by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Panpa Bulletin : July 2010
www.panpa.org.au 8 | The PANPA Bulletin | JULY 2010 Irresistible force CHANGE comes at increasing velocity for newspapers these days. It is an irresistible force but despite the complaints of traditional- ists, our industry is not an immovable object. This reality is keenly felt on the edges of Sydney Harbour, the headquarters of Fairfax Media. A sense of anticipation currently em- braces the world's 13th richest newspaper pub- lisher as its board and executive management add final flourishes to a three-year strategy. No shortage of speculation, even caustic criticism from competitors, is levelled at Fair- fax, such is the esteem in which the company and its tradition of high-quality journalism is held. If Fairfax Media did not occupy a rarefied position in the psychology of Australian public life, then the company might be better able to revitalise its strategy without continuous scrutiny. A reputation as a bastion of quality journalism and liberal ethics can be a blessing and a curse. The company is widely diversified across print, online and radio, throughout metropoli- tan and regional Australia and New Zealand. Chief Executive Brian McCarthy says that Fairfax is considering significant change, ex- amining various options to further integrate its print and online operations. "At Fairfax, we very much separated these two parts of our business," Mr McCarthy says, choosing his words carefully and slowly. "Per- sonally, I have no doubt the integrated model is best because it suits our customers and there is a match with our internal capabilities, too. "Last year we decided to integrate the metropolitan classifieds for Domain and My Career. In the regions, by the way, they were already integrated. "This direction for the rest of the company is currently being reviewed by the board." The board, led by chairman Roger Corbett, has only recently had new members appointed to it, and it has commissioned an outsider's view of its future from Bain & Co. There is a sense of unease about the media focus on the integration aspect of the business. Mr McCarthy repeats what has told other me- dia, "this is only a fraction of the picture. There are 40 other key elements of our strategy being considered". Of course, there is far more to Fairfax than the amount of influence wielded by a print editor over their website. Yet, the importance of this aspect of Fairfax Media illustrates the degree to which its journalism standards are integrated into its brand built over nearly 180 years ago. Mr McCarthy continues: "To do things the old way is not going to be sustainable in the long term. We really have plenty of quality content, but we need to stay abreast of all dis- tribution platforms. "Our great strength is content -- so we need to be relevant, trusted and surprising to the reader. This is at the heart of the success of any media group." While competitor News Corporation has dominated the debate about charging for online content, it is often forgotten that Fair- fax's major finance newspaper, the Australian Financial Review (AFR), has been charging for access to its website for more than three years. Mr McCarthy says his company will move "more and more to a paid model, but to do that we have to enhance our offerings and packaging". "We will take different approaches to the market," he continues. "Where you have unique content, you can receive money. Offer- ing generic news cannot be like that. "Over time Fairfax will have two models -- a premium model and a free, more basic service. "There is a point where you have to ask the readers to pay, but there needs to be a higher level of offering. I am talking about the print product going online, and offering a plan that embraces the convenience of choice" -- a reference to the various digital platforms that continue to emerge. "You have got to move with the new tech- nologies," he says. "We have 40 apps planned. We know we need to develop youth reader- ship." Video is an emerging force within Fairfax Media, and is coupled tightly with the content direction of its digital properties, including its web-only presence in Brisbane and Perth. Last month, the company formed a loose partner- ship with a commercial TV station, Channel 10, to broadcast its bulletins on its websites, such as theage.com.au. "We are moving to improve our offerings with video content," Mr McCarthy says. "We produce more than 1,000 short-form videos every month -- that's a level of content that is second to none in our market places." It would be wrong to focus only on the flagship activities of its major newspapers and Fairfax Digital, as the company is far wider and deeper in its media portfolio. Having embraced Rural Press more than three years ago -- Mr McCarthy was CEO of Rural Press and integral to the merger at the time -- the company is keenly aware of the im- portance of its provincial and local newspaper commitments in Australia and New Zealand. It has announced a plan to put 160 