What the media chief executives are thinking

CHIEF executives Scott Lorson, Rohan Lund, Cathy O'Connor, Joe Pollard, John Porter, Greg Roebuck, Kim Williams reveal their thinking on the challenges facing their businesses this year in the third and final part of The Australian's annual CEO survey.

1: The Australian economy has been resilient by international standards on the back of monetary and fiscal policy interventions and the mining boom. Nevertheless, the lack of growth is weighing on consumer and business confidence, both of which remain fragile. Head winds in the US and Europe suggest more downslide risk, with debt levels restricting policy options. We expect consumer spending and advertising to be subdued in the 2nd half, with a sustained recovery for all that a full 12 months off. Key factors to watch in Australia are the drivers of confidence including real estate and equity values, unemployment levels, and petrol prices. Differed consumer spending and large cash holdings suggest the local recovery will be strong once the global situation stabilises.

2: FetchTV is currently gearing up for a significant growth phase, but, minimal incremental investment is required. The business model was designed to deliver a cost based competitive advantage by leveraging the combined scale of our partners to the collective benefit of the "coalition". The service and delivery model minimizes fixed and incremental costs by leveraging the ISP networks, sales and service capabilities, and customer relationships. Product technology will remain our focus, with cost efficiency a key competency and source of competitive advantage.

4: Winning hardware and software solutions are not about what they allow the customer to do, they are about what they allow the customer to do easily and intuitively. Apple deserves the current kudos for the iphone and ipad. But, the home entertainment gateway title is however vacant, and is one that we plan to contest.

6: The Communications portfolio is in a class by itself in its breadth, complexity, pace of change, and the degree of media scrutiny. The key is to develop a policy framework that promotes research, competition, and diversity of opinion, whilst as well providing sufficient regulatory certainty to encourage local investment. A bottle of scotch is suggested.

3: Wireless broadband research is having a profound effect on the way users consume media in and out of their homes. 69 per cent of Australian homes already have a wireless modem allowing media meshing to flourish and tablets, smart phones and smart TV penetration are all picking up speed. The NBN can only help accelerate that shift.

6: I would make it easier for the senior leaders and experts in the digital space to inform more of the thinking behind policy and regulation through a whole of government view. Innovations in research, devices and consumer behaviour will keep changing at an even faster rate. Issues just as cyber safety, privacy, cyber security and competition will keep evolving nevertheless the challenges will be the same no matter which government department and no matter whether its state or federal.

1: Radio is growing at 3.7 per cent this calendar year and that may come of a little, driven by agency earnings. With the entire ad market back usually I think that radio will demonstrate its resilience, as it always does. Retail is the largest category advertiser in radio, so the lack of consumer confidence driving weak retail is all the same the biggest problem for radio.

2: There is plenty of organic growth in our business from both product improvements and areas of new business including content syndication. Organic growth will be more limited for established media companies that aren't innovating in the digital space, or that aren't partnering with other media to provide cross platform solutions.

4: Has to be the iPhone and iPad for convenience and useability. The reasons for that are endless as there are so many practical uses for both. Google maps via iPhone continues to protect me, in any city, from my poor sense of direction!

1: There is a lot of positive change ahead for digital businesses which will drive revenue growth for our industry in this financial year with much of this growth driven by research, consumer's use of social and different commercialisation models. For instance, Ad Exchanges will enable more efficient trading of digital between publishers and agencies/customers and drive greater sophistication in targeting specific audiences. We will see a rise in the importance of data through this innovation evolution change and along these lines increases in revenue. Growth in penetration of mobility devices just as tablets and smart phones will open up commercial opportunities beyond traditional advertising placements. Sponsorship and subscription revenue will be the winners.

2: Revenues growth in 2011-12 will come from both top line revenue growth as then as continuing to drive operational efficiency. Earning our fair share of the display pie and diversification of revenue streams will continue to be important. Two major areas of growth for us will be Search and transactional businesses like Cudo. Investment in efficient cross platform publishing tools and automated trading platforms will help drive efficiency in digital publishers cost base.

3: On no account. Bandwidth is the oxygen of digital media. This is like the shift from dialup to ADSL or cable it without warning opens up possibilities. With that previous shift we had VoIP (Voice over Internet Protocol) and networked gaming and video streaming. We are excited about the opportunities that 10X the bandwidth will open up for us.

4: "Holding the internet in your hands", to use Steve Jobs' phrase, is in the extreme exciting. It's a transformational shift for our industry. It makes people use and feel differently about content and services. Tablets and smart phones are the key to consumers being connected anytime, anywhere. They as well represent a shift away from participation driven experiences to Geo driven and consumption lead experiences and services. They as well don't have keyboards so it will completely change the way we think about interaction design, content acquisition and commercialisation.

