Nothing dull in digital

Morris Kaplan

Morris Kaplan is a guest blogger.

Morris Kaplan, one-time stockbroker and venture capitalist, brings his finance skills and recent experience as a business journalist and writer to IT, with a special interest in telecoms and how communications is being transformed by technology.

Whatever else can be said about the world of digital communications, the one thing that can’t be said is that it’s dull. Reports that the NBN will cost taxpayers 24 times as much as South Korea's but deliver just one tenth the speed, may be just the silver bullet that the Coalition’s communications minister, Malcolm Turnbull, needs to “destroy” the government’s case for a national fibre-based broadband network.

Two other events earlier this month should act as lightning rods to entrepreneurs, publishers as well as advertisers who may be on the sidelines waiting for a sure sign of where the money is going.

The first is AOL’s placing of big hopes and money in columnist Arianna Huffington with its $US315m purchase of The Huffington Post announced this week. The second, and just a few days earlier, is News Corporation chairman Rupert Murdoch unveiling of the media company's much-anticipated iPad publication, The Daily, in another move that will test whether consumers of news will pay for digital content.

A paper released by the Economist Intelligence Unit criticises Labor's broadband network on a range of fronts, including its cost per household covered, cost and regulatory provisions to deliver a final ranking; because of "the huge cost to the public sector" of the NBN. Watch this space.

On the digital media front, Murdoch’s investment in The Daily may be relatively small but is nonetheless significant. The Daily is of particular interest to media watchers given it is the first app to make use of a new subscription model in Apple's iTunes store. It will cost US consumers US99c (98c) per week or $US39.99 for a year's subscription and will cost News Corporation $US500,000 a week to operate.

Speaking at a launch event at the Guggenheim Museum in New York, Mr Murdoch was reported to have said the iPad had the potential to "completely re-imagine our craft" and predicted The Daily would meet the challenge of taking "the best of traditional journalism — shoe-leather reporting — and combine it with the best of technology".

As reported by News Limited, The Daily is a made-from-scratch US news publication featuring traditional newspaper offerings such as crosswords as well as video, social networking and interactive elements such as localised weather or sports coverage.

More noteworthy in simply dollar terms is the price paid by AOL for Huffington’s company. It's paying $315 million to buy her news and opinion site, the Huffington Post, and anointing her as its next best hope to orchestrate a long-awaited turnaround at an Internet company that lost its way a decade ago.

Huffington has a contemporary list of titles including technology sites Engadget and TechCrunch, Patch.com's network of suburban news sites and online mapping service MapQuest. Combined with the Huffington Post, the sites will have a total audience approaching 300 million people worldwide.

To date, subscribers to pure digital content such as offered by The Daily, The Wall Street Journal, and The New York Times have been hard to come by. Perhaps what is emerging is a good old fashioned land grab which eventually will be sold of in micro pieces to willing advertisers happy to be marketing to these AB demographic eye balls.

Tags: NBN, advertising, media companies

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