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Jan 16, 2013

Guardian at the gates: Oz play bad news for Fairfax

With The Guardian announcing its expansion into Australia, what does more competition mean for local media players? It's probably not good news for Fairfax.

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The Guardian‘s decision to launch an Australian edition of its phenomenally successful website is likely to drain advertising dollars from existing online players and put further downward pressure on ad rates, according to a top media buyer.

The Guardian, the third most popular newspaper website in the world, announced overnight that it will launch an Aussie edition this year backed by an investment from Wotif founder and Greens donor Graeme Wood. Deputy editor Katharine Viner will head the local operation, to be based in Sydney, and has said that positions will soon be advertised. The paper opened a digital newsroom last year in the US with a staff of around 40 people.

Mat Baxter, CEO of media buying agency UM, says The Guardian‘s arrival down under poses a threat to online players — especially Fairfax’s popular smh.com.au and theage.com.au sites.

“This could be a serious blow to Fairfax,” Baxter told Crikey. “The Guardian would appeal to your quintessential Fairfax reader … I’d expect them to attract an influential, well-off and well-educated audience that advertisers are typically keen to reach.”

The Guardian already boasts a local audience of 1.3 million unique browsers a month compared to around 6 million for the SMH, 4 million for The Age and 1.8 million for The Australian.

Baxter, whose firm recently won News Limited’s media agency account, says The Guardian‘s arrival is bad timing for Fairfax given the metro sites are due to launch metered paywalls in March.

“You can imagine that when Fairfax puts up a paywall it will be met with a degree of resistance and people will be looking to see if they can get similar content for free. That doesn’t matter if there’s nothing similar out there. It’s different if a competitor enters the market with a similar style and gives the content away for free. That could push a large number of existing Fairfax readers into The Guardian,” he said.

“They’re going to have to be even more on top of their game when it comes to rolling out the paywall strategy.”

Despite the vogue for paywalls around the world, The Guardian has so far stuck resolutely to the strategy of giving all its content away for free.

Baxter says The Guardian‘s arrival will make it tougher for online media outlets trying to squeeze money out of advertisers given its already a “buyers’ market”.

Private Media, which publishes Crikey, targets a similar affluent demographic as Fairfax.

Fusion Media analyst Steve Allen, however, says Fairfax websites will retain significant advantages over their new competitor — especially in terms of news breaking and coverage of local sports.

The New York Times has also kept its audience numbers intact while going behind a paywall despite The Guardian ramping up its US presence in recent years.

It’s unclear how much money Graeme Wood has invested and how his involvement will impact on his troubled local philanthropic venture The Global Mail. The Guardian‘s announcement does not mention any collaboration between the sites although Global Mail CEO Jane Nicholls tweeted this morning that they will be working together.

Crikey understands staff have been assured that Wood, who did not respond to requests for comment, will have an arm’s-length relationship with the venture and will have no say over editorial or operational decisions. The Guardian has also flagged to staff that it will seek out partnerships over coming months with other media outlets, blog networks, cultural institutions and big brands.

The Guardian‘s CEO Andrew Miller has described the Australian expansion as “an innovative and effective way of leveraging local partnerships, investment and expertise to fund our content responsibly, reinforce our global brand and harness the full power of open journalism”.

The Guardian embarked on another round of cost-cutting late last year, announcing in December it would cut a further 70 editorial jobs on top of the 30 voluntary redundancies it accepted in September. Despite lifting digital revenues by 16.3%, The Guardian and sister paper The Observer — which are heavily subsidised by profits from UK used car magazine Auto Trader — reported losses of 44.2 million pounds last July.

Matthew Knot —

Matthew Knot

Crikey media editor

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16 thoughts on “Guardian at the gates: Oz play bad news for Fairfax

  1. tonyfunnywalker

    The Guardian in Australia may be bad news for Fairfax but great news for online readers and advertisers especially exporter who consider the UK as a key market.

    The March Launch is well timed as it coincides with the British and Iriah Lions tour and further enhanced by the Ashes tour later in the year.

    The Lions Tours have huge following in the UK as they are the capstone of Rugby Union beyond the World Cup.

    I would think that the Guardian has a following in Australia already (I am a Kindle subscriber).

    The point Matt makes is probably true as I am a subscriber rather than a blogger Journalist and I subscribe to Crikey for the same reason as I subscribe to the Guardian – good journalism.

    The Guardian will take readership from all (all new products do ) but they will take greater share from the largest) so News will lose in relation to its current share of on-line readership.

    They could also expand the market for line readership (in other words attract new on line readers to a paywall) as in this case there is no print alternative.

    To defend itself Crikey does not cut price but establishes a niche position so as to defend its readership.

    At the moment Crikey is the alterantive to the poor quality and bias of on- line journalism elsewhere, its needs to become a fixture in the face of the new competition.

    And in my case a News Ltd monopoly of print media in Adelaide.

    There is likely to be brand churn where the Guardian offers a similar format. This the OZ and the AFR are prime candidates (both already have paywalls), the OZ more so as it does not have any distinctive attributes beyond its new competitor other than contributions from other News stablemates such as the Times and WSJ whereas the Guardian has a complete set intrinsic attributes for on line delivery under the same brand.

  2. Mike Flanagan

    Maybe a little off topic floorer but my following comments do have some relevance
    Many of us must find it both irksome and offensive the continued and persistent Fairfax editors, subs and management’s purposeful use of the leader “Gillard” rather than the correct nomenclature “PM” or “Prime Minister”.
    To my mind, it displays a reckless denigration of the Office of Prime Minister and only serves to reinforce their past two years of abject sexism displayed to Ms Gillard by many of their Canberra scribes.
    It cannot be justified by demands on layout space or subbing requirements, and so can only be judged to be an effort to subtly reinforce the political bias against the female holder of this eminent office.
    In fact, this mornings AFR broadsheets found one of their critical commentary articles of such import they posted it twice on their digital publication.
    Undoubtedly Ms Gillard has had some policy and implementation stumbles that needed to be exposed by the press, but it also should be recognised her unflinching focus on the challenges confronting this nation has served us well, and the eminence of the office she holds.
    We only have to have a cursory look at the alternatives to our present government to see the success that Ms Gillard has displayed with her minority government’s tenure as compared to the vacuousness of what is currently on offer by the Abbott opposition and his Tea Party supporters.
    All the MSM ignore her accomplishments and her devotion to confronting and resolving our national challenges and when they do rarely concede her achievements they display a denigrating acknowledgment of her many successes.
    Ms Gillard may lack some of the charismatic eloquence of some of her Welsh forebears but it is time that our scribes understood that she was not given the office to display bells and whistles and dance to the Canberra scribblers club’s tune.
    The well known Australian political sport of cheeky larrikinism has its’ place and moments, but the continual denigrating public display by the Fairfax press to the Office of Prime Minister of the Nation actually undermines one of the basic tenets of democracy itself, respect for the offices and the occupants.
    One can only hope that the Guardian, in its’ local edition, will bring a bit of British journalistic and publishing decorum for the highest office in the land and if they do, they will quickly undermine the Fairfax and Murdoch circulation figures.
    While I, for one, have no misgivings about the Murdoch rags’ possible demise, it would be a shame to see the Fairfax broadsheets follow them, regardless of what format they are offered.

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