Britain’s Independent will no longer be available on newsstands from next month, its owners announced over the weekend. Meanwhile closer to home, today’s Australian brings news of a 2013 management consultancy report that suggested Fairfax “consider the future” of “more peripheral titles” like the Canberra Times (down 18% in circulation year-on-year, according to Friday’s figures).
In Australia, the operators of Australia’s major papers have been staving off rumours of their imminent demise for years. At Fairfax, the answer is that the company will keep printing papers until it is no longer profitable to do so — there are still significant revenues associated with its print products. At News Corp, the answer is more robust: the company’s executives are forever extolling the “magic” of print.
But although the trajectory of print circulation declines has slowed — and some papers, like The Australian, have managed to keep circulation more or less steady — none have managed to achieve lasting circulation increases. The trend is always down, and at some papers, it’s happening very quickly.
But newspaper operators haven’t been idle. Here are some of the ways they’re pushing back the day when they have to kiss print goodbye.
Papers have always been funded by both cover prices and advertising. But as print ads have fallen, the ratio has shifted, with cover price increases helping make up some of the lost revenues.
In the past decade, the cover prices of Australian papers have risen out of all proportion with general inflation.
In 2009, you could buy a copy of The Australian for $1.50. The Daily Telegraph went for $1 on weekdays. The Age and SMH went for $1.50, while the always pricey Financial Review went for $3. Now the Fin will set you back $4 at newsagents. Fairfax’s Age and SMH go for $2.50. The Australian is $2.70, while the News Corp tabloids go for $1.40.
Some newsagents complain that some of these price rises have been accompanied by even larger increases in the cost charged to newsagents for the papers — the net effect being that newspaper publishers keep more of the profits from selling a paper to themselves.
Cover price rises help tip the economics of printing closer to a user-pays model. Instead of copious advertising subsidising the cost of production, readers pay more of it directly.
Many aspects of Australian newspaper production have been outsourced. Layout and subediting are often done (not very well) off-site, or even, as Fairfax is doing, in New Zealand, where a lower currency helps make it even cheaper to produce Australian papers.
Supplements can be outsourced too — as happened with Fairfax’s Drive last year.
Get rid of journalists
Perhaps the most obvious way newspapers have cut costs is to cut their workforces through large redundancy rounds.
Since 2012, it’s estimated that one in five Australian print journalists have been made redundant. These redundancies have fallen on journalists in the middle of their careers, affecting lots of reporters in their 30s and 40s, as well as those close to retirement anyway.
Australian newspapers are now filled with the bylines of relatively cheap but hardworking reporters in the early parts of their careers, and of very senior specialists. The middle levels — on decent salaries — have largely gone.
Print in the country
The quirks of industrial organising offer ways to cut costs too. The union award for printing plant works is 30% higher in metropolitan areas than it is in the country. That means there are significant savings to printing in the country. In Melbourne, for example, The Age is printed in Ballarat, giving Fairfax the ability to flog off its metropolitan Tullamarine printing plant, which it did last year.
The trade-off is that printing in rural areas means it takes longer to get the paper back up to the city, so deadlines have to be earlier. This can make papers less relevant the next morning than they would otherwise be.
Sold! Real estate ads the final cash cow
Classified advertising operates most efficiently on the internet. Why browse, after all, when you can search based on designated parameters? It’s cheaper for the seller to take out an ad online too. Platforms like Seek, Carsales and Domain match up buyers and sellers more effectively than newspapers ever did.
This is as much the case for real estate as it is for anything else. But the real estate market, still more or less booming, is dominated by big-name firms that rely on print advertising. Taking out an ad for a house in a newspaper is more about marketing the agent to other potential sellers and buyers than it is about marketing the property. And best of all, the cost of newspaper advertising isn’t billed directly to the people placing the ads, but to the people selling the houses — part of standard marketing packages that get little scrutiny from the average vendor. So print ads for real estate aren’t as responsive to technological change and efficiency imperatives as are most types of advertising. They’re not going anywhere.
News Corp and Fairfax both have stakes in highly profitable online real estate search platforms. But they’ve fed that advertising into the papers too, through dedicated and ever-growing real estate supplements.
Cut editions, pages
There’s always the option of doing less with less.
The decline in advertising has shrunk the size of Australia’s major papers markedly. Fewer articles means a paper can employ fewer journalists to put out a daily product.
Already at some Fairfax regional papers, one response to falling circulation has been to cut the number of editions printed every week. This could eventually be done for the metropolitan papers too. Figures show for Australia’s largest papers, the weekend editions enjoy the strongest circulations, while Tuesdays drag the average down.
Freebies and promotions
Readers can always be lured in with freebies or discounts.
News Corp’s doing this right now with its Dr Suess promotion — buyers of the tabloids can get a discounted book. Last year, News Corp Australia exec Damian Eales told a global conference that promotions were “slowing print circulation declines”. Though News Corp has to first buy the products it is selling or giving away to customers, previous promotions have seen the publisher come out with a profit, he said.
Of course, the most direct way of boosting circulation through giveaways is to give away the paper itself. Discounted copies of major papers are often given to airlines, hotels and schools. The Australian, whose circulation has held up relatively well, relies on putting copies out there in this highly discounted manner for 20% of its circulation, according to the latest circulation figures.