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.

Matthew Knott

Former Crikey media reporter

The Guardian office

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 and 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.

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

  1. Mark Duffett

    The Guardian move into Australia ‘bad news for Fairfax’? I’d have thought it not entirely wonderful news for Crikey, either, for the same reasons (similar target audience).

  2. Limited News

    Comparing the betrayal of Assange by the Guardian (the journos involved must be making a mint out of the film deal) vs Phil Dorling’s work at Fairfax, I think Fairfax is preferable. Hope the readership intuits that somehow.

  3. paddy

    Agree with Mark Duffett. Crikey may well be at risk with the Guardian stalking eyeballs.
    Time to hold that unique cast of contributors close to your heart & your wallet Mr Beecher.
    Hopefully, The Guardian will pinch the best talent from Fairfax & what’s left of Rupert’s rabble.

  4. Matt Stevens

    This is possibly the silliest silly season story I’ve read this year. For one, there is no sign that The Grauniad will be hiring reporters. (Would they do so for such a dubious venture when they’re sacking people at home?)And I simply LOVE the fact that your source on impacts on Fairfax is the News Ltd agency. I LOVE that.
    Dear Knotty: if they don’t invest heaps in local reporters then the site in Australia will be – hold it – the same site we can see today.
    This is 1000% spin and puff.

  5. Matthew Knott

    Hi Mark & Paddy. Was a quick turnaround this morning. Have added the line ‘Private Media, which publishes Crikey, targets a similar affluent demographic as Fairfax.’ Also FYI, my understanding is that Crikey relies predominantly on subscriptions, not ads, for revenue.

  6. Saugoof

    Bad news for Fairfax maybe, but excellent news for me. I still like the printed edition of The Age, but the website in recent years has become little more than celebrity fluff and meaningless clickbait articles.

    That was the major reason why I ended up taking out a Crikey subscription and read sites like The Guardian for non-local news, so I’d echo the concerns of others that this isn’t necessarily good news for Crikey either. That said, I have every intention to renew the Crikey subscription when it runs out.

  7. Mike Flanagan

    Mark and Paddy;
    I venture to suggest Crikey could see it as an opportunity rather than a threat.
    It must be very difficult to lead when their no one to gauge yourself by, or other viable competitors
    The Guardian could invigorate the minnow Crikey into a fully fledged swimmer with the great and mighty of the press.
    Competition can be a positive we have all been taught.
    But there is an appealing australianess in Crikey the Gaurdian will find hard to replicate.
    But I certainly look forward to their arrival, so bring’m on, the more the merrier!

  8. CML

    Have been reading the Guardian on-line for years – an excellent newspaper. Can’t wait for the Oz edition. As far as the effect on Crikey is concerned, let’s wait and see how “local news” oriented the Guardian down under turns out to be.

  9. Mike Flanagan

    While I do look forward to the arrival of local edition of the Guardian it is with a tinge of anxiety for the Conversation rather than Crickey that I feel.
    Crikey has the structural flexibility that I suspect the Conversation hasn’t.They are both unique and quality rags and I do hope The Guardian does approach their establishment in this country with sesitivity and consideration of the contribution both the Conversation and Crikey have offered to the national debate.
    It is a senseable move but needs considerable commercial and cultural sensitivities applied to be successful.
    Having been a reader the Guardian for many,many years I am confident they have the financial and intellectual wherewithall to effect an ethicaql and commercially viable addition to our fourth estate.

  10. 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.

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