Mr Murdoch is reported to be smiling once more, or at least his investors are. News Corp’s shares are up nearly 7% on the back of increased revenues and earnings from book publishing, education and realestate.com.au.
The news division, separated off from the high-earning bits of the company in 2013, is still declining as a source of income but not by as much as before – 3% year-on-year, to be precise. This prompted CEO Robert Thomson to declare that “the Murray River was silted up, and now it’s flowing again”.
In this publishing economy, that’s something to be pleased about. The Australian is still losing money, as are premium News Corp titles in other markets such as the UK and US, but overall earnings for shareholders are nonetheless up by 21%.
At Fairfax, meanwhile, publishing revenues are also down by “2-3%”, but like News Corp, slowing pace of decline in its journalism business is offset by revenue growth in its non-news divisions such as real estate offshoot Domain, up 21%.
Coverage of these “moderate” declines has been largely positive, with The Australian reporting that “News Corp’s bet on newspapers opening up new avenues with audiences in the digital age is paying off”. In the same article, global CEO Thomson declares that the company’s Australian newspapers have “turned a corner”.
I take away two observations from these figures. First, the decline of print journalism continues, as readers move from newspaper to digital platforms. That is an irreversible trend, and although the death of print may yet be a long way off – whoever imagined, when those first CDs came out in the 1980s, that there would still be a market for vinyl LPs in 2014? – the end of its historic dominance as a news consumption platform is rapidly approaching.
The monetisation of digital journalism proceeds, moderating the decline in print revenues but not entirely replacing them. Perhaps it never will.
Hence my second takeaway. In the digital era journalism cannot be profitable as a stand-alone capitalist enterprise. Not journalism as we have known and valued it, at least, given any foreseeable future estimates of online user numbers and digital advertising revenue.
Shaun Micallef’s Mad As Hell this week lampooned Fairfax’s most recent round of newsroom cuts with a hilarious, if scarily resonant sketch about a local newspaper produced entirely by an untrained cadet with grammar and spelling issues.
The future of “quality” journalism – by which I mean the products of news media adequately resourced for original investigative work, international coverage and other expensive, labour-intensive outputs – will depend on one of the following approaches.
Cross-subsidy on the News Corp model, for example, has kept The Australian, The Sunday Times and other Murdoch titles afloat for years. The issue here is: for how much longer will News Corp shareholders support the maintenance of loss-making news media, especially after the powerful founder is no longer around to advocate for the journalism which he undoubtedly loves? This model requires sustained support by individuals and corporate boards, and the readiness of shareholders to think beyond profit maximisation.
In the old days, media barons, notably Rupert Murdoch, used their newspapers as megaphones for the wielding of ideological and political influence. Today the power of the press, such as it was, has eroded in the face of digital proliferation of news sources and the fragmentation of audiences. The incentive for powerful men and women to own loss-making news media is declining.
Then there are the various forms of public support and sponsorship of journalism, such as the non-profit trust model of the UK Guardian, or the donations readers make to one of my favourite sites, The Scottish Review (which make it independent of advertising).
Cultural philanthropy of this type has played an important role in the maintenance of journalism down the years, but has the obvious drawback that it produces clubby, cliquey titles which – and this is no criticism, just a statement of fact – service special interests, or preach to the converted, rather than reach out to the broader public.
State subsidy is another approach, but outside of some European countries not one adopted by liberal capitalist societies where press freedom is deemed to be irreconcilable with reliance on the state for income. The publicly funded ABC and its counterparts around the world such as the BBC have been legally protected from government interference since their foundation, and continue to enjoy public support for their journalistic work. But even these behemoths often struggle to get the government of the day off their backs.
The financial viability of independent, quality journalism is a hard nut to crack in the digital age, then, and despite the encouraging figures from News Corp and Fairfax this week, remains elusive. Which is not to say that there is no solution – perhaps that Zuckerbergian entrepreneur who can truly change the game is right now sitting at a computer somewhere in the world.
Until he or she emerges, there is only one way to ensure that you have access to decent journalism not just tomorrow, or next year but in a decade or two – pay for it, as you pay for your water and your council services. Support those who make it with your subscriptions and, for non-corporate providers, donations.
As consumers of news we have power, and we must increasingly use it to support the media we want to see survive.