Graduation address given by Richard Freudenstein
Richard Freudenstein gave the following occasional address at the University of Sydney Business School graduation ceremony held at 2.00pm on 5 October 2012 in the Great Hall. Mr Freudenstein is Chief Executive Officer & Managing Director of Foxtel.
The photo below is copyright, Memento Photography.
Pro Chancellor, Dean, distinguished guests, new graduates and your families and friends.
It’s a great pleasure to be able to join you on this special day and to be able to offer my congratulations on your achievements.
I well remember my own graduation ceremony in this very Hall.
I’d like to be able to say that it was only yesterday, but sadly it was a long time ago indeed.
When I reflect the differences between my student days and now, the thing that strikes me most is how radically the world has been changed by technology in that time.
At the risk of sounding positively pre-historic, when I was a student we wrote essays by hand and research meant going to Fisher Library and looking up card catalogues or pouring over microfiche – and no, microfiche is not a smart-phone game involving tiny sea creatures….. – it was a research tool.
When I started University, there was no email or internet and mobile phones did not exist. When I graduated they were rare, enormous, unwieldy and could only used to make voice calls. Today you’ll mostly be using yours as cameras to send photos and videos to family and friends across the country and around the world as part of this special day.
Since that time change has been dramatic and rapid. What’s more it is becoming even faster. This may simply be Moore’s law in operation - computer capacity doubling every two years. Whatever the cause it is breathtaking and, for businesses, staying on top of the change is a huge challenge.
The revolution promised by digital, internet protocol and now broadband technology is being realised with a profound impact on traditional business models and on consumer behaviour. This will only be exacerbated by the rollout of the National Broadband Network.
So my key message for you today is that advances in technology and consumer expectations are changing, and will continue to change, every industry you are likely to work in. To be successful, you must embrace change and this is true now more than any time in history.
My industry provides an excellent example. When I was at university in the eighties there was a limited range of analogue television and radio stations. Of course, you could also record or buy programs on video cassette – another piece of technology many of you would barely remember. I didn’t know that 20 something years later I would be running one of Australia’s biggest media companies, because 20 years ago Foxtel did not exist.
The launch of subscription television in the early nineties was a huge break-through, offering significant choice in television viewing for the first time.
Today Foxtel offers over 200 channels and most of this content can be watched live, recorded or via catch-up services.
But this doesn’t begin to describe the new offerings that have been launched or are soon to come: video streamed on the internet, video on demand, mobile video services and so on.
Nor does it encompass the new forms of video content that are being delivered via YouTube, Facebook or, unfortunately for creative industries around the world, illegal download sites.
There are new devices and apps being produced at dazzling speed, it’s impossible to know what the next break through will be. When telephone companies launched mobile phone services they had no idea that they would be used more for data than voice traffic and who would have imagined Facebook and social media would become the phenomenon they have (just ask Alan Jones).
Indeed, it is the pace at which changes in consumer behaviour are occurring that is the most amazing part of this revolution.
Whether this is a function of technology making new modes of consumption and communication possible or whether technology has evolved to follow consumer desires I’m not sure – it’s probably a bit of both.
In fact there is a feedback loop that is becoming increasingly powerful. As our ability to track consumer behaviour and to understand individual consumer desires improves, the evolutionary cycle will become ever faster.
This applies not just to media businesses, but to almost every business. Failing to keep pace with technological and social changes can literally be the destruction of a company. Look at Kodak. Before the age of digital cameras Kodak accounted for 90% of all photographic film sold in the US and 85% of all cameras. Kodak then invented the digital camera, but was so stuck in the old world that it failed to exploit it. Kodak filed for bankruptcy last year.
Something similar has happened in mobile phones with Nokia. Nokia was once the largest supplier of mobile phones in the world with a market capitalization of almost $120 billion. But it missed the smart phone revolution and now has a market cap of around one tenth of its high point.
So how does a business like Foxtel cope with this rapidly changing environment? Well advances in technology and social media accentuate both a company’s strengths and weaknesses.
The digital revolution means that companies are no longer competing with the guy down the street, you are competing with the best in the world. Look at what online shopping is doing to our bricks and mortar retailers. It is therefore vital for a company to have a product that is good enough to compete with the world’s best and then to play to its fundamental strengths.
In the case of Foxtel content and a great viewing experience remain the cornerstones of our business. We must continue to produce and acquire the most compelling and engaging content available and deliver it to consumers in any form they want, whether that be the television, the computer, and increasingly mobile devices such as tablets and phones.
Critically, we must maintain flexibility and be able to respond swiftly to technological innovation and changes in consumer behaviour.
So my message to you as you embark on your careers is that change is the only certainty. Assumptions that you make today will be obsolete tomorrow. The fundamentals you have learnt at Sydney University over the past few years will serve you well, but to succeed you should embrace this change and be willing to grasp new challenges and adapt to new ideas.
My own career story is one of being in the right place at the right time, but also taking new opportunities as they have arisen. I have also been fortunate to have worked for companies that have thrived in a constantly evolving industry.
I started in commercial law working in Australia and the US. This led me to business development role in a start up business – Foxtel, when it first launched. It was an exhilarating time, starting with 5 of us sitting around a table with nothing but a concept on a piece of paper, and success was far from assured. Fortunately our shareholders were willing to take risks, invest large sums of money and had the patience necessary to get the business to profitability.
My first Foxtel experience opened up the possibility of a move to London and a senior commercial and operational role at BSkyB, one of the most dynamic media companies in the world. In its short, 20 odd year history, Sky has re-invented itself at least 3 times to respond to competitive pressure. The result each time was a major spurt of growth and now a secure future in the British media market.
When it was time to come home I was able to move into a more traditional and yet rapidly transforming business running the digital division of News Limited and finally I was lucky enough to be offered the CEO role at Foxtel.
In all of these roles I have felt that the imperative of responding the changing consumer demands and a willingness to challenge the status quo is exciting, and that embracing it is the key to success. An open mind and a willingness to try new things is the surest way to have an enjoyable and rewarding career.
I would suggest that in your career you look for an employer that:
- Understands the power of the consumer;
- Has a culture that embraces change and rewards achievement; and
- Has a business model and sells a product that can adapt to technological change
The other piece of career advice I would give you is to be sure to have your life in balance. This may sound like a cliché but I can assure you that it is true.
To reach my current role, I have obviously worked extremely hard. There is no doubt that to succeed you must, and it can be immensely rewarding to push yourself and the people you work with to achieve great results.
But I am just as proud of the fact that I have made time for family and friends, that I keep up with sport and exercise (maybe not as much as I should) and that I have given something back to the community by volunteering my time to a few charitable organisations.
I am better at my job because I have outlets that let me get away from work and give me perspective on what I do and what is important. I believe I am a better employer because I recognise that my employees should also maintain balance in their lives: they in turn are more positive about Foxtel as a company because we encourage this.
You will confront pressures on your time and sometimes it will be hard to make the time for yourself and your loved ones. Finding that space in a busy professional life is as good an investment as any other you will make.
So once again congratulations on making it to your graduation. I am sure that what you have learned here will stand you in good stead. Hopefully, the most important thing you have learned is how to think critically, to assess situations and to be able to adapt and respond to changes and challenges as they arise.
Good luck in your future careers.