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Fairfax Media: cold winds blowing « Previous | |Next »
December 7, 2008

David Kirk's resignation as CEO of Fairfax Media and his replacement by Brian McCarthy is a good time to assess what is happening to corporate media in Australia. Fairfax has diversified---adding more legs to its broadsheets and its dependence on the Sydney and Melbourne advertising markets. It has extended its strong position in traditional newspaper publishing into online businesses. It has done so by going on a spending spree ($5.4billion) over the last three years including Southern Cross Broadcastings' radio stations and production company.

Despite this repositioning Fairfax's share price has been ravaged by short selling, there have been cost-cutting programmes at The Age and the Sydney Morning Herald; these broadsheets continue to lose circulation, and its revenue is still 80% dependent on advertising, a market suffering from weak conditions. McCarthy as CEO means cutting costs and keeping them down. Presumably that means no frill newspapers. Goodbye quality broadsheet journalism.

So what does this mean for newspapers? Media companies in the US, UK and Australia are seeing a slump in revenue and earnings, and most are cutting staff and reducing costs. The Future of Journalism Report by the Media Alliance says that the old model of newspapers is undergoing systematic collapse and not just a cyclical downturn.

Rupert Murdoch in his Boyer Lectures observed that we are moving from newspapers to news brands.

In this coming century, the form of delivery may change, but the potential audience for our content will multiply many times over.... My summary of the way some of the established media has responded to the internet is this: it's not newspapers that might become obsolete. It's some of the editors, reporters and proprietors who are forgetting a newspaper's most precious asset: the bond with its readers.

Margaret Simons says that the events at Fairfax are a generational moment in Australian journalism and public life - the moment:
when it became crystal clear that newspapers were no longer going to be the main, or most important, forum for serious journalism and public debate. That does not mean that journalism and public debate will die. It does mean we are in the middle of a profound paradigm shift with implications for every aspect of our democracy. Things are still playing out, and will do for another decade or so, but the depth of the crisis is clear.

She adds that Fairfax Media may well survive as a company. Kirk’s legacy, the diversification away from newspapers and into internet advertising sites, means that Fairfax Media is unlikely to disappear. However, it is unlikely to be the home of premier Australian journalism in the medium and long term.

Well, we've known that for sometime. Mass media has fractured from the collapse of the old business and journalism model. What then is Simon's paradigm shift? Is it diverse media voices in a digital media landscape? What does premier Australian journalism mean in such a fragmented digital media landscape? How would it work and be funded?

| Posted by Gary Sauer-Thompson at 12:15 PM | | Comments (18)


A new era. Less revenue from advertising means more cost cutting at Fairfax. Less dividends for shareholders. Reduce debt by selling assets in a fire sale. Less emphasis on quality news and information. The axe is to fall at Fairfax.

I remember what a revelation the Age was when I was getting it delivered a while back. What a revelation to someone used to the "Advertiser".
Like wise online.
But SMH, the Age and the Australian have deteriorated to a far greater degree online even than in print form.
They are the press version of a parallel process with public brodcasting that has seen the trashing of SBS and ABC TV and radio; content wise.
At home last night, stale old "The Bill" came on at its usual time over the last couple of decades, and you think of this toilet training of an unimaginative audiences against times past when Saturday night home on ABC or maybe SBS could have been be a beaut adventure.
And The Bill is the best of the fare, rather than the worst!
Same with the papers. So many exciting journalists and columnists disappeared in favour of "lifestyle", "opinionated" rot, models popstars tabloid crap. And you don't dare to contemplate the amount of substantial news left on the cutting-room floor to make way for this other tripe.

Reduced circulation of newspapers will mean a greater effort at focusing on their target customers to maximise advertising revenue. That will equal more attention. tighter, more specific, being paid to those at the top end of the income scale, the 'big spenders'.
I'm going to roughly equate those people more with the conservatives ie older, richer, money to spare, business types by which I mean the Liberal voters [the Nationals voters are well and truly already covered by Rural Press]. So I would expect a trend towards a more right wing presentation of news in the Fairfax media in the near future. Some say it has already been a trend in the last year or so. [Do you like the 'some say' trick?]
Maybe in a year or two some people will say that the SMH/Age are to the right of the Australian and its stable mates.
Not a positive prediction for a well informed public.

Whaddaya reckon?

The Advertiser has gone even further down hill since your "while back'. I don't watch TV on Saturday night---its a DVD if anything --so I cannot comment on public broadcasting on that night. But ABC has a strong news and public affairs component and a strong online presence.

I've noticed that The Age and the Sydney Morning Herald have gone far more regional--they've given up trying to become a national newspaper. That is one way they have focused on their target customers. The other is more infotainment online.

The assumption is that news is what appears on the front page of the Mainstream media--eg., The Age. News is something produced by professional journalists etc. Doesn't that ignore ‘news’ at the neighborhood level in a local community.

