Fairfax, News Corp and bleeding the ink out of newspapers

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Can you imagine a world where your only media options were News Corp publishing? Who would hold the powerful to account [and] how would we know verifiable fact from factualised fictions? ~ Dr Martin Hirst 

I HAVE TO SAY IT: I have a grudging respect for Chris Mitchell, the former editor-in-chief of The Australian.

Under Mitchell’s leadership from 2002 to 2015, The Australian (The Oz) has cemented its place as the go-to source of news and opinion from the centre-right perspective.

Mitchell’s "take no prisoners" editorial style and his willingness to pick fights with anyone to his left (that’s a lot of people) has helped The Australian to survive for many more years than it should have.

Apart from a brief period in the 1980s and 1990s, The Australian has been a loss-making paper for most of its life. As early as 1975 Murdoch complained bitterly about the cost of producing a national daily broadsheet. The printing, transport, newsprint costs and the wages of journalists were all out of control in those days.

It’s not much different today. But ever optimistic, Chris Mitchell was bravely spinning the line that all is well at The Australian. According to Mitchell’s latest comments, The Oz is still making money on its subsidised sales to hotel guests and airline customers and News Corp is committed to keeping the title alive — even though it appears to be shrinking before our eyes.

According to Mitchell, the business strategy is a simple one: 

... trying to extract as much revenue from print as possible while building out newspaper digital businesses, national free site and special interest verticals such as — at the same time building paywalls where possible to generate consumer revenue.

This comes down to four key approaches.

Extracting revenue from print

This seems pretty obvious but it is a dead-end strategy that has been leading the print media into the dustbin of history for 30 years. That’s right, the rot set in three decades ago. Newspapers were once high-margin assets, meaning they generated good profits for their owners. Not anymore. There has been a lack of investment in print media for the past 20 years. Instead of installing new presses, old ones were closed at the end of their useful life — the ink is being bled out of newspapers. Eventually they will die. In his 2004 book The Vanishing Newspaper, Philip Meyer predicted newsprint would be dead by 2043.

This seems like a long way away now. Chris Mitchell writes that Fairfax may close its dailies The Sydney Morning Herald and The Age by the end of this year. And this is a rumour that Fairfax is not hosing down with any vigour.

He is being facetious, perhaps, but there is no doubt that the print model is finished. We’ve known that for some time, at least a decade. I wrote about it in my 2011 book News 2.0: Can journalism survive the Internet?

We still don’t have an answer to that question and the reason is quite straightforward and it relates to Mitchell’s three additional business approaches to saving the for-profit news industry.

"Building out" the newspaper digital business

This seems to mean offering something additional for digital subscribers. A sensible approach but expensive. It means hiring in resources to produce "assets" like podcasts and video. However, the evidence that these bells and whistles actually attract readers is line ball.

It seems our attention spans are shrinking as we engage more with meaningless vines and short video content. The longer the video, the less of it we watch online, according to the research. To expand the online offering you need content — which is expensive to produce in-house.

This is why we see so many of what Mitchell calls "special interest verticals", which is clickbait and "paid content" by another name. This is cheap content, much of it provided free, or as "native" advertising — that is, advertising disguised as copy written by journalists. It can also link to your company’s other businesses like, for instance, The Australians wine club.

Whatever its intrinsic value (and clickbait has none), content only works if it has an audience, which is why Mitchell refers to two seemingly contradictory strategies here: building a free web presence and trying to protect content behind a paywall.

Free content versus the paywall can you do both?

It seems a bit like having a cake while wolfing it down at the same time. The idea behind the free site is that advertising revenues cover your costs, while the paywall is aimed at convincing people that the stuff you charge for is worth it.

Does it work?

The consensus is that it probably isn’t working at the moment. At least, not working as well as the media executives hoped it would. There are two simple reasons for this.

The first is that digital advertising is cheap — about 10 per cent the cost of print display advertising. This makes it hard to recoup money from digital advertising and this is getting harder because of the intrusion of Google AdSense and Facebook into the market that print used to dominate. Apparently, asking “Does online advertising work?” is a dangerous question in some quarters. According to 2014 research funded by eBay, most online advertising is only effective at providing people with information they already know from other channels.

What about paywalls?

Paywalls work for those who are committed to a particular product or brand and who are willing to pay for a subscription. Turns out that most of us are not prepared to pay. No surprisingly then, considered opinion seems to be that paywalls cannot save the legacy media. Print circulations are falling globally and no doubt the boffins at both Fairfax and News Corp are desparately trying to work out which way to jump but no one is confident that paywalls will work.

One researcher writes that the future of paywalls looks "bleak". At the same time, the mass market tabloids that rely on clickbait headlines – "tits’n’arse" images of celebrities and gruesome pictures of tragedy – are relying on high volume clicks and the trickle of advertising pennies.

Daily Mail: king of the clickbait story

It is no wonder that many of us are worried about the future of decent public interest journalism as we witness a race to the bottom. It is not too far-fetched to think that the future of mainstream news websites will be in competition to provide the juiciest clickbait headlines, rather than serious news and analysis.

The explosion of so-called "lifestyle" journalism and its mad half-sibling "native advertising" may help keep Fairfax, News Corp, the Daily Mail and even The Guardian alive for a bit longer but at what long term cost?

