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). Read the rest of this entry »