regional publications online -- a decision Mr McCarthy says is tacit support for the $A43 billion Na- tional Broadband Network (NBN) that is being driven by the Australian federal government. Fairfax and its rival in the Australian prov- inces and in New Zealand, APN, are both concerned about moves by the national broad- caster, the ABC, to make a digital land-grab in outback Australia and begin competing with local newspapers for readers, if not for adver- tising dollars. Out in the bush, and in New Zealand, eco- nomic hardship is significant. Mr McCarthy says: "New Zealand is lagging behind Australia in terms of advertising pick-up. "They are doing life tougher at the moment. The online business, Trade Me, has continued its strong record of growth, but the advertis- ing market is still facing significant challenges from a weak economy." He says the farming community in Australia is going through another period of consolida- tion, and that is hurting revenues and circula- tion of its regional and agriculture titles. Business is brighter in the big cities of Aus- tralia, however. Melbourne, apparently, is more robust than Sydney. "Advertising has improved markedly in the second half of our fiscal year, and we have seen increasing revenues in most categories," Mr McCarthy says. "When we look at this trend, I think we got our predictions about the marketplace right. Despite what the pessimists said at the time, our business has been able to ride out the downturn, and it has not had an impact in a structural sense -- and that's an important point." Circulation is tougher. The AFR has seen almost 10 per cent sliced off its audit number since the global financial crisis -- a fact Mr Mc- Carthy says is not a reflection of the quality of the paper but the weak state of that particular market. "In the metros," he says, "we have had declines but that has been no different to our competitors. But as an industry, we are per- forming better than those in the United States and United Kingdom." This last sentiment is not conveyed in a way to make anyone feel any better about circulation drops, and clearly this remains a challenge for all publishers in developed markets around the world. Mr McCarthy says a key tactic for his man- agers is to focus on the audience, not just the numbers. "In the metro areas we are focused on the AB demographic -- that's the quality audience where we will maintain the thrust." Of course, Fairfax is not alone in this direc- tion. The capacity to be inventive and creative often gains greater ground than simply the next deal. The company has made a significant impact in the retail market with a recent 3D special in the Sun-Herald, which was sponsored by Harvey Norman, a major retail chain. While others have experimented with 3D, the Sun-Herald opened the throttle on the project and has won plaudits across the pub- lishing spectrum. The Sydney Morning Herald was the first in Australia to print a transparent wraparound, winning business from Toyota. For a company pilloried for redundancies in 08, a lot of talent still walks through its doors today. "I am constantly amazed by our people," Mr McCarthy says. "This is the most important aspect of our business and our future." Yet, the publicity the company received over its redundancy action still rankles with the Fairfax boss. "These cost reductions were highly publi- cised by our competitors," Mr McCarthy con- tinues. "Fairfax has to make public disclosures by law and make more information available than our major competitor, which has the luxury of disclosing far less. We even have to make public the executives' salaries, so I see us at a distinct disadvantage." However, he says the company's cost base was out of kilter for many years. "Fairfax was suffering a cost base that was unsustainable, and which had been built up over the previous 10 years. This had to be ad- dressed to counter the GFC. Unfortunately, a lot of good staff lost their jobs." He says that once in the hot-seat, he found the need to focus on management discipline. "I have tried to make executives more ac- countable and responsible for their own busi- nesses, and to reduce the lines of reporting so decision-making is faster and better. "I have had to challenge some of the behav- iours that resulted from past thinking. We have tried to encourage co-operation and teamwork, and we have improved management training, which was badly lacking." Mr McCarthy sees all this as foundation work for the next three years -- the term of the strategy currently under board review. "We will be a very strong media group over the long term with a business model that every media company will respect," he says. Brian McCarthy . . . 'I am constantly amazed by our people. This is the most important aspect of our business and our future' We are moving to improve our offerings with video content" " Over time Fairfax will have two models -- a premium model and a free, more basic service" " Brian McCarthy describes how he will take Fairfax into a new era Mark Hollands