The survival of former Fairfax papers The Sydney Morning Herald and The Age as independent voices will require a ritual sacrifice from Nine if the company wants readers to believe its serious about severing its Liberal links.
Both the company’s Liberal Party fundraiser and CEO Hugh Marks’ subsequent “apology” — waiving off journalists’ concerns as “perceptions” — suggest the company just doesn’t get the challenges the mastheads face. Nor how important their independence — both real and perceived — is for their survival in a competitive market place.
In merger talks last year, outgoing Fairfax boss Greg Hywood boasted that Fairfax’s “Independent, Always.” DNA would endure in the new company. Now it appears that both in politics and business strategy, the new Nine DNA is overwhelming the interests of the metro mastheads.
Company management may be confident they’ve weathered the storm of reputational damage over Marks’ decision to host a $10,000-a-head fundraiser for the Liberal Party in the company’s Willoughby headquarters. But the lack of kickback on, for example, social media is not a sign that the storm has passed; it’s a sign that the integrity of the mastheads is, in the minds of many readers, already underwater.
The Nine takeover of the mastheads was always going to threaten the independent stamp. Readers who considered themselves “Friends of Fairfax” were in a mood to be sceptical. For many (Crikey readers among them) the takeover by Nine helmed by Liberal grandee Peter Costello was the final straw.
The company’s recently released end of financial year figures suggest that in the 12 months since the Nine-Fairfax deal was announced, its metro media subscription revenues — the key indicator of readership engagement — have gone sideways. Worse, about two thirds of this income (and two thirds of the masthead’s advertising revenues) is still coming out of the print products where it’s reliant on travel ads targeted at aging retirees.
The company doesn’t release detailed circulation figures, but publicly available data suggests there are about 350,000 digital and 150,000 print subscriptions across the SMH, The Age and The Australian Financial Review well behind its News Corp competitor.
These past few weeks, reader perceptions will have worsened, with the fundraiser imbroglio reinforcing concerns that the SMH and Age are now hostages in a Liberal-aligned group. It reinforced day-to-day challenges — such as Macquarie broadcaster Alan Jones’ attack on Jacinda Adern and news presenter Chris Uhlmann’s Twitter provocation over bathrooms.
The business strategy outlined in Nine’s annual report is about building mass advertising channels, such as through entertainment or video-on-demand where dollars are up. The company’s goal, it says, “is to increase its digital advertising revenue via growth in audience and inventory and an increased focus on growing premium revenue”.
The importance of mass advertising markets to the company is reflected in Nine’s campaign to build nine.com.au as the news website of choice, in competition with News Corp’s news.com.au. The masthead sites, on the other hand, are behind increasingly hardening pay walls.
What limited journalism integration there is (such as the 60 Minutes special on Crown Resorts) seems to benefit the Nine brand over the mastheads. The mastheads have added Nine personalities to their writing roster (particularly on rugby league in the SMH) and have been used to continue to push Domain and Stan (as they did before the take-over).
Mass advertising is a good plan for the Nine network. It plays to the company’s core competencies. The audience for those advertisers in broadcast entertainment and sport aren’t likely to be fussed (or surprised) about the Liberal alignment.
But the mastheads rely on ingraining trust to engage readers who are prepared to pay to access the content, and promote it through likes and shares. As News Corp becomes more right wing, the “Independent. Always.” positioning increases in value.
But to monetise that value, Nine needs to send an unequivocal message that it is willing to truly incorporate it into the DNA of the broader company.