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Job cuts, strikes, ‘structural change’: the uncertain future facing quality newspapers

Journalists don’t like to strike. Their job is about working under pressure to deadlines. In their eyes, missing a deadline is sin. But last night journalists across several of Fairfax Media’s newspapers…

Strike action by Fairfax journalists show they are prepared to fight for quality journalism. AAP

Journalists don’t like to strike. Their job is about working under pressure to deadlines. In their eyes, missing a deadline is sin. But last night journalists across several of Fairfax Media’s newspapers voted to abandon their post for 36 hours.

The reason: management cost cutting will force 66 sub-editing jobs offshore to New Zealand. It is no secret that the newspaper business is facing tough times. There are also whispers that there might be more job cuts announced soon at Fairfax’s rival News Limited too.

You only have to look at the latest Australian circulation figures to see a snapshot of a general problem for metropolitan newspapers across the developed world. The local figures again confirm that the old business model for Australian print newspapers is in perilous decline. This is nothing new. The long-term trend has been downward for most metro print circulations since the early 1990s.

Owing to online migration, advertising revenues have weakened and with the plethora of free choices for sourcing news and information, so too have print circulations. The digital era and GFC have accelerated the falls. But other factors pre-dating the internet also account for the steady decline. Cultural and lifestyle changes eschew the leisurely daily read, and media law reforms have also played a role in the steady slide of Australian metropolitan newspaper circulations.

The latest Audit Bureau of Circulation figures released this month for the January to March quarter is a snapshot that further dispels the myth that Australia’s print newspaper industry is less vulnerable to the damaging trends affecting newspapers in the West.

The figures showed bigger than usual falls for Fairfax’s print broadsheets. The Sydney Morning Herald’s print circulation fell by more than 13%, compared to more than 11% in the last audit. Its Saturday circulation dipped below the psychological barrier of 300,000 for the first time to 293,234.

In Melbourne, The Age’s Saturday paper fell 12.4% and is now reported to be 241,029. The masthead lost more than 13% on its Monday to Friday sales, bringing it to 165,091. Some weakening could be attributed to Fairfax cleaning up its sales by ending freebies and giveaways, but it is still a long way from the heady days of the 1980s when its Monday to Friday sales peaked at 250,000.

A case can be made that Australia’s concentrated media ownership — the News Limited and Fairfax Media duopoly that controls 90% of Australia’s metro press — together with favourable government media policies have protected the industry from the closures and job losses experienced in Britain, USA and Canada.

But, in fact, as Associate Professor Sally Young and former Fairfax editor Max Suich have noted, the story of Australian print newspaper decline is a nuanced one. The recent US industry contraction is similar to what Australia experienced 20 years ago.

Due to media law reforms, Australian media takeovers in the late 1980s saw Australia lose all of its daily evening newspapers. This reduction in mastheads caused irreversible falls in newspaper penetration. Perhaps it was the lack of newspaper choice, or the loss of a favourite masthead, but whichever the case, many readers abandoned the newspaper buying habit. Rodney Tiffen has found that newspaper penetration fell by almost 50% between 1980 and 2007. Australia’s overall print circulation decline was more dramatic than in most other advanced democracies because despite population growth, newspaper penetration fell sharply.

Interestingly, worldwide the number of mastheads has risen as developing nations such as India and parts of Asia, Africa and the Middle East embrace print newspapers as literacy increases.

The question for Australia remains: what do falling circulation figures mean for attracting advertising, which has historically provided the lion’s share of revenue to underwrite its journalism? The digital space of mastheads has attracted some new advertising revenue, but certainly not enough to restore newspapers to their zenith in the 1980s.

Mastheads have experimented with ways to get readers to pay online, through pay walls and tablet and mobile apps. So far digital sales remain modest. The Age reported its digital sales as just over 9300 for each of its issues. News Limited is yet to report digital sales, which is not a mandatory requirement until July 1, 2013. The Australian Financial Review has altered the pricing of its pay wall; but it has lost more than 30,000 hard copy readers since March 2008.

There are a few general points to make here. First, online advertising sells for a lower rate than the golden days of print advertising when media companies monopolised the advertising market and could charge accordingly.

Second, studies have shown that internet users do not spend the majority of time online looking at news websites. Non-news websites are successfully competing with news websites for advertisers, further driving down the pricing.

Third, during the GFC companies accelerated their shift out of Australian print advertising. According to one print analyst, “not only are circulation and readership numbers down, but the value of each of the readers has also dropped in the eyes of the advertisers.” This means that many companies now prefer loyalty programs and direct email marketing campaigns to personalise advertising messages rather than using newspapers.

Predictably, falls in advertising revenues have led to falls in other measures of performance such as share price and overall operating revenues. What is less clear is the consequence for “quality” journalism.

The digital mediascape has changed the media cycle and favours breaking news, brevity and speed over depth and sometimes accuracy. It has also seen a proliferation in low-cost opinion and commentary pieces. But, it does not automatically mean that quality journalism will suffer. US author and commentator Philip Meyer says the economic pressures have led some newspapers to rethink their core journalistic values.

Meyer says print newspapers can remain viable with smaller audience share as long as they retain trust and influence. He says giving readers evidenced-based journalism, largely outside the domain of bloggers, allows quality newspapers to maintain community trust and to demand political accountability.

Meyer says investigative journalism is at the core of evidence-based journalism, but to afford its associated costs, newspapers should aim for “quality” readers who seek the truth as a defence against political and advertising spin. He advises newspapers to jettison resources used for frivolous news items, which in the current information-rich environment, fail to add value to a brand.

Interestingly, Fairfax Media seems to be in an internal tussle. Some of its management, such as the CEO of Fairfax’s Metropolitan Media division, Jack Matthews, favour high traffic to the websites through popular, downmarket stories, an approach known as tabloidisation or “newszak”. This is why the online versions of once serious broadsheet newspapers promote stories about pop starlets with paparazzi-style photographs.

A scan of the top five most popular stories of the day, which appears at the bottom of most newspaper sites shows celebrity gossip, sex stories, or both. They serve as “click-bait”. The other approach, favoured by some senior Fairfax editors, is to push quality journalism. A win for these editors can be seen in the bolstering of Fairfax Media’s combined investigative journalism unit with more staff and resources.

Another option seen across the globe for delivering quality journalism is cross-media collaborations. Wikileaks did not gain traction until it collaborated with established newspapers. Mastheads like the New York Times have also partnered with online newsrooms such as ProPublica to pursue investigative journalism.

The decline of print circulation is predictable, but not so the future of quality journalism. Last night’s vote shows that journalists are prepared to fight for it.