Journalism isn’t like any other business. And that’s because journalism isn’t a business at all. The great newspaper empires now being dismantled in Australia and elsewhere were actually advertising businesses supporting cultural institutions.
Industrial era journalism was a craft subsidised by the advertising. When advertising separated from the newspapers, the journalism lost its subsidy. Now, companies like Fairfax Media are seeking to put a market value on journalism itself. Good luck with that.
In her new book, ‘Fairfax: The Rise and Fall’, Colleen Ryan – a former editor of the Australian Financial Review – seeks to assemble (from obviously high level sources) the definitive account of Australia’s oldest and most venerable media company.
The story traces the company from its beginnings in the 1840s in the then convict settlement of Sydney as a family-run publisher under John Fairfax; to its glory days in the mid-20th century under the founder’s great grandson Sir Warwick; to the disastrous privatisation bid by Warwick Junior in the late 80s; to the years of mauling by merchant bankers and junk bond owners, and finally to, its long, slow demise in the digital era.
This is Ryan’s second book on Fairfax. Her earlier work (‘Corporate Criminals: The Taking of Fairfax’), was co-written with another former AFR editor Glenn Burge. That title focused on the fiendishly complex Tourang bid for Fairfax in the early 1990s, which involved a virtual Sopranos cast of Packers, Kennedys, Blacks, Turnbulls and other big swinging dicks of the era.
For this book, Ryan uses as a framing device the 2012 raid on a dying Fairfax by iron ore billionaire Gina Rinehart who is seeking to turn the once proudly independent mastheads into mouthpieces for her fringe political views. In the Rinehart raid, the author sees an echo of the vainglorious tilt at the publisher a quarter century before by young Warwick, another spoilt and indulged scion who felt cheated out of his inheritance and wanted to prove something to a dead father.
The most compelling chapter is the final one, on the ongoing bid by current Fairfax CEO Greg Hywood to build something new out of the ashes of the terminal print businesses. This is a company whose share price has fallen from above $6 to as low as 38c in late 2012. As a comparison, online employment company Seek, a start-up which then Fairfax CEO Fred Hilmer could have snapped up for a song more than a decade ago, now has a market cap two and a half times that of Fairfax.
In the meantime, the lifeblood of the institution – if not the business – has been the journalism. Ryan writes of the flood of tears that ensued last year when the company axed 20 per cent of its staff, including some of the most respected and experienced names in journalism.
“Despite having cut loose one in every five journalists at Fairfax, Hywood maintains that journalism is the future of the company,” Ryan writes. “It is now the business, whereas in the past, the real business was the classifieds – jobs, homes and cars. Journalism may have dominated the culture, but the company made its money from the classifieds.”
And there’s the rub. As Fairfax moves this month to the New York Times-inspired ‘freemium’ model (in which readers only to start to pay a subscription once they pass a certain amount of free stories each month), the big question is what sort of journalism this more meagre income can sustain. More critically for the company’s survival, how much longer will institutional shareholders, having lost so much money on Fairfax, give Hywood to turn the now much smaller ship around?
On that score, Ryan writes of a frank assessment of Fairfax’s prospects by the South African-born fund manager Simon Marais, one of the company’s biggest investors.
“As far as Marais is concerned, a listed company is a business that operates for shareholders, not for anyone else. He sympathises with the notion that an independent quality press is important for democracy, for government accountability, but concludes that the Australian public simply refuses to pay for it. Marais has worked out that it would cost less than three cups of coffee a year per head for the entire Australian population to ensure the viability of Fairfax. But he says no-one will do it, and that is not his problem. He doesn’t think it’s the Fairfax’s board’s problem either.”
Perhaps Marais is right. Perhaps, the days of large, publicly listed media corporations that subsidise journalism under the umbrella of advertising are over. Look at News Corporation. It just split itself into two, essentially telling founder Rupert Murdoch that his legacy, loss-making, publishing assets will have to make their own way in the world from now on.
My feeling is if enough of us are concerned about the maintenance of quality, investigative, accountability-style journalism, we would be better off digging into our pockets, sacrificing those three cups of coffee and directly subsidising a non-commercial enterprise that fosters this important work in the interests of democracy.
If the legacy media is dead, perhaps it’s time we built a new one.