If you scroll down far enough – yes, close to the bottom of the barrel – the same-same blandly commercial offerings of all the major news sites appears to keep the "real" news afloat.

Real estate, food, retail therapy and fad diet tips are the swamp in which public interest journalism must swim. And, much like the Rio Olympics, the water is best not swallowed.

Keep your mouth shut, consume, be silent and die.

This is a bleak scenario and one that will no doubt be worryingly familiar to IA readers and subscribers. The question is: What are we supposed to do about it?

Well, I mentioned at the beginning of this piece that I had a grudging respect for Chris Mitchell.

Here’s why.

I hate his politics and I think that The Australian is a diabolical mix of pro-Liberal propaganda and misleading anti-progressive commentary mixed up with a bit of politically and editorially motivated news coverage. I have never met Mitchell but judging from his public pronouncements and the observations of people close to him we would most likely end up hating each other.

Despite that disclaimer, Mitchell is not an idiot – or as he might put it – he’s not a "nincompoop" or a "dweeb". As a seasoned editor and someone with insights into how the "Newscorpse" brain trust (such as it is) works, it might pay to follow Mitchell at least as far as his questions — even if we reject his answers.

Mitchell recently asked a couple of very pertinent questions in his column; his answers were skewed pretty much to argue that The Australian and News Corp have got it right while everyone else is failing miserably but let’s not shoot the messenger just yet.

Mitchell’s first question: 

'Is the collapse of the once great Fairfax newspapers a threat to Australian democracy and accountability journalism?'

We need to broaden this out from a focus only on Fairfax. It’s a global question but perhaps it has local solutions. One that Mitchell is silent on (as it involves his master’s commercial interests) is the increasing tendency towards monopoly.

News Corp is in the process of buying the regional print assets of APN News Media for $36.6 million. This purchase will continue the canibalisation of the Australian print media and its concentration in the hands of only two providers: Fairfax and News Corp.

In Australia, Mitchell argues that for progressives, the only choices will soon be the ABC and The Guardian. He is not hopeful either about sites like Independent Australia, New Matilda and perhaps even Crikey:

'A host of other free news websites on the Left are for the high jump as their ads migrate to Facebook and Google.'

This might be wishfull thinking on Mitchell’s part. He’s no friend of the leftish media and would love to see them fail. Despite that we have to consider he may just be right about the fate of progressive news and journalism.

A smug Mitchell sees no problem in this scenario as it suits his political "alt-right" outlook and it suits the business interests of his boss Rupert Murdoch.

But for the Left it would be a disaster. Can you imagine a world where your only media options were News Corp publishing from the 'centre and the centre right' and a muddy pond of lifestyle reporting and anti-vax idiocy?

Who would hold the powerful to account then? How would we know verifiable fact from factualised fictions? How would we report on the things that matter to us?

I don’t pretend to have all the answers and maybe crowd-sourcing the news is the way of the future but sites like IA have to punch above their weight.

We have to have a business plan to ensure that we have readers and that correspondents will want to write for us (free copy only gets an editor so far).

We have to expand into the spaces deserted by the mainstream media. If there is no more agenda-setting journalism being done by newspapers, how can sites like IA fill the gap?

We have to be able to resource reportage, not just commentary — and we need to be sustainable.

This means two things:

  1. Increasing the subscriber base so that the publishing schedule can be secured.
  2. Improving the content so that No.1. above follows along and so that the revenue from advertising goes up.

Sustaining a publication like IA relies on having an active audience. And being active means more than just tweeting our stories, liking us on Facebook, or popping the odd comment onto the debate threads — though don’t stop doing these things as they are important.

Active means being a subscriber, if you’re not already.

Active means becoming a contributor rather than just a reader.

IA needs to hear from you. This is the time when citizen journalists need to step up. We need you to provide tips and information for stories we can follow up and, even better, we need you to start interviewing, researching and writing.

It is not impossible to imagine a future in which citizen reporters equipped with the latest in mojo technologies can make a difference.

In his recently published PhD (which I supervised) Ivo Burum describes citizen mojo as a communications revolution waiting to happen. He’s half right the tools for the revolution are here – mobile phones and reporting, editing apps – but a revolution is first and foremost about the people convinced that it is a good idea to be revolting and then having the nouse to get themselves organised.

Don’t be intimidated by the thought of being a citizen mojo and a contributor to IA: we are here to help.

The future of Australia’s democracy and of accountability journalism are intimately linked together: you know that, it’s why you’ve read this column to the bitter end.

If we leave the future in Chris Mitchell’s hands then we must expect a dystopian future to arrive here sooner rather than later. The road from Chris Mitchell to Big Brother is paved with good intentions.

'If you want a vision of the future, imagine a boot stamping on a human face — forever.' ~ George Orwell, 1984

If you want to believe and participate in something a little more appetising, then imagine a citizen journalist with a smartphone and a connection to IA being able to capture that moment and report it to the world.

That’s how revolutions start.

Read more by Martin Hirst on his blog Ethical Martini and follow him on Twitter @ethicalmartini. His book News 2.0: Can journalism survive the Internet? is available here.

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