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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

media: Fairfax's decline « Previous | |Next »
June 19, 2012

Yesterday Fairfax Media announced that it will change the broadsheets ---The Sydney Morning Herald and The Age--- to tabloid-size, and sack 1900 staff — including about 380 editorial positions — as part of a $235 million cost-cutting drive to cut the media corporations cloth to the steady decline in advertising revenue. It will also introduce digital paywalled subscriptions to the metro masthead websites on a “metered” basis — apparently similar to the New York Times.

PopeDRinehartSMH.jpg David Pope

A badly managed Fairfax is broke and its print media is declining before our very eyes due to the disruption from the internet, The old model of selling eyeballs to advertisers isn’t going to sustain Fairfax much longer since its revenues are falling faster than it can cut costs for its print media.

They need a viable business model quickly in the context of the radical restructuring taking place in the media world wrought by the digital technologies and the absence of any clearly successful blueprints for change. Greg Hywood, the CEO, is trying to reorient the group from its traditional print base to a digitally-focused future, presumably with new digital content and a growing digital audience.

However, the reality that he is trying to replace high-margin legacy revenues with low-margin digital revenues compounds the degree of difficulty of executing the transition. That means Fairfax is vulnerable to takeover from Gina Rinehart, who now owns 18.67 per cent, and whose current proprietorial demands are for three seats on the board including the deputy chairmanship, and the right to have input into editorial matters.

Her demands are in conflict with Fairfax board protocol that directors not interfere with the editorial direction of the media group and a charter of editorial independence that has been honoured by the board since the early 1990s.The danger here is that Fairfax mastheads become mining industry mouthpieces (a mockup) thereby destroying the remains of what Mike Seccombe calls Fairfax's perceived value.

Fairfax, Seccombe says, has endured years of staff cuts and online mediocrity to the point where it is now questionable whether readers be sufficiently confident of finding something of value behind the wall to justify paying. Therein lies the problem.

| Posted by Gary Sauer-Thompson at 6:40 AM | | Comments (16)


"its print media is declining before our very eyes due to the disruption from the internet"

The total readership of all Fairfax outlets is growing - up 30 per cent in the past five years, it says - readership of its print products is declining so that today a mere 34 per cent of its customers get their news in print, compared with about half five years ago.

The reasoning at Fairfax is that if profit levels can be maintained on a lower-cost base, then the print products may continue to exist. But if not, yesterday's decisions take them well down the track to less painfully abandon print in favour of an all-digital future.

The logical progression is for newspapers to become slimmer, more expensive, more targeted and to decline in circulation. The sections that have underpinned newspapers in recent years are likely to migrate to online only where they can perform a needed and profitable service.

The mass-circulation city newspaper is gone. They will become a smaller niche product with a smaller circulation.

Life without without a printed version of The Age or The Sydney Morning Herald isn't all that bad. I don't read them or the Australian in their printed versions.

"The danger here is that Fairfax mastheads become mining industry mouthpieces."

A spokesman for Gina Rinehart has already said that the board should establish an appropriate direction for editorial policy. What is an appropriate direction?

Opposition to the Emissions Trading Scheme, which is already law. Opposition to the Minerals Resource Rent Tax, which is already law. Policies that will support unbridled profits of great mining enterprises,

Will there be a break-up of the Fairfax business into smaller components directed at fragmented or niche audiences? For example, a sports site, and a finance site, and a lifestyle site, as well as a news and commentary site. If so they are print media organisations not the newspapers we once knew.

If serious news is going online then it goes off the news stands--a bit like Crikey.

The old Fairfax has gone. It had been badly managed for a couple of decades.

The new digital business will be very slimmed down because of limited online advertising revenue. It will have a new regime whose voice is that of the Big Miners.

The Yellow Pages is less than half the size it used to be which is a good guide to how the internet has changed advertising.
Other than pushing an agenda or having an uncontrolable need to control I can see no reason to buy into print media.

' A badly managed Fairfax is broke .....'


I'm old [*sigh*].
So my memory, with all its faults, goes a long way back, too many decades.
And I can't remember a time when Fairfax was not badly managed.

Try this:

Gina Rinehart is really interested in moulding public opinion--changing the anti-mining flavour of the Australian media in the East. Fairfax market niche is a small ''l'' liberal media market, with a younger audience skew online. So the move to pro-mining is a move into News Ltd niche in the market.

It looks like News Ltd is going to slash jobs in its print media and move further into pay TV .It announced that it wants to acquire 100% of the shares in Consolidated Media Holdings.News would own 100% of Fox Sports and 50% of Foxtel (along with Telstra).

Will The Age be able to maintain its distinctive culture? Its editorial identity includes the politics of middle-class small-l liberalism.

"A badly managed Fairfax is broke "

Fairfax were were never serious about moving into the digital media market to any significant degree.They were more concerned to trying to protect a dying business/industry. The the underlying strategy was to protect the ‘rivers of gold’ linked to their lucrative advertising revenues – and these, of course, were linked to their printed media.

One way to understand Fairfax is to see them Fairfax is becoming another piece of road kill along the superhighway, alongside others such as music companies, retailers, Kodak, and Nokia

Yes lots of businesses have had to evolve Steve. Travel agents took a pounding when everyone started booking their flights and holidays online a few years back. They survived but there is probably less of them.
That is the future of print media. Perhaps less is better. And perhaps it only seems a big drama because the media is overwhelmed by its self importance.