Fairfax Media focuses on subscription business as source of revenue
Fairfax Media is turning to a subscriptions business as the media company looks to new revenue models following the decline in the print industry which has seen print publication circulation tumble, taking with it print advertising revenue.
Speaking at the Publish conference Fairfax CEO Greg Hywood stressed the company was in “really good shape” after severe cost cutting over the past three years, adding: “It’s not conventional wisdom that it’s in good shape, but it is in really great shape.”
He said there had been a transformation in the business with changes in revenue streams, with subscriptions now making up around 50 per cent of revenue, stressing the company was now “debt free” after being $1bn in the red two years ago.
“If you look at the metro business now, when I first started the breakdown in revenue was 85 per cent advertising, 15 per cent subscription,” he said.
Interesting… Especially in light of my “quite high” consumption of SMH content in the last week without hitting a subscribe message… Did they forget to turn the paywall back on after the bush fires last week?
then they’re in big trouble – their subs service is shocking.
Rubbish. The subscription share is up because the ad share has collapsed. There is zero evidence of profit growth. In fact his reference to revenue growth in events typical hywood spin. They already had most of that revenue and the margin on events is tiny.
When property advertising finally goes Fairfax will struggle to pay Hywood’s salary. Even if he is the last on the payroll.
I’ve always backed Fairfax, but the handling of my subscription is just downright terrible. In many ways its like they don’t want my business, odd.
the service level on the subs is well below where it needs to be for the $25pm price point. The price and service feel like they are based on entitlement not market reality.
Personally I feel that as a price is too high and will need to drop 50-75% to be mass. Costs me $25 pm just to read Fairfax content but I can pay Netflix $10 pm and basically get all the filmed content in the world.
Why would anyone pay to read the SMH or The Age when you can read Socialist Weekly for free? Same content.
Dear Mr Hywood – The only winners are Google and Facebook.
It’s pretty amazing that the SMH is no.1 in the news website rankings, despite the paywall (even if it is somewhat porous). If I were Fairfax I’d be pushing that win a lot more and reminding advertisers and readers that they are at the top.
You took the words out of my mouth @ Undertone. ANd if Fairfax really believes that subscription revenue will save them, then they are in dire straights. Print Subscription revenue is falling – no question. Digital Subscription revenue is tiny by comparison and growth has slowed to a trickle. Let’s hope Hywood has another trick up his sleeve. Fairfax’ bottom line and debt position has certainly improved in the last couple of years — but that’s been driven entirely by radical cost cutting and asset sales (to which there is a limit), not by revenue growth. And to argue that tAustralia is a “big market” that can sustain multiple streaming video players is nuts. Australia is a tiny market – it will support one and possibly two streaming video businesses, no more.
50 million down the drain with Steven. Oh wait, I mean Stan.
Greg Hywood is totally delusional. It was an incredibly difficult and frustrating process just to subscribe to the print SMH, it didn’t arrive even when I received an email saying my subscription had been processed and credit card charged.
Similar story for me Vortex09, but it’s longer and less entertaining read. Last straw was when the paper didn’t arrive and I sent them a message. I didn’t get a reply, but did get a “how do you rate our service from 0-10” email. Don’t know why they bother with all those numbers above 0.
There is nothing wrong with subscription sales for news publishers. But the content mush be quality, not just said to be quality and the subscriber must believe they are important and getting value for their money. Given the Fairfax track record of the past three decades of declining quality it would seem Hywood is living in a dream world of his own making.
Hywood says his subscriptions opportunity is “enormous”. So why is his pricing strategy so flaccid? He suggests that the Fairfax rich is a bundling opportunity. Earth to Hywood: have a closer look at your web demographics.
By the way: your brands are all sick because the products are unwell.