Is this the end of The Age (as we know it)?Posted: June 22, 2011
My family let our subscription to The Age lapse the other week. It’s not that $419 p.a. isn’t good value – we’d be prepared to pay a bit more if we had to – it’s just that no one in the household reads the print edition of the paper anymore. And we no longer have to pay anything to read The Age electronically!
My wife has a free six months subscription to the iPad version and I read the free online version. More often than not, the home-delivered paper version never got unrolled. So when the decision came to renew for another year there was no point in pouring another $419 down the drain.
Maybe if the circulation department had followed up with a sweetener we might’ve changed our mind out of habit or because the idea of not reading The Age every morning over coffee and croissants is ‘unMelburnian’. But the company didn’t seem overly bothered about losing us (unlike, for example, lean and nimble Crikey, who worked harder at getting me to resubscribe).
Fairfax is having serious problems with its papers. As I understand it, the Sydney Morning Herald is on the verge of going into the red and The Age isn’t far behind. For Melburnians, there is a high probability that The Age as we know it will disappear from newsstands sooner rather than later.
The problems for Fairfax, the company that owns these papers, started with the enormous drop in revenue from classified advertising. These were rightly called “rivers of gold”. Older Melbourne readers might remember the advertising slogan “icpota” (“in the classified pages of The Age”). Fairfax wasn’t very successful in adapting to the online world – companies like car.sales.com, seek.com and eBay stole its market dominance. Nor does the company seem much better today – only last year my Fairfax-owned local paper, the Banyule & Nillumbik Weekly, was blindsided by a newcomer, the Weekly Review, which took over virtually all its real estate advertising. This week the Fairfax paper is 20 pages (with one half-page real estate ad), the Weekly Review is 96 pages (with 79.5 pages of real estate ads).
Another problem for Fairfax is the well known shift of readers (like me) to online media. The company feels it has to have an online presence to “stay in the game” yet it’s too nervous to put up a paywall for fear it will lose readers to other online sites that stay free. It’s earning modest revenue from (awfully intrusive!) online advertising, but Fairfax’s experience with putting its third paper, the Australian Financial Review, behind a paywall hasn’t been positive. The AFR lost visibility because it couldn’t be accessed by search engines, giving newcomers like the online Business Spectator a free kick. From what I can gather, the financial situation of the AFR isn’t healthy either.
New Fairfax CEO Greg Hywood has a plan to turn around the ailing fortunes of Fairfax’s three major newspapers (BTW, Fairfax also owns other assets e.g. 3AW). It seems he’s proposing to put all three online papers behind a semi-permeable paywall where most content is free, but premium content requires payment. This approach would allow search engines access to the site but still leave scope to earn revenue from subscriptions. The New York Times recently moved in this direction – it offers 20 free views per month before requiring a subscription (although if you come to the Times by clicking a link on someone’s sites that doesn’t count toward your 20).
That sort of model will work for me and I’ll readily pay. Like most people, however, I expect online delivery to cost less, so I’ll baulk at anything approaching $419 per year unless it’s offset with added value (an organisation like Fairfax should have the scope to devise some interesting packages).
Mr Hywood is also looking to “quality journalism” to give Fairfax papers a competitive advantage with the lucrative high-education, high-income AB demographic (now apparently known as OG1). I haven’t seen any evidence of this new strategy yet, apart from a slightly more sophisticated layout in the print version (which obviously isn’t enough to maintain my subscription!). He subsequently announced sub-editing would be out-sourced to a private company. That’s not necessarily a bad thing — cost structures need to reflect the lower revenue of today — but it won’t do much to improve the quality of journalism (although if it means we have fewer execrable puns in headlines then in my book it’s an improvement in quality!).
I don’t know what Mr Hywood has in mind when he says quality journalism, but I think his emphasis on this aspect is very important for the long-term viability of media like The Age. In my view the problems aren’t all external and can’t all be solved by getting the right sort of paywall and technology. While it has capable reporters there are problems with the management and editorial direction of The Age – sometimes it seems that no one at Fairfax actually want to make money! Maybe that’s the opportunity Ron Walker sees.
I said at the start that I’d pay more to subscribe to The Age if I had to, but that has more to do with there being no alternative than it has to do with the excellence of the product. If Fairfax wants to maximise the future subscription price and deliver more readers to its advertisers, it will need to improve the editorial offer (which I expect will be solely online before long). I have some views on these aspects which I’ll post shortly.