On Monday we kicked off our “If I ran Fairfax” series by asking a collection of veteran Fairfax watchers what they would do to transform the company into a thriving business. Would they follow the Greg Hywood strategy or take a different approach?
Today, a Johannesburg-based journo, a Liberal Party election campaign veteran, a leading ad-man and a former editor of The Age weigh in with their ideas. And, yes, we’ve asked Gina Rinehart what she’d do if she was in the hot seat -- no response so far …
The advertising executive: Russel Howcroft (Gruen Transfer panellist and CEO of George Patterson Y&R)
If you look at a newspaper from the past (say the late 19th century) they had the advertising at the front of the book. Editorial at the back.
First and foremost newspapers provided a platform for commerce, via the promotion of products and services, to take place. (Some papers even had a masthead The Advertiser.) The creation of commercial connections via the advertising provided the revenue in order then for the paper to be more than listings.
Over time, what appears to have happened is the advertising people lost power and were moved to the back of the book, and a worse floor in the building, as editorial took control. Newspapers became less and less a platform for advertisers and more and more a platform for opinion. Indeed the opinion people now have so much power over the product that the reader is asked to endure little advertising -- which subsidises the opinion -- and pay for what was always thought of as tomorrow’s fish and chip wrapping.
Media provides advertisers with a platform to create demand and generate sales. Google is what it is (in commercial terms) because it is a new and incredibly powerful advertiser platform. Facebook value is under question because there is concern over whether indeed it is a media platform (i.e. a place for advertisers and thereby highly valuable) or whether it is just an infrastructure where conversations and connections can take place.
What I wonder about is whether taking your journalism on-line has the advertiser in mind. And whether, first and and foremost, there is a desire to create a platform for commerce.
Perhaps, if I were to run Fairfax, I would change its name to The Fairfax Advertiser -- a move which would provide focus on where incredible value lies.
The journalist: Geoff Hill (Johannesburg bureau chief, The Washington Times)
Media is no different from any other business: it must have income enough to pay salaries, grow the product and return a dividend to shareholders (unless you’re the ABC).
For a decade, I published a travel magazine. When we charted our revenue, the money came from advertising followed by circulation and promotions. Like pilots and cabin crew in an airline, our writers steered the plane and made passengers feel good, but they didn’t sell tickets or freight.
The most important people at Fairfax are ad staff. They know the reader demographics, and they tell clients how many women earning $100K+ take The Australian Financial Review or what per cent of Sydney Morning Herald readers will buy a new car in the next 12 months.
I’d pay my sales people huge, fat commissions to bring in the bacon. I’d give them luxury cars, bling phones and good expense accounts, and fire those who didn’t make budget. On my board, more than half the members would have turned one dollar into two, and done it well.
For all the nonsense about advertisers interfering with editorial, I have yet to see one attempt. But I have seen political ads knocked back by editors. I would ensure zero interference of advertising in editorial and vice-versa.
When I worked on The Australian, the late Les Hollings hired people who knew a particular industry, then taught them how to write. If they weren’t that good at words, subs could sort it out (another group I would pay especially well). Thus we had a BSc Agric writing farm stuff and a computer buff on technology. Major Peter Young wrote stories on defence that were regularly mentioned in Hansard.
I mentioned accountants, and a team who understand how money works will be vital. The accounts department will monitor our progress, stave off creditors, guard the cash flow and make sure there’s enough every week to cover bills and salaries. But like the board, I want my steering team to know how to grow money, not just arrange it in columns.
So what about the crash in circulation? In London, The Independent has come up with a brilliant idea. They produce an abridged copy for sale at 20p (around 30 cents) while the main content is in the big edition and, increasingly, on line. In time there will only be the small printed version and a website. I would use this model for SMH and The Age.
Freedom of the press is essential -- but it isn’t cheap. Someone has to pay for the bureau in Baghdad and for sales people who love and understand the product.
The spin doctor: Toby Ralph (corporate and political marketing adviser)
Fairfax is a horse and buggy that wants to be a car. Not long ago newspapers were where we found out what’s happening, but irreversibly daily atoms are giving way to continuous bytes and mass media is surrendering to micro.
We’ve never been prepared to pay full price for general news, and won’t suddenly change. Provision of it has been a community service subsidised by the $13bn advertising industry, hungry for reader eyeballs. Within two years, 50% of that expenditure will be on the web – delivering more targeted, engaged audiences more cheaply, thus prising open more wallets for less.
Mass media must not only change, but learn to monetise change.
The new model must deliver paid-for personalised “me’” media -- news & information individuals want, online, continuously. This means fewer, better, higher profile journalists, skinnier management, specialist micro mastheads and a board that knows digitalia and marketing.
As owner I’d adopt a fix and flog strategy. Value will continue to evaporate, so I’d do it fast. First sell rural papers while their value endures. They’ll make $155m next year; a sale would eliminate corporate debt immediately.
Then sell Singleton the radio, Rinehart the Financial Review, learn to harvest the 7.1 million unique Fairfax visitors while tabloidising the metro dailies, gearing them for sale to Telstra, or a mining magnate.
Commercialise the core business of the newsroom, recognising that quality content is saleable to others. Subsidise investigative reporting with philanthropy. Toughen copyright protection so TV and radio co-fund content or can’t use it. Properly managed, there’ll be $2 billion cash, no debt and a residual business with a strong future.
The ex-editor: Michael Gawenda (former editor-in-chief of The Age)
Our challenge is produce high quality journalism with significantly fewer journalists, so we have to explain what our journalistic focus will be which means we will have to be clear about what sort of areas we will no longer cover. And why. We will need to be absolutely clear, for our readership and our advertisers, about our position in the market, which unashamedly will be at the top end of the market.
Beyond a few clichés, there was nothing in our recent announcements that truly examined our journalism and how the journalism can be used to define our future. We must produce journalism that they can’t get anywhere else. We can’t cover everything we cover now with fewer journalists.
We certainly need less celebrity stuff that does not build brand loyalty, that is not unique and that has no attraction for advertisers.
Sections such as Epicure and Green Guide in The Age should be spun off as separate businesses, allowing Fairfax to use our brand strength to exploit what digital platforms have to offer: video, audio, updates, and a two way conversation between journalists and their audiences.