Out With A Bang

‘When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to….

‘It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future…’

Those two lines come from Clay Shirky’s essay on ‘The Collapse Of Complex Business Models’. Along with his ‘Right now in media nothing works, but everything might…’ it is a piece of Shirky lore that I have kept close to my heart in the six years since I left the complexities of being a provincial football writer on the back pages of the Norwich Evening News and sought to figure out ‘how to work simply in the present…’

Freed, for once, of staining wood and getting an 11-year-old on a bike to deliver it.

But it is to Shirky’s thoughts on the ‘Collapse Of Complex Business Models’ that I turned as David Montgomery returned to the UK media landscape with a wad of Crispin Odey’s hedge fund money in one hand and plans for a ‘Local World’ in the other.

For the last two years, the one-time Mirror Group and Mecom CEO has ‘escaped the old system…’ and has, one presumes, spent his time since figuring out how he, too, might ‘work simply in the present…’ and, thereby, gets to say ‘what happens in the future…’

Roy clearly believes that to be the case: ‘If Local World gets off the ground I think this could well be a major turning point for the whole industry… was his parting line in the MediaGuardian piece.

With Northcliffe and Iliffe in play and TrinityMirror kind of at the table, PaidContent crunched some numbers as to the scale of Montgomery’s likely empire; NewsQuest and Archant are keeping their powder dry; JP are out of the running.

Ashley has the bankers snapping at his heels. His thoughts are solely focussed on keeping those wolves from the door.

So, for now, Montgomery could command the heights overlooking some ‘260 plus’ local websites. Or rather the audience that they draw on a daily basis. I suspect Montgomery’s own numbers will not have stretched to the number of paper boys and girls he now has at his disposal. Marshalling that 19th Century army is one distribution problem he can do without.

But the Ashley piece is interesting; not just for the recognition that his first masters are now the banks. Keeping the Sheffield Star out of the hands of RBS, for example.

It was the line from the ‘analysts’ that caught my eye; someone who clearly still views the world from the ‘top down’… and will have crunched his numbers from the prospective of dropping a Deloitte’s ad onto the streets of Morpeth or – in the case of GMG and their abortive foray into the world of local – dropping a generic bra ad onto the streets of Leeds. Stickability in that local space wasn’t one of their strengths.

But here we go… the expert’s opinion on the merits of LocalWorld: “Local World is not big enough in and of itself to make a difference,” said one senior industry executive.

“It needs another big player, not small deals. Consolidation is about cost synergies – the bigger it can get the better it can operate titles that might otherwise be uneconomic. At its current size it will not be any bigger in the market [than Northcliffe is on its own]; it will still be probably fourth by revenue and that is not enough.”

That statement is based on several, potentially false assumptions.

That in his two years in the wilderness, Montgomery hasn’t brought a spot of rational thinking to bear on the irrationality that is the current, fractured and silo’d nature of the provincial newspaper industry in a web setting.

LocalWorld could make a huge difference *IF* it masters ‘how to work simply in the present…’

Montgomery has, after all, escaped the ‘inflexible institutions’ of old; he can come back into the market-place with a far freer hand than a Highfield whose hands are so tightly tied by the banks.

Consolidating is, indeed, about ‘cost synergies’ ; but if you view the world as turning ‘bottom up and collaborative – as Cindy Gallop does - then the cost synergies of, say, out-sourcing your advertising sales to a third party on an automated commission basis makes for completely different numbers.

Again, the assumption would be that the ‘complexities’ of integrating three, competing ad platforms out of Northcliffe, TrinityMirror and Illiffe would in itself produce little by way of immediate savings and synergy; you would be back to rewarding the ‘complexities of the past’ as three, ‘top down’ ad networks and their various inventories were re-routed into a new, unified and simplified LocalWorld platform that was designed to encompass 260-plus local websites.

Addiply currently hosts some 2,800 local UK websites - one for nigh-on every postcode district in the UK. The challenge for the AboutMyArea platform is not its scale and its simple, elegant spread – rather the audience numbers that sit behind say, http://aboutmyarea.co.uk/mk17

But that’s just what Montgomery, Odey and Co are buying – audience and eye-balls; bums on local seats.

As for the revenue numbers, again if you base your calculations on failing CPM returns from dropping a Deloitte’s ad into Morpeth and not the c£104,000 worth of locally-sourced, tenancy-based digital display advertising we have sourced for MyFootballWriter over the last six years, then maybe our David is not about to turn the provincial newspaper industry in this country upside down.

Views the world in the same way as me, Ms Gallop, Ms Bell, Mr Schmidt and Mr Shirky do, and Monty just might get to have his say on ‘what happens in the future…