What will probably happen is that Fairfax, if it plays its cards right, will become a 24/7 multi-media operation, running a newspaper and website featuring ITN news video and several in-house television portals for business, sport and lifestyle. Fairfax have copied the “newsroom of the future” of the Telegraph Media Group in the UK.Fairfax use the “hub and spoke” model for the Sydney Morning Herald and The Age.

There is nothing to stop a country newspaper becoming a rusted source for locally produced news, analysis and investigative reporting an online niche media hub with the spoke lifestyle, reviews, photographs concentrating local government, education and high school sports. The emphasis is on content provision.

I suspect that Margaret Simons, blogger, is a sign of things to come in journalism.

Without journalists newspapers can't be what they, and we, expect them to be. The big media business model which is currently falling over does not value journalists, and journalists are now realising this.

Trevor Cook makes another point - that big chunks of content is just recycled PR material which could just as easily be circulated without big media.

Obama's already worked this out and eventually others will too.

The only thing news reporters can do that can't be done by anyone else is investigative journalism, and their employers have dumped that in favour of opinion columns.

Mark Day in The Australian says that:

It cannot be said with confidence that a Fairfax/McCarthy play will bring any greater understanding of the need for quality journalism to maintain and extend the life of the company’s flagship titles.It is the editorial news content that will either grab the attention of readers and sustain the newspapers for many more years, or allow their relevance to wither into extinction.

On Day's account the broadsheet papers must be filled with news that is fresh and meaningful, not simply a rehash of the endless flow of free information found on the internet. Day adds:
McCarthy imposed a rigorous low-cost regime in the Rural Press titles which led to a cookie-cutter approach to journalism. Editorial staff numbers at regional newspapers were kept small, which meant extensive copy sharing, off-site subbing, an unsettling embrace of PR copy and the death of investigative journalism.

The result of the dumbing down to reduce costs is that journalism becomes a product like soup. Cutting costs leads to inferior newspapers which leads to declines in readership and revenue, which leads to......Day adds that if McCarthy brings this approach to The Sydney Morning Herald and The Age, Fairfax Media is doomed.

We know that big changes are coming, that our media landscape will be much more diversified than ever before, and there will be the emergence of new voices on the Internet. So the journalists retire or migrate elsewhere from Fairfax and The Austraiian. Where do they migrate to? To local public affairs journalism? To non-profit news sites for community building?

The migration of joumalists from the downsized broadsheet newspapers means a greater diversity of media platforms in Australia. It will also mean an increasing turning to global media---the BBC, Guardian, Times, NY Times, Washington Post.

Who will fund the journalists to do independent quality journalism in the niche media? The journalism schools in the universities? Subscription for quality comment and analysis from readers? Media unions put up the funds?

If national newspapers--The Australian and Australian Financial Review--- cover national stories, then that leaves a gap for regional stuff eg., The Canberra Times. What then happens in the region in terms of media diversity? Is the Pro Publica model an option?

Currently, in Australia it is a case of get your own blog and take responsibility for your own training in the digital media. If blogging 'markets' you in the media market, it doesn't generate more than small change from ads on the blog.

So where does the funding come from for the digital independent journalism/commentary in the niche market? The serious erosion of the economic base of the broadsheet press raises the question: how do we support that sort of activity if we think there is a public good attached to it?

re your question:

Who will fund the journalists to do independent journalism in the niche media? The journalism schools in the universities?

it would seem that Swinburne University’s Institute for Social Research is a definite starter. The other partners include Private Media Partners, the publisher of, and Griffith University's Griffith Review.

This is a community-funded professional journalism under the auspices of the planned Foundation for Public Interest Journalism. It is modelled on amongst others and would consist of a team of senior and professional journalists in ongoing interactive relationships with audiences doing ground-breaking journalism.

The foundation would occupy new ground between traditional "big media" and the new online "citizen journalism" of the bloggers. The citizen journalist of the bloggers is seen as a modern-day form of pamphleteering.

The Media Alliances' Future of Journalism report says that the key difference between professional journalists and all the bloggers and all the amateur net journos is our credibility and that the professional journalists can deliver properly researched news.

"Where do they migrate to? To local public affairs journalism? To non-profit news sites for community building?"

Anon's comment pretty much covers it, and I wouldn't be surprised if there are bunches of disgruntled journos plotting other options as well. Grooming contacts and networking is their bread and butter, so it makes sense for them to network with one another to solve their employment problem.

It's also a mistake to think that journos are wild about what corporate media has done to the reputation of journalism. They've been lumped in with corporate tabloid tendencies.

This bit is a worry though:

"the key difference between professional journalists and all the bloggers and all the amateur net journos is our credibility and that the professional journalists can deliver properly researched news."

They still see a stand off, which isn't making the best use of potential resources. They'd be better off doing things like joining the Twitter thing than ranging themselves against it.

