By Shane McGinley
Tom Glocer, CEO of Thomson Reuters only sees opportunities, despite the competion to global media outlets.
Advertising revenues are down and the likes of Twitter are competing ever more with global media outlets. Yet, Tom Glocer, CEO of Thomson Reuters, only sees opportunities.In 1865, it took twelve days for news of the assassination of US president Abraham Lincoln to cross the Atlantic to London.
In the age of Twitter, Facebook updates and 24/7 rolling news, it seems difficult for us to comprehend such a delay.
It is therefore hardly surprising that this is one of Tom Glocer's favourite stories to tell his staff at Thomson Reuters as it clearly shows how much the news industry and the company has changed over the last 145 years.
The story goes that news of the assassination was transported in mail boats across the Atlantic and an enterprising Baron Reuters organised for fishermen to row out off the coast of Ireland to pick up the mail canisters thrown into the water from the boats.
When the fishermen returned ashore the news was wired straight to London on the newly installed telegraph system. Thus, Reuters got its scoop and the European financial markets were thrown into turmoil.
"I love that story," says Glocer, who became chief executive of the news organisation in 2001 and has been at the helm of the newly formed Thomson Reuters group since the merger of the Thomson Corporation and Reuters Group in 2008.
"It is a story I often use internally to make a point, which is that people get very caught up with the technology of their particular era and make the mistake of generalising and assuming that everything is like that." It is probably worth pointing out at this point that in its earliest days, Reuters used carrier pigeons to fly stock prices to Brussels.
Recently, some analysts have been busy declaring the death of modern newspaper journalism, killed, they say, by internet blogs and Twitter and the like.
However, Glocer believes that Twitter should not to be feared and is nothing more than the latest medium to quickly get access to information. Previously the scoops were procured using a rowing boat or a pigeon, today the medium is Twitter, he says.
The advances in cyberspace, combined with the global financial downturn, have had an impact on advertising and therefore newspapers' revenues.
"Everyone got fat, dumb and happy over how much advertising subsidised the cost of quality content," he says.
"But imagine a world where there is no advertising. I think you could start a business if you had excellent reporting, a brand that stood for accuracy and speed and you could get people to pay for that only on a subscription basis."
Rupert Murdoch, whose News Corporation is reportedly in talks to enter the Gulf market by buying a stake in Saudi-based Rotana Media, has said that the newspaper business committed mass suicide by allowing users to access their online content for free.
"I don't think there is even a question, he is definitely right," Glocer says when asked if he agrees with Murdoch.
However, he says that there are a lot of people in charge of news organisations who are "struggling over the issue of making this transition in the consumer news world."
"We have never given our news away for free. We have Reuters.com where a small part of our news is made available, [where] we defray the cost and we get advertising. But if that was our only business we would be in deep trouble."When Glocer was appointed the chief executive of Reuters Group in 2001 he was the first non-journalist to take the top post at the news organisation, which currently has a market cap of $27.7bn.
One of his first moves was to focus less on consumer news and more on financial information for professionals and traders working in the markets and economic sectors.
"Our clients are mostly bankers, portfolio managers, traders and media professionals. The financial crowd is trading and making $100m decisions in a split second and they don't want to watch an advert. They are willing to pay if we can get them a three second advantage on news that is worth a lot," Glocer points out.
Last year, the company launched Reuters Insider, a video service that gives financial movers and shakers the latest economic analysis from the organisation's 2,700 or more journalists in 190 countries. Glocer summarises it as "Youtube for high-end finance professionals."
He believes all media companies should be looking to restructure their organisational structures and focus on what they do best.
"Every business has had to think through what do you do well and what do you not do well? The New York Times had 1,200 journalists - that is a lot of people. Do they need to cover everything themselves? I'm not convinced."
In November last year, Glocer announced that third quarter revenue from ongoing business fell two percent to $3.21bn and operating profit rose three percent to $711m.
The company said weak subscription sales in its markets and legal businesses was likely to continue in 2010 and impact its revenues in the first half of the year. But Glocer said they were not cutting their rates for customers.
"If a client comes to us and says this is really difficult for us... we'll work with them to restructure the cost and we might say ‘the contract is expiring in 18 months - how about we help you this year and extend the contract or shift it around'. People appreciate that you make an effort."
Conditions may be tougher and advertising spend may be down, but the Middle East's media sector has been attracting a lot of interest from some major global players.
Last year, the People's Daily of China, one of the world's biggest newspapers, sent a delegation to the UAE to look at setting up an overseas edition in the UAE to cater to the 200,000 Chinese expatriates living in the emirates.
Saudi's Rotana Media has been courting deals with News Corp and Walt Disney.
Yahoo! merged with the Arab portal Maktoob in a deal worth around $175m. The US search giant now aims to double its number of subscribers in the region over the next two years and access a larger share of the estimated 320 million Arabic speaking internet users worldwide.
The Middle East is also high on Glocer's list of priorities and he has a lot of confidence in the region.
"There is no question that our business is going to do well here.
"This place is on the upswing. We are shifting resources, both investment and people, here because we are growing much faster in these markets than we are anywhere else."
Rowing boats and pigeons were the mediums Reuters used to get the edge on its competitors in years gone by. As we move into the second decade of the new millennium what tools will it choose to grasp a bigger slice of the Gulf market?