

Restless shareholders

On the other hand, restless Johncom shareholders are pushing for more short-term gains from the company. In particular, the fund managers with significant Johncom shares - Allan Gray, Coronation - are tired of waiting for an empowerment deal which seems to never come to fruition.

These fund managers expressed grave concerned over the recent controversial dismissal of CEO Connie Molusi. But something happened behind closed doors, because they went quiet on this issue and - without much fanfare - elected representatives to join the board.

Clearly, these fund managers have joined the board with an agenda, and you don't need to read the Hogarth column to know what it is likely to be: the quick realisation of value locked up in this giant and diverse company (with interests ranging from Exclusive Books to NuMetro).

So, it is not a coincidence that the board is now considering an offer from Naspers to buy Johncom's stake in MNet/Supersport. And that Caxton has had approaches to buy back the chunk of their equity in the hands of Johncom.

These are two of Johncom's most lucrative assets (along with the Sunday Times) and a sale would presage the break-up of the group for short-term gains.

Which is it to be: bold long-term plans to launch new products, or quick and short-term gains for shareholders? There is a fundamental contradiction here, and how it plays out will have a major impact on our media industry.

  • Anton Harber is Caxton Professor of Journalism and Media Studies at Wits University.

    See his blog at www.theharbinger.co.za

    Send your comments to Anton

    Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

    X
    NEXT ON NEWS24X

  • SHARE:

    24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

    Comment on this story
    0 comments
    Comments have been closed for this article.

    Inside News24

     
    /News

    Book flights

    Compare, Book, Fly

    Traffic Alerts
    There are new stories on the homepage. Click here to see them.
     
    English
    Afrikaans
    isiZulu

    Hello 

    Create Profile

    Creating your profile will enable you to submit photos and stories to get published on News24.


    Please provide a username for your profile page:

    This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

    Settings

    Location Settings

    News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




    Facebook Sign-In

    Hi News addict,

    Join the News24 Community to be involved in breaking the news.

    Log in with Facebook to comment and personalise news, weather and listings.