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John Drinnan 's Opinion

Media writer for the New Zealand Herald

John Drinnan: Web boss trading places

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Trade Me executive Mike O’Donnell leaves after 10 years as the flamboyant face of the auction site

Mike O'Donnell's image at the office included loud shirts and motorcycle stories. Photo / Hagen Hopkins
Mike O'Donnell's image at the office included loud shirts and motorcycle stories. Photo / Hagen Hopkins

Mike O'Donnell's departure from Trade Me is a milestone for the listed auction site, as it works to maintain its dominance in an increasingly digitised market and pull its share price out of a slump.

The company's chief operating officer - also known as MOD - steps down next month, ending 10 years as the flamboyant face of the auction site, alongside founder Sam Morgan, loyal supporter David Kirk and chief executive Jon Macdonald.

A professional director and business columnist, O'Donnell has a larger than life image in business that includes loud shirts, a light-hearted style and motorcycling anecdotes.

O'Donnell said he had promised to stick around for 10 years, and had enjoyed the journey. He joined the business in 2004, when it was a private company. Since then he has seen it change to being wholly-owned by Fairfax, then part-owned, then to its current status as a listed public company. Now, he said, it was time to move on.

Who will take his place?

Macdonald said the search for a new chief operating officer could not be based on hunting for a new Mike O'Donnell - he had a unique style and "you're just not going to do that".

O'Donnell is to be executive director of a start-up venture owned jointly by the Ministry of Foreign Affairs and Trade and NZ Trade and Enterprise, to market public sector intellectual property to other governments.

Brand base

O'Donnell has been heading a push to attract overseas brands, which can use Trade Me to sell direct to Kiwi consumers. Ray-Ban and adidas are among the brands already signed up, and O'Donnell has pinpointed other overseas companies which will fit the business model.

Macdonald said Trade Me executives had travelled to Britain and the US to sell the auction site as a good way to reach the New Zealand market.

While some big brands are involved, there might be other brands that did not have a high profile here, he said.

Photo / Joel Ford
Photo / Joel Ford

Trade Me shares were trading at $3.55 yesterday, down 25.7 per cent from a year ago.

The auction site got offside with some in the real estate industry last year when it changed to a subscription style booking system for agents, leading to extra costs being passed on to consumers. Macdonald said the change was necessary because real estate listings were substantially underpriced, but the dispute has created some ill feeling in the real estate business, and industry leaders say it has not been wholly resolved.

Happy together

Two of the three dominant private-sector media companies in New Zealand are getting closer, with confirmation of a deal where Fairfax NZ moves its printing for northern markets to the Ellerslie facilities owned by APN. The deal means that Fairfax titles the Waikato Times, Sunday Star-Times and Sunday News will be printed alongside competing titles such as the Herald and Herald on Sunday, as well as APN's northern regional titles.

APN Print located in Ellerslie. Photo / Dean Purcell.
APN Print located in Ellerslie. Photo / Dean Purcell.

APN chief executive Michael Miller said he would like to see more co-operation between the companies in roles where they did not compete. He declined to speculate on where those might be.

Miller attributed a rise in the company's share price to the takeover of radio assets previously shared in a 50:50 joint venture with Clear Channel Communications.

In this country, that has led to greater collaboration between APN newspaper and radio assets. APN has divested its outdoor advertising arm, and had a better than expected performance from its Australian radio assets.

Miller said the improved share price reflected investor sentiment towards a more streamlined company which he said was better able to control its own destiny. "We are collaborating more in the business," he said. "I am a proponent that the industry needs to do more things together and we are pretty much aligned with Fairfax - there are some areas we do not compete in."

He said proposed changes to Australian media law would enable other media companies to work much more closely with APN.

Both companies recorded significant increases in their share prices since February. Those prices peaked in May but have remained relatively firm since. APN rose from 42c to as high as 71c in February, and has risen further since. Fairfax also had a strong rise in its share price around the same time.

Normal transmission

State broadcaster Television New Zealand appears to have abandoned proposals that would have seen a non-journalist manager overseeing its current affairs operations, a proposal which raised the hackles of some staff.

The proposal to place Lindsay Chalmers in the current affairs role was covered extensively by this column, and at least two staff raised concerns about the symbolic loss of independence by a news operation which has traditionally been the preserve of journalists.

TVNZ initially acknowledged the proposals but this week insisted there were no firm plans to make such a move, saying it had only been speculation by this column. Spokeswoman Georgie Hills said no further changes were planned at TVNZ after a small rejig, but TVNZ maintained the right to make changes in the future.

Digital sound

New Zealand on Air's chief executive is surprised by the popularity of digital music platforms in its recent report on New Zealanders' media consumption. About 38 per cent of those who responded to a survey accessed YouTube or Vimeo each week, making them far and away the biggest platforms in the survey.

Jane Wrightson noted that new digital music services had also made good starts, with iHeartRadio reaching 5 per cent after nine months on air.

Digital expert Michael Carney said traditional radio had held up well - but he felt that the cumulative figures for radio were coming down slightly as digital listening increased. In his view, people were still listening to traditional radio, but for shorter periods of time.

Wrightson confirmed that the survey had one prime aim - to help it decide how to spend its allocation of taxpayer dollars.

The funding organisation is under increasing pressure from digital organisations, and some individuals, to fund new media websites, but if it spreads money further it undermines the ability to spend on existing media. The good news for TVNZ and TV3 is that the big players will continue to take the lion's share.

As the survey showed, TV - and other traditional media - still have a dominant role in New Zealanders' consumption of media (see graph).

- NZ Herald

John Drinnan

Media writer for the New Zealand Herald

John Drinnan is the media writer for the New Zealand Herald. A business journalist for twenty years, he has been editor of the specialist film and television title "Screen Finance" in London, focussing on the European TV and film industry. He has been writing about media in New Zealand since the deregulation of the television industry in the late 1980s. He is focused on the business side of the digital revolution in media.

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