Large, painful changes at Australian newspapers

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On Monday Fairfax Media announced 1,900 job cuts, the closure of two printing plants, and the introduction of paywalls and a “compact” trim size at two of its largest papers, The Sydney Morning Herald and The Age, in Melbourne. News Corp., Australia’s other big newspaper publisher, is reportedly planning cuts, too.

Twenty percent of the job cuts, which will take three years to implement, are scheduled for the company’s newsrooms. Fairfax is looking for “voluntary redundancies” first, The Age’s Chris Zappone reports. In an investor presentation attached to its release about the changes, Fairfax says a shift to digital-first does not necessarily augur a change to digital-only, but it’s certainly looking at the latter.



The country’s Media, Entertainment & Arts Alliance said it is “is seeking urgent meetings” with Fairfax’s management. “Readers and employees alike are entitled to know precisely how Fairfax Media intends to ensure that these two great mastheads will continue to produce quality journalism when fewer journalists are left to actually go out and hunt out news stories,” the group’s acting federal secretary, Paul Murphy, said.

Former Age editor Andrew Jaspan said the changes are coming too late, Peter Trute reports: “Mr Jaspan said the company had suffered from a failure of management, with the shift in focus to online a welcome change but one that had been resisted for too long to avoid a damaging fall in the share price.” Margaret Simons tells Trute “The key mistakes were made a long time ago when Fairfax failed to anticipate the death of the classified advertising business.”

Jaspan also wrote a piece about the company’s troubles, which he says stem from bad strategy and a management team that had little media experience:

Instead of having the foresight to embrace and invest in the digital age by bringing together mastheads to work collegiately, Fairfax leadership instead chose to separate the online team from the print team and run them as two distinct businesses, with “Fairfax Digital” competing for advertising revenues with the so-called
“Fairfax Publishing”.

In 2007, I was asked to lead a team of three senior executives to visit the most progressive newspaper/media companies in the US and UK
and report back to the then CEO, David Kirk. We went to the Wall Street Journal, New York Times, USA Today, Washington Post, The London Telegraph, The Financial Times and The Guardian.

We reported back to Kirk that every one of these had brought together “print” and “digital” into one resource. That is one editorial team, one advertising team and one back office. Kirk flatly opposed doing the same on the grounds the two businesses were both very profitable. And he wanted to keep it that way.

Fairfax Media’s share price is down 87 percent in the last five years. Its 2011 annual report showed a loss of $390.9 million AUD (the Australian dollar is close to parity with U.S. currency) and revenue that was essentially flat.

The company says the changes will save it $45 million AUD this year and $235 million AUD a year by 2015. In a piece on the publicly funded Special Broadcasting Service, Andrea Carson says journalism at the company has suffered in its online iteration:

There is already a noticeable difference between the tabloid-style presentation of the online versions of Fairfax’s publications, using popular crime and celebrity stories to attract ‘click-bait’ to get more viewers, so as to attract more advertisers.

The company’s not planning layoffs or paywalls at its properties in New Zealand.

Earlier: The biggest newspaper layoffs of recent years (Poynter).

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