Is print really dead? Fairfax CEO speaks out
by Keris Lahiff
In recent times, there has been much ado over the fate of print publications and how they will survive when everything bar the kitchen sink is becoming digitised. How is one of Australia’s leading news companies adapting to a world in love with naughts and ones?
At the 2011 CeBIT conference, Fairfax CEO Greg Hywood shared how the company is taking strides into the digital age, and how they’re forging a sustainable business based upon three strong foundations.
“The beauty of the internet is that the business model and categories are constantly evolving. The playing field is constantly shifting and, trust me, we have a few plays coming up,” says Hywood. “People believe the market positions have been established. Well, business models change as we all know. What seems to be the dominant condition can quickly more and we, in that market, are opportunistic and we’re active.”
1. An eye for quality
Hywood believes the future for Fairfax rests on three key pillars, the first being quality content.
“Our strategy is fundamentally based on the premise that the heart of Fairfax is quality, independent journalism and the origination and creation of unique, quality content,” he says. “It is in our DNA, it is what we do, and it is why people are so enthused in working at our business.”
This quality, he says, is the business’ competitive edge, and the proof is in the figures. Nearly six million national and nine million global unique browsers visit the masthead sites each month, with an additional 850,000 people accessing content through Fairfax’s mobile sites and apps.
“Despite the choice of over 250 million websites and over 130 million blogs, we have more than tripled our Australian audience compared to 15 years ago when Fairfax’s major audiences were the Sydney Morning Herald and The Age newspapers,” says Hywood.
“Brands and trusted journalism is the key. We filter the world for our audience, we provide solutions to their need for trusted information. In all the information that abounds, people are seeking information that they can believe in and trust.”
2. Making the money
The need for change is not in the content produced, but rather the way the business operates, says Hywood. This encompasses the second pillar on which Fairfax’s future is built – the evolution of revenue and business models.
“Because of their form, newspapers have a very limited range of revenue models, the primary one (about 80 per cent of the pie) being advertising,” he says.
The second traditional source of revenue was the cover price for print publications, more commonly known through internet models as ‘paying for content’. The advantage of online is the introduction of new channels of revenue, other than print’s staples of traditional advertising and cover price.
“Online you aren't restricted to just two revenue models like we have been in print. So why force print models onto a new media with such potential ahead of it?”
For travel content, for example, print publications could only offer advertising space for brands, with no form of tracking.
“We are now able to bring new hybrid revenue models, particularly transactions, into play. When someone finds a holiday rental property on Stayz.com, they can book it directly using their credit card and we take a percentage of their payment,” he says. “We are no longer restricted just to ads and paying for content. These transactional business models are higher growth and higher margin than digital advertising and have massive market potential as more and more consumers lead their lives online.”
Similarly, in their online technology section, Fairfax offers mobile phone comparison tools which allows consumers to compare the best phone and plan for them. Of the business referred to any specific telecommunication company, Fairfax gets a cut.
“There are over 20 different types of situation-specific revenue models operating on our digital properties,” says Hywood.
In fact, of the near $300 million generated through Fairfax digital platforms in 2010, more than half was through models other than display advertising.
But, is the temptation to impose a paywall to content, similar to what AFR has done, likely to be introduced?
“The paid content model is always under consideration but fundamentally we believe there are more lucrative alternative ways to grow revenues online,” says Hywood. “We don’t plan on doing anything that significantly reduces the size of the markets we are creating that are not yet fully monetised. We prefer to think about monetizing our audience, rather than monetising our content.”
3. Access anywhere, anytime
The third pillar is multiplatform delivery, which means allowing the user to access the content anywhere, anytime and using any device on hand.
“In order to stay relevant in the digital age we need to deliver our content on whatever platform the audience wants wherever they are,” he says.
To do that, Fairfax needs to modify content to suit each device, so that performance and display is at an optimal level regardless of how the user accesses content. Hywood nods to the large number of video content now produced as an example of how the content is being moulded to user preferences.
“Today the masthead sites are beginning to resemble a TV station as much as a newspaper and we have grown to become the largest producers of professional short-form video in the country,” he says.
Every month, Fairfax produces 1400 original short news videos, and during major news events, such as the recent announcement of Osama bin Laden’s death, the sites see close to 180,000 video views. This is an area of massive potential, he says.
“Advertisers are increasingly moving their TV ads from the box to the Web. Over 3.2 million unique browsers view over 11 million video streams each month on our sites and our revenues from videos have growth 80 per cent in the past year,” he says.
Fairfax has also invested in promoting its content on different platforms, notably smartphones and tablets.
“Over the past few years, we have produced 24 different mobile apps and 2 iPad apps and had over 1.3 million downloads, making us the largest app publisher in Australia,” he says. “This puts Fairfax in a very good position for a future whereby by 2013 mobile devices are predicted to outsell PCs two to one and advertisers will increasingly seek to have their brands promoted through high-quality mobile content.”
A focus on maintaining these three pillars – quality, creative revenue models, and multiplatform delivery – is Fairfax’s future, a future Hywood says supported by innovation and creativity.
“We are innovative, not defensive. We are investing in creating, not in processes. We don’t rely on the old revenue models, we are building new models that better monetise our growing audience across multiple platforms. We are not defined by any single media, we are defined by the many platforms through which our audience choose to find us,” he says.
“We can’t keep producing our newspapers the same way we did in the 80s and expect the same outcome now – their shape may change, their content, their pricing, their distribution, their production … No one said it was going to be easy, but we need to keep moving forward and change is an inevitable part of that.”
Published on: Thursday, June 16, 2011