The Pascometer burns red on Fairfax

The venerable liberal publishing house of the Australian media is doomed it seems. The Pascometer has endorsed its restructuring:

There’s a sidebar lesson here about the difference between invention and innovation that we’ll let pass to concentrate on the silos, because it’s the silos that Fairfax has (belatedly) moved to break down.

The Melbourne vs Sydney Fairfax split is legendary, a stubborn tribal unwillingness to make the most of available resources. The “not invented here” syndrome has been rampant.

The online vs print silos were in many cases worse. There were some good souls reaching out on both sides, but also appalling insularity with cases of “print” journalists being ordered not to file for the online side of the business.

As an outsider, a mere contributing editor, it has been a relief not to have been part of the internal politics. Observing the dysfunction has been bad enough. However, knowing a little about it is enough to rejoice in the core of the change this week that has been overshadowed by the painful headlines of job losses and leadership change: it’s all about smashing the silos.

Fairfax has the content, it has the journalists, it has the brand, it has the distribution, it has the design and IT knowledge, the aps, it has the readers, or unique browsers as they might be called.

Sadly, however, it has nobody diagnosing its real problem.

What the Pascometer does not mention is this: rationalising editorial for Sydney and Melbourne would make perfect sense if Sydney were in Melbourne or vice versa. They’re not of course, nor are the two towns remotely similar. There is no need to go into the differences. But they are there and Melbourne’s famous parochial spirit demands a local rag.

That’s not to say there isn’t excess fat in maintaining two operations but rationalising editorial costs across the two big capitals is just another way of cutting costs on production that is part and parcel with a death spiral. Especially since the future is fragmentation, not centralisation.

The great irony is that as a million and one media debutante’s waste endless column inches on Fairfax’s editorial ‘problem’, the real issue goes ignored. It’s advertising, stupid. The traditional newspaper derives 85% of its revenue from ads. They don’t have enough of it, will have less tomorrow and haven’t innovated to get more since the invention of the printing press.

Nothing is being done about that.

David Llewellyn-Smith
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Comments

  1. Stormy Waters

    I think all the journos truly believe that the fourth estate was being provided by the private sector as a charity rather than as eyeball bait to milk the monopoly over classifieds and job/car/property ads.

    I can’t think of any business model that would support even content aggregation, little own investigative journalism, via print media on a city/state/small country basis.

    Only a matter of time until the same story applies to free/pay TV and radio.

    • Perhaps free TV but not paid, at least for a long time to come. As you point out, costs a lot of money to make content and pay TV has it.

      Free to air looks more vulnerable in the long term to new platforms but it doesn’t have the same fundamental issue as print and online journlism. TV ads still work.

    • Stormy Waters

      Really?

      Pay TV content is basically movies, TV shows and, the big one, sport. Pay TV’s ability to exact revenue on the first two is already in major trouble from iStore/hulu/out right piracy. Sport can’t be far off.

      Google just demo’d their video enabled glasses today, albeit at a developer level. What happens in ten years time when every spectator at a sporting event has HD cameras on their face and there are cloud based services that aggregate/mesh all those feeds to give a live 3D broadcast of every sporting match/concert/political speech/flashmob/etc?

      Not that I think it’s a bad thing. New technologies have always decimated established mono/oligopolies.

      • Stormy Waters

        Event organisers have. Apple are looking to setup hardware to foil iPhone cameras at concerts and events.

        http://bits.blogs.nytimes.com/2011/06/03/apple-patents-way-to-prevent-concert-piracy/

        And the Olympics are flat out draconian. The IOC sends cease and desist orders to people who post photos of the Olympics on Flickr.

        You’d think the example of the music industry’s efforts to block digital via software and legal methods would inspire them to be a little more innovative.

        If bodies like the IOC and FIFA were smart about it, they could team up with google to get hardware & software in place that would enable them to charge their own spectators to record their own product for them and cut out the sports media. Deliver an experience/product that precludes piracy rather than trying to block piracy. They could then take fatter profits on the redistribution directly.

        • The Olympics is becoming a disgrace, it is no longer the worlds games, but something for corporates to try and squeeze money out of. Of all the things the Olympics should be under some open-content model.

      • drsmithyMEMBER

        Google just demo’d their video enabled glasses today, albeit at a developer level. What happens in ten years time when every spectator at a sporting event has HD cameras on their face and there are cloud based services that aggregate/mesh all those feeds to give a live 3D broadcast of every sporting match/concert/political speech/flashmob/etc?

        The owner of the venue – in cahoots with the copyright cartels – makes it illegal to broadcast the event without a license.

  2. I was hoping they will rationalize Pascoemeter out through the door and into the mines, suitably attired in a hi-vis jacket and hard hat.

    Since he is the foremost proponent of the “structural adjustments” thesis and the need for labour to “adjust”, I am sure he will practice what he preaches.

    Or will he turn into a NIMBY when the cuts are made too close to the bone?

    • I would kill to see the Pascometer and Gittins! in high visibility jackets and hard hats. Sadly though, I’m sure they’ll find work spruiking for Big Dirt at the Rinehart-controlled Sydney Mining Herald.

      • Lorax, there is just too much hand-wringing over the Rinehart/Fairfax Fairhart fiasco – Gina is yet to get a seat on the board, only holds around 20% of stock so is unlikely to have substantial impact on editorial lines. Good grief, if her interest in the Ten Network could only inspire 30 minutes of Andrew Bolt, I dare say there is not much to worry about.

        The whole shebang is far more telling of the propensities of the Left.

        • In late breaking news – it has just been revealed that Andrew Bolt has been placed as Editor in Chief of the Fairfax Organisation – the former ALP staffer, Bolt said that he would re-write the ‘Charter of Independence’ and get a Mr. Finkelstein on the board to oversea the newsworthy integrity of the journalistic independence. Gina Rhinehart has sold all her shares on the announcement.

        • Exactly it is hand-wringing, by trendies who don’t even buy the paper anymore, could it be more perverse. Theres a free iPad app for that.

    • Does not matter what Gina does, the Fairfax brand is doomed – simple economics – Packer wanted the ‘rivers of gold’ when he was alive (H&H mentioned the key issue is the advertising revenue), but the reality, well before Gina, is that those rivers have just about dried up and regardless of any perceived or real leftist ideology slant & control direction, if the the punters are not buying the papers, then it cannot be an ongoing concern. The Fairfax Print media will be gone in 3 years and the whole online Fairfax company will be extinct within 5 years and Gina would have made a loss! I don’t think she would care though!

  3. Re your concerns Sydney needing Sydney content, Melbourne, Melbourne content – not really an issue. A recent article in The Conversation stated that 90% of all Fairfax content was AAP syndicated. I’m sure if we divvie up the remaining 10%, split 50/50, there is still room for 5% local content respectively.

      • Must be that the 80% of the 5% is ideologically/editorially driven. Plus I remember when it was a publication to be reckoned with. All that and a small touch of rhetorical flourish!

  4. “The traditional newspaper derives 85% of its revenue from ads”

    And 90% of that 85% in the Sydders Morning Herald is spruiking housing.

    How healthy is that revenue stream looking for the next decade?