I read the whole of the Media Alliances' Future of Journalism report over the weekend.

There is no mention of the partisan "journalist" acting as the publicist for the Liberal Party when it was in power. The key phrase is "professional journalist" working in a mainstream newspaper. It's an ideal, given the partisan copy that happens at News Ltd, or the standard rewriting of press releases as "news" or the ignorance of policy issues of the standard journo in the Canberra Press Gallery. No mention of Fox News either.

There is no awareness that the old model of "professional journalism" is as broken backed as the business model of the mass newspaper--eg., the Chicago Tribune. All the union report sees in terms of change is journo's adapting to change by acquiring new digital media skills so that they can continue to practice their craft of old. In this way they can surf the wave of change.

under the recommendations of the Alliance Media's Life in the Clickstream: Future of Journalism Report we find

Shaping new media: The Alliance has to shape new media based on our core values of independence and respect for truth. It must empower journalists and engage with our communities. Governments have to understand the challenges our industry faces and to accept their responsibilities for working with the industry to shape new media. A key government role will be in strengthening public broadcasting, which is central to how Australia is informed and entertained.

How do their core values of independence and respect for truth sit with the standard journalist practice of spin, drip feed, and rewriting government media releases as their own copy?

Other interesting models are Ariana Huffington's Huffington Post, Tina Brown's Daily Beast, and Simon & Johnson's Pajamas Media.

There will shortly be a number of unemployed Fairfax journalists roaming the streets looking for something to do. It will be interesting to see what happens.

Interesting models. Tina Brown on her blog at the Daily Beast comments on this issue. She says:

What do cars, debt risk, and collapsing television networks have in common? The suits running them all lose sight of what they condescendingly call “product”—i.e., whatever it was that motivated the company’s spirit of excellence in the first place. The trouble is, those guys and their appointees don’t seem to be the ones who are leaving, do they? Indeed, the recession is giving many of them air cover. “It’s not my fault, it’s the times we live in.”

In all these big, lumbering companies every effort at innovation or practical efficiency gets strangled by something called “the process". Eventually the content gets gutted by layers of dead skin and rotten management.

Gutting the content of papers has caused the decline of a Chicago Tribune and Los Angeles Times—and results in the media company filing for bankruptcy.

Her hope is that the diaspora of talent will re-form and succeed while the companies who ejected them collapse and disappear.

Mike M,
re your comment

There will shortly be a number of unemployed Fairfax journalists roaming the streets looking for something to do. It will be interesting to see what happens.

The new model suggests that blogging and online news is the way to go. Maybe, as more more and more reporters are made redundant, then maybe more sites will pop up.

Brown's Daily Beast is people doing basic work for small pay, but they're doing something they love. I do not know how the economics works out so that these ventures are able to survive.

Anon, I don't count partisan opinion columnists as journalists. A journalist is supposed to be a reporter of factual news in the public sphere ideal. Sure, we don't have the ideal, but it's important to maintain the expectation.

"the old model of "professional journalism" is as broken backed as the business model of the mass newspaper"

I'm not so sure about professional journalism being broken. We have people like Margaret Simons and the people who fill Griffith Review. We have idealistic young things graduating from uni and looking for mentors. There are reasons to be optimistic about journalism.

What to do with the press gallery? We have our own C-Span coming. Do we even need them any more?


I don't know about other states, but newspapers and their political reporters have done their dash with the Qld govt. Ministers refuse to speak to them. Peter Beattie started warning this would happen years ago. The Rudd govt is also continuing to talk around and over the MSM as they did during the election campaign, so I can't see governments accepting their 'responsibility' for working with the media. Public broadcasting maybe, but what Labor minister is going to prop up Andrew Bolt?

The blogs on Tina Brown's Daily Beast, like Margaret Simons' blog in Australia are exmaples of good commentary. They interpret the chaotic events in the media industry and make sense of them for is. This is a long way from the journalist as reporter of factual news in the public sphere. That old fashioned model is broken backed.

The Griffith Review falls into the category of little magazines not newspapers. The little magazines are commentary, writing and part of a dialogue' or debate in the public sphere.

Gary, re your response, 8/12. I think even the ABC and SBS current affairs setups have been undergoing an onslaught, both of funding cuts and allied content manipulation under cover of above, including thru the "balance" requirements cooked up during the Howard years.
At SBS, it is clear that the resultant dumbing down affront to TV broadsheet created at least one cause celebre; the down fall of Mary Kostakidis.
With Fairfax, we still await the reinstatement of Mike Carlton.
I guess I wrote my comment against the background of reports suggesting Conroy's narrowly-driven net censorship is "in pieces".
All the time he wasted pursuing this populist policy "junk".
At the expense of issues raised by the likes of Kostakidis, Friends of ABC, Friends of Fairfax, Errol Simper, Media Watch etc, etc.
What am I to make of it all?