For many businesses, the Internet in the 1990s was a new frontier. Those that succeeded most during the early years were those who saw the new tool’s potential to increase profits, reduce costs, and help them stay ahead of their competitors.
In many instances, the Internet allowed smaller businesses to compete with, and in some cases overtake, larger established businesses, a point once acknowledged by media mogul Rupert Murdoch.
The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.
This proved to be the case for newspaper companies in New Zealand, and indeed globally, who jumped on this technology to compete for advertising dollars with TV.
“From the 1960s, newspapers were suffering from the advent of television,” says Keith Davidson, former General Manager of the Wairarapa Times-Age, and also a former employee of Murdoch’s.
“As more TV channels started broadcasting, more competition was created for advertising dollars. Technology was the means to save costs for newspapers and remain competitive with the new media.”
An Internet all-rounder
Keith is highly respected in the Internet community in New Zealand, and around the world.
He was a long serving member of the InternetNZ Council, having been a Councillor since 1998, Treasurer from 1999 to 2001, and Chair / President from 2001 – 2005. He then joined as head of staff in the position of Executive Director from 2005-2009 and has served as International Director from 2009 to now, which involves representing InternetNZ at international fora. On occasions, Keith has also been seconded on to NZ government delegations at various international meetings.
He has also served as a long time member of the APTLD Board of Directors, including terms as Chair and Vice Chair, and is also currently vice-chair of ICANN’s Country Code Name Supporting Organization.
Such a resume makes Keith an Internet master of sorts, and is far removed from his days as a newspaper accountant who keenly watched the development of the Internet through the 1980s.
“FTP was the thing that excited me the most about the Internet at first,” remembers Keith. “I thought this would be great to get around the logistics of remote printing.”
At the time, newspapers based in major cities were printed in several locations. They would transmit data to these remote-printing sites either on disk, which they would send by overnight courier, or via satellite – both very expensive and very slow processes.
“Quite often by the time the printer got the content it was already out of date. This new technology was giving the publisher the opportunity to deliver content right up to their press deadline, giving them the opportunity to deliver more current news and information,” says Keith. “That was a key driving force for us in this avenue of business expansion at the Wairarapa Times-Age.”
Integrating the Internet allowed newspaper to survive and prosper
In the following years, Keith says the Wairarapa Times-Age transformed itself from a struggling regional newspaper to multi-million dollar media, printing and communications organization predominantly due to its adoption of new technologies, and in no small part to its proactive use of the Internet.
“Of the daily newspapers, the Christchurch Press was the first newspaper in NZ to go online and the Wairarapa Times-Age newspaper was the second,” says Keith. “But we were the first to be updating news on a daily basis. And certainly the first to start multiple updates during the day.”
“We also started making quite big inroads into printing and publishing various small community newspapers and specialist publications for real-estate and car dealers.”
“Then in 1996 we established a commercial ISP—WISENet—to subsidize the expensive connection we had to the Internet – my main interest was to make and save money for the newspaper.”
Keith explains that they were providing more than access to the Internet to their users; they were also providing computer and network support and training to businesses and academia.
“As it turned out we did extraordinarily well from all these other new features of the business and went from turning over hundreds of thousands to many millions of dollars. In turn, it allowed us to expand press lines and we ended up hiring ex-staff to help with pre-press typesetting and page layout and design.”
“There was no solid business case for the changes, it was a transition in stages. The Wairarapa Times-Age was a newspaper at a point to either go backwards like so many newspapers at that time who were feeling the adverse impact of TV and the Internet, or to move forwards. If we hadn’t made the move to accommodate new technology and expand, it would have potentially been the death-knell for this newspaper.”
Editors note: The Wairarapa Times-Age was purchased in 2002 by Wilson & Horton, the publisher of the New Zealand Herald. WISENet was excluded from the sale as the buyer was not interested in running an ISP. WISENet was owned and operated by Keith for two years and was eventually sold to one of the larger ISPs in 2004.
Competing with the Telcos
As we’ve previously touched on in this series, New Zealand’s telcos were largely disinterested in the Internet in the early days – it wasn’t until 1999 that New Zealand’s dominant provider, Telecom New Zealand, began providing broadband Internet to its customers.
Keith remembers that their eventual entry was problematic for smaller ISPs as they sought to “shut the private market down by all sort of legal and technical means.”
“We [ISPs] tended to use 0800 numbers as dial-up numbers to the Internet until Telecom forced every ISP to migrate to a special dial-up numbers starting with 0867,” explains Keith.
Keith says this was in part to stop ISPs offering free dial-up Internet to their users, a tactic which was impacting on Telecom’s market share.
The result allowed larger ISPs to dominate and consolidate the market and now today, Keith predicts close to 90% of New Zealand’s Internet users connect via one of three ISPs, with only a couple of dozen smaller ISPs remaining.
“It’s the logical consequence of a growing industry; businesses consolidate, and the large tend to acquire the small,” says Keith. “However, it is a shame for New Zealand that we have been dictated to by the telcos because the Internet is probably one of the major opportunities for the future for NZ in terms of the weightless economy and diversity,” he says.
“New Zealand has a lot of very astute technical people who can be empowered by technology, as has been seen in the movie industry with Lord of the Rings, King Kong and The Hobbit.
“If we had really cheap and really fast Internet, I’m sure we would see many more of these technical folks combining with entrepreneurs, doing lots of interesting things that would contribute positively to our economy, unchallenged by our remote location geographically.”
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