In many ways the O’Brien saga is a distraction from the stark reality facing a company that has put its faith in the longevity of newsprint and averted its gaze from the digital future. It has invested online, of course, but it is way behind many other newspaper companies.
The consequence of playing the digital ostrich is that INM is hurt more by the newsprint advertising downturn than those publishers who have been chasing online revenues fo several years.
Note the tone of INM’s trading update. While claiming that revenues were “marginally ahead in constant currency terms” so far this year, advertising conditions remained volatile in the second quarter. Volatile is usually code for problematic. So, in plain-speak, revenue is falling and likely to fall further in the second half of the year.
Baba O’Reilly replies:
Firstly, for the record, at INM we make no apologies whatsoever for putting our “faith” in newspapers/ newsprint, as our record 2007 results speak to (advertising growth, circulation growth and record profits)… On the face of it, that’s just good business and that might just appear to your readers to be a winning strategy (and perhaps, other media groups should follow our lead?)
Being at the vanguard of digital developments as we are, your somewhat strident (and mistaken) views on INM might have been suitably moderated by revealing (or at least reflecting) some of INM’s other digital ventures/ investments, such as the hugely successful creation, expansion and flotation (and subsequent profitable sale for c. €100m) of iTouch PLC (mobile content), as well as INM’s recent investments in price comparison (Germany), mobile VoIP, image search and online bingo/ gaming.