2: The thesis for subscription TV continues to be the value proposition of entertaining your family at home in challenging times. The challenge for us will be to continue to expand the offering of exclusive, original, and so then packaged syndicated content in accordance with the umbrella of potent brands. If we can accomplish this at an even broader range of price points we can continue to expand our revenue 6 per cent 10 per cent. With penetration in the low 30 per cent range we are on the whole in the 'storming' stage of growth. We should take an informed approach to cost management nevertheless it is premature to rely on cost savings to deliver growth.

3: Yes and No. On the one hand, underestimate a competitor at your peril. On the other, it's hard to believe that a 10 year network build is going to have an effect on the industry we won't be able to plan for, manage through, or to tell the truth capitalize on. People don't engage with wires they engage with brands, programs, and personalities. In TV land old habits die hard and people are nevertheless watching the same way they were 40 years ago... Passively. Good companies will make the most of the new world.

1: We think the new careful consumer, wary of debt and frivolous spending, is only a temporary phenomenon. In the same fashion the current political uncertainty. But, the structural changes to media consumption are permanent and of far greater consequence to the advertising industry. The internet has changed the game forever. The rise of the conservative consumer only exacerbates the trend to shopping and researching online. If there are better deals and more information to be had online, at that time that is where the consumer will be. Marketing strategies and advertising campaigns need to evolve to embrace changing consumer behaviour.

2: Fortunately, we are on the whole enjoying the migration from print to online particularly in the display part of our business. The private seller as well continues to recognise the benefits that selling with carsales brings i.e. it works!, so we see growth continuing in this area as well. So 2011-12 for us will in any case not be about pulling back on costs.

3: There's a term 'macro-myopia' which recognises how we usually overestimate the impact of a new trend or innovation over the short-term. When the research fails to live up to its initial 'hype' we at the time turn around and underestimate its long term implications. I suspect that the NBN will display these exact same characteristics. The short-term impact will be less than the inflated expectations that surround it, nevertheless the long-term implications for our media landscape will be considerably more significant.

4: It is however very much about mobile and the capability that tablets bring to that market. As more and more people use web based services to put it more exactly than pc loaded software, this shift will accelerate. More and more people are finding they can do everything they used to do on their PC AND more on their mobile device. It is a compelling innovation that will continue to grow substantially. Mobile is already 12 per cent of our traffic and we've just launched a significant new editorial title for the iPad: motoring to address this market.

5: I loved the article "The Web is Dead" in Wired Magazine. It talks to the issue that more and more use of the Internet is outside of the browser just as via tools just as Kindle, iBooks and clearly the ubiquitous apps phenomena ... I genuinely think this will be more and more of how we use the Internet.

1: It is important to note that the advertising market is not necessarily weak at present we are just experiencing the tail end of a correction that has played out over the last three years since the start of the financial mess in '08. In the June quarter last year the television market grew by more 25 per cent so we are by nature seeing a correction this year. The long term growth trend is in line with expectations. Looking ahead we are anticipating little growth in the September quarter as the market growth in the corresponding quarter last year was for all that very strong at around 20 per cent. We expect to see stronger levels of growth in the December quarter and into the new calendar year. The structural changes occurring in the market will create challenges and opportunities and we see real growth potential for our business as the market continues to embrace new technologies. The biggest factor that will influence revenue growth in the immediate term will be the relative strength of the retail market and the level of consumer confidence and resultant spending evidently the relentlessly polarised approach to much political exchange today is less than helpful to consumer settings which is to be regretted. Expediency dominates too many public policy exchanges and it works to the national economic disadvantage.

2: Well obviously in our case we are currently managing a complex proposal for the acquisition of Austar which we see as being a central element in our future planning. We have made a number of major moves to invest in our product and build a better offering so as to drive stronger energetic organic growth as well the AFL rights deal and our fabulous On Demand product which follows from the internet enablement of over 1 million FOXTEL iQs are the most obvious examples however there are many many others.

4: The FOXTEL iQ does it for me every time fabulous device, simple, intuitive and now fully internet enabled for accessing a vast library of content! It puts the consumer in the box seat and when we add our second and third screen overlay straightway year it will be the market leader by a country mile.

6: The Broadcasting Services Act with a wholesale makeover that banished favouritism to the FTA networks, was innovation neutral and put the consumer front and centre of all policy settings and at the heartland of assessing performance within and from our policy landscape. The public interest will only be served by such an approach and it is way overdue.