Australia’s biggest newspaper bosses are engaged in an increasingly vitriolic public slanging match about the future direction of the print news business – News Corporation in stubborn defence of print while Fairfax is entertaining the possibility of moving to digital-only.
Media buyers that ProPrint spoke to were equally divided although not so vitriolic over the future of printed newspapers, following the manager of the world’s biggest agency John Steedman coming out on print’s side.
The stoush between the two newspaper giants began at the recent Mumbrella360 conference when News Corp co-chairman Lachlan Murdoch made a thinly-veiled jibe at Fairfax’s strategy, saying “we have been supporting the industry and talking it up, which it deserves, but some of our competitors were… actively talking it down in their own products, and that’s just crazy.”
“That’s a lack of leadership which is frankly irresponsible and it’s got to stop.”
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The remarks were in response to comments by Fairfax chief executive Greg Hywood at the International News Media Association World Congress last May. There he stated that, “We know that at some time in the future, we will be predominantly digital or digital-only in our metropolitan markets,” he said.
“We can’t say whether it’s three, five or 10 years. That depends upon print revenue trajectories, but it will happen.”
Just a few days after Murdoch’s volley Hywood returned fire with the nastiest language so far, blasting News Corp’s claim as ‘so ridiculous it is barely worth taking the effort to deny it’, but then proceeding to do just that.
“Why would Fairfax walk away from print? Over 75 per cent of our revenues are print based,” he wrote in an email to staff.
“News Corp publications and senior management have indulged in a series of speculative lies about Fairfax Media.
“They claim we are walking away from print. They claim we are talking down print, not defending it. They claim, even more strangely, it is our fault print advertising revenues in Australia are falling."
In his emai Hywood says: “News’ mad ranting and ravings of late are just their standard tactics of bludgeoning anyone who dares to have a different voice – indeed dares to challenge their view and place in the world.”
Hywood also accused News Corp of being ‘in denial’ about structural decline in print and insisted there will be a ‘sustainable role’ for printed publications, despite Fairfax’s flagship metro printing plants closing less than two weeks ago amid falling print circulations.
News Corp hit back yesterday through The Australian’s media pages, lashing Hywood’s digital-first strategy and accusing him of ‘cutting the guts out of the business’ by selling off assets and cutting staff.
“The problem is Hywood has belatedly realised that the all-or-nothing digital future he is heading towards with reckless abandon does not yet deliver meaningful advertising dollars and perhaps never will,” media writer Darren Davidson wrote.
Media editor Sharri Markson then revealed Fairfax board members had tried to remove chairman Roger Corbett last year over concerns about the direction of the business, but did not have the numbers to oust him.
The nation’s media buyers seem divided over which company has got it right and which strategy is more likely to bear fruit in the long run.
[Related: Newspapers in flux]
Group M media agency boss John Steedman said in March that he is actively encouraging his clients to take a fresh look at newspapers and magazines, arguing print remains a strong avenue for advertising.
He said advertisers have been moving away from print faster than readership, and while circulation figures are falling the negativity around print has been overcooked.
Print, he said, remains a targeted, high impact medium – especially for brands in the financial services and retail spaces.
Steedman blames the ‘digital hype’, as well as a lack of unity among publishers in backing the power of their medium.
However, Starcom chief executive Chris Nolan says the most effective business model in the future will be online and that both companies will need to continue developing their digital offerings.
“Online has better audience engagement and better accountability so it’s a more effective medium for advertisers and will continue improve as it matures,” he says.
Nolan says he expects the frequency and size of newspaper issues will reduce in the relatively near future and that printed issues should be retooled for deeper analysis while letting online editions handle daily news.
However, he says News Corp is on the right track talking up the power of print.
“Being positive about print is good for business and it’s important to focus on the role it still plays,” he says.
“Print and digital need to complement each other to provide the best offering for audiences, and Fairfax executives have told me they see the two mediums working together.
“The question is of evolving the digital business model into something that can support the news business, and there’s still a lot of work to do to build that.”
TMS group business director David Lodge says the question is not so much which strategy is better but which is better for each business.
“News and Fairfax are very different companies, News has more to gain from print because they are more active in print-friendly markets while Fairfax has used online’s lower barriers to entry to expand to new markets,” he says.
He says the two companies need to work together to promote print as a medium while at the same time expanding their digital offerings.
“They need to give consumers instant gratification value-adds they can only get from print, like giveaways and so on, and ingrain print into everyday life, motivating consumers to buy it,” he says.
“Mastheads need to be more than just the printed product, the consumer has to be engaged no matter what the medium.
“Both companies are doing this but they need to do it harder.”
Lodge says both players need to work together to promote print, and the news business in general, instead of slugging it out.
“It is good to see Murdoch putting his money where his mouth is in defending print. It’s still one of the fastest ways to create mass reach for advertisers,” he says.
“They might be flighting in public, but executives from both companies have told me they need each other to stay healthy.
“I think we are yet to find the natural running rate for newspapers in the changing market and I think that eventually it will stabilise – we have seen smaller circulation losses recently than several years ago.
“It’s hard to imagine a world completely without newspapers.”
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