In a trading update presented to a finance conference in Sydney today, Fairfax Media CEO Greg Hywood revealed the company is preparing to abandon much of its direct print involvement for a full-time digital model. For the first time he flagged Fairfax is looking at cutting print editions during the week and moving to a 24/7 digital model (which the likes of the Financial Times, New York Times and Wall Street Journal are rapidly embracing).
Hywood told the conference the company’s metropolitan publishing titles (The Sydney Morning Herald, The Age and The Australian Financial Review) will move to the new publishing model in future years in a “future sustainable, profitable publishing model”. He didn’t put a date on it, but it would seem from his speech that it will be sooner than later. Perhaps the current job cuts of around 120 journalists jobs at the metro papers is the first hint of this move.
He said Fairfax is foreseeing a possible outcome where the revenue model for the SMH and Age is “reset to focus on the 65% of advertising revenue which is generated on the weekend”. The AFR print edition would “likely focus on its weekday revenue strength”, he added. This is also the model that the Independent in Britain adopted after its Monday-Friday and Sunday editions stopped being printed at the end of March. In a statement to the ASX which carried highlights of his conference speech, Hywood warned:
“It should surprise no one, and certainly not us, that the seven-day-a-week publishing model will eventually give way to weekend-only or more targeted printing for most publishers … Quite simply it is likely that one day, the viability for newspapers on current trends will run out. It isn’t going to happen overnight — but eventually it will.
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“People have accused us of being too pessimistic about print — perhaps it’s more a case of being too honest for their liking. We prefer telling it like it is and planning for it.”
The timing of the shift, he said, would depend on the view Fairfax forms about trends in consumer and advertiser behaviour:
“All the signs indicate it is inevitable — although some time away. We understand that people are focused on Metro publishing — what we have outlined today is a very frank, transparent view of the potential future.”