More staff cuts likely as Fairfax eyes digital only

you Can’t just look at digital v print revenue. You also need to consider costs. Sure, if Fairfax stopped printing its metro newspapers and moved to digital-only, it would lose all or most of the $252m in print revenues (some would likely transition to digital, but probably only a small proportion). But cutting print production also allows Fairfax to cut ALOT of cost — printing presses, paper, distribution costs etc etc. Better to look at net revenue or EBIDTA of print and digital operations (revenue less costs) to understand the net effect of dropping print on Fairfax’s bottom line.

Expect a whole lot more howlers like yesterday’s “Industrialisation in the region PEEKED in the 1950s.”

And expect more Google maps to serve as fillers, I mean to inform Sydneysiders where Penrith and Parramatta are.

There’s been a huge discounting and ‘free’ benefits push on new subscriptions the past 3-4 months. Meanwhile existing monthly subscription prices for the Weekend Papers + Digita have increased from $25 to $30 a month.

They can throw in member benefits like movie screens and Stan freebies all they want, but the value isn’t there from a news perspective and that’s why I subscribe, news & editorial.

Whatever your politics, News is the absolute winner in Australia.

They must be ecstatic to see that most of Fairfax’s profit now comes from Domain. When that’s sold, what’s left?

Fairfax may be trying to cut costs by moving from print to digital but what has become apparent is the desperate need to invest in re-training their sales people during this shift, who from my experience are still at a loss as to how to effectively sell their digital opportunities and then manage them once live. Poor service all round from Fairfax at the moment.

The bit that’s not covered here is the Fairfax newsstand sales, which are (by my understanding) bigger than either print or digital subscription revenues.

Digital subscription revenues have stagnated, print is declining but they have those subscribers that even Greg Hywood refers to as ‘rusted on’ instead of loyal, so they might be OK for a while.

This weights the argument firmly on the print side. I wonder if they actually know enough to break down costs so they can see digital and print attribution to do maths on whether they can actually move to digital only.

I wonder whether Greg H meant to give that pretty juicy quote about moving to all digital in his roadshow…..

Hywood talks about a transition. But he’s really talking about aggregates of revenue. The news media is funded by the print revenues. Fairfax gets very little revenue from digital subscriptions and the attribution of advertising to content is tiny.
The question that lingers is: how much of Domain is dependent on print? That is, through print and digital bundles, especially in the regional markets. Is this why Fairfax can’t sell it off? And what happns when print hits the wall?
What’s actually happening is that print revenues are falling and so news media costs have to fall. The revealing characteristic of Hywood’s strategy is the constant flip=flopping on consultant advice. Hywood himself has no plan other than to pump up Domain. Stan is a midget in a market that will be dominated by global content players. The events business is nothing more than a re-bundling of things that Fairfax has done for yonks.
Perhaps most obvious is Hywood’s assertion that quality news reporting is always in demand. He’s right. But he’s not in that business.

I agree with Numbers….consultants must have made a bloody fortune out of fairfax in recent years whilst it hasn’t been able to decide how to price this or when to drop that.

That makes it sound like a business without clear direction from those making decisions.

I’d disagree that digital revenue is tiny, the problem is that it’s not growing as fast as print is falling – save for acquisitons in print ad space that mask the problem for another year.

I think the problems are pretty big – they’ve gone half way with a porous digital strategy that anyone with half a brain and access to google can get around, thus meaning really only fans of fairfax are probably paying right now…but it generates too much money to kill.

Print is still a massive cash cow when you add in newsstand.

No one knows how much domain relies on the news products.

So where to…..hmmm!

Rice King: to be clear, my point is about the digital revenues attributed to content.
A very big chunk of Fairfax digital revenue would exist if they published only porn and real estate ads.
The problem is that the money that relies on a demographic, which is what quality journalism needs, is not big in the digital model. In fact the tendency to ad blocking and other pricing issues has led even The Guardian media writer to suggest that maybe publishers will punt their digital business first!
Fairfax under Hywood has not ever had a focus on the reader as the core value driver in the business. For that reason it’s quite likely that it will crumble as a business as the once great news brands are killed off by slow strangulation.
But there’s still time for Hywood to upgrade his car.

Sorry, the Guardian link http://www.theguardian.com/med.....ing-mobile

Headline for this article ought to read “New Zealand based man speculates on Australian based publisher”. As, it is the largest in the Southern Hemisphere.

What about the Heralds Growers Market being shut down after 18 years?

http://www.businessinsider.com.....own-2016-2

I read that Hywood is getting paid so much he feels comfortable buying silly cars and very expensive flats. I wonder why this is, since as a long time client and reader I see nothing but dysfunction. Fairfax has no coherent sales story in any of its products, even Domain. The bundling is ad hoc and makes little sense. Pricing is weird. The metrics they use are either fake or extremely hard to apply to anything that a client would buy. In short, they are living on the past.
As a reader I am mortified. Once proud, reliable news media are patchy at best. There are B grade celebs writing as if their words had the force of substance and balance of style that famous authors would be proud of. Sheehan, to make the obvious recent example, is a goat.
Hywood should hand back his pay and get a job that suits him. Maybe with Billy Shorten!

I am thoroughly under the opinion that the future of written print journalism is in a once or twice a weekly compact issue with long form articles, analysis, opinion and arts and books review content much like The Saturday Paper, Guardian Weekly, The Spectator, The New Statesman, Time etc etc…..

The daily run of news is so available on other platforms that the hard copy newspaper as we know it is a gonna!!!