‘Fairfax: The Rise and Fall’, Colleen Ryan, Melbourne University Publishing, 2013
See also: Eric Beecher: ‘The Death of Fairfax and the End of Newspapers’ – The Monthly
15 Comments
Anonymous · July 3, 2013 at 2:16 PM
it doesn't have the cachet of The SMH or the Age so The West Australian slips under the radar despite some Walkley Award success in recent years. WAN shares were once worth $15, now as seven west media they are under two bucks and the paper is facing a major structural change with the first of about 30 journalists who have volunteered for redundancy to leave this week, many of them veteran subeditors. this week The West has run a series of articles about suspect links between prison officers and bikies and a disruptive group within the upper echelon of the Corrections department. The paper has also exposed some dodgy decisions by the State government. There are no doubt quite a few people only to happy to see the editorial budget being slashed.
Notus · July 3, 2013 at 11:12 PM
After reading “The Stalking of Julia Gillard” three cups of coffee would be overvaluing their services.
Ian · July 4, 2013 at 1:51 AM
Your closing lines echo Jonathan Holmes on Media Watch this week. Dorothy did an excellent take down of that episode in loon pond.
But Holmes said any media should be supported; suggesting we should fork out for stuff behind paywalls. Is that what you're saying here? Or should your exhortation be assumed directed only at alternative outlets?
I really can't see myself consistently supporting any online news sites financially – their quality is not consistent enough for me to commit for any length of time (I never subscribed to a newspaper for the same reason). I can go buy a Fairfax paper one day, a Murdoch one the next. But I can't easily flick my subscription from one website to another.
Mr D · July 4, 2013 at 1:59 AM
Ian, I think Jonathan Holmes and others, like Greg Hywood, are exercising wishful thinking that old-school media can be sustained with a paywall model and virtually no advertising.
It's more likely in my view that legacy media will splinter and target niche audiences, who are more likely to pay to have their own views reflected back at them.
Personally, I subscribe to Crikey and am happy to do so. I wouldn't fork out my own money for the AFR, might pay for the individual articles on the SMH/Age and would require someone to pay ME to read the Murdoch press.
Everyone will have a different view, of course, but in no way do I subscribe to the Holmes' mistaken affection for the dying legacy outlets.
Anonymous · July 4, 2013 at 3:13 AM
If we look back at how journalism has been practiced in Australia then I do not feel like I owe any of the parasites a living they have misled the population on so many important issues they leave us not able to take any of them seriously.
Go back in history where was the truth of the conflict for the Korean War.Why did Australia invade and support the Vietnam war.
Why did we not see investigative journalism for the invasion of Iraq.
How could a journalist from the Murdoch press have access to secret material in a endeavour to bring down a political adversary. Journalism have forfeited its right to be classified as profession.
DavidR · July 4, 2013 at 6:54 AM
We already dig into our pockets to support the ABC and the SBS – and I have no problem doing that.
These vested interests of the “news” will howl and shout while they die about not being able to compete with such non-commercially-orientated business models. My fear is that funding for these two great Australian assets will be pulled and the news business will continue to founder.
And to ensure their livelihood, and to cement them as supreme rent seekers, who do you think will be convinced to dig into their pockets to support the necessary check on political power of the fourth estate?
Mr D · July 4, 2013 at 7:05 AM
My issue with the ABC is that because it is taxpayer funded through government, it becomes defacto politicised. The consequence is it ends up overcompensating for 'balance' and is cowed by the conservative forces in particular. I think there are clear signs of the ABC passively enforcing no-go areas in news coverage. Witness its gutlessness over the Ashby story. And that's why I favour, a direct user subsidy.
Rolly Christian · July 4, 2013 at 8:46 AM
Interesting Mr D,
I find the current ABC 'balance' confused – much like the ALP – with the exception that it will continue running its baseline left progressive agenda.
The ABC will flog ALP for not being left enough and give the LNP grief now and again, but the Greens, the party the media most aligns themselves with ideologically is their darling to “keep the #$%^@##% honest” with the democrats gone.
When have you seen the ABC giving the Green's a shellacking? I can't recall any – its a green free ride at your ABC. It's so easy being green.
Anonymous · July 4, 2013 at 8:33 PM
Goodness can't let the above comment go by. What a lot of nonsense. I worked for the ABC for a long time and saw a great institution and service dismantled in the Howard era. It is a right wing, stupid, very stupid organisation now. Fearful and doing a lot of damage.
Dan · July 4, 2013 at 9:36 PM
Mr D, I don't think Holmes was necessarily endorsing the “dying legacy outlets”.
What he said was: “start subscribing to at least one media website: whether it’s the Herald Sun or New Matilda, Crikey or the Sydney Morning Herald, old media or new, pay just a little to keep real journalism alive.
I read that as him saying he doesn't really care how it's done, but quality journalism must be supported.
Mr D · July 4, 2013 at 11:18 PM
Agreed, Dan. He did mention the other outlets. However, I think his definition of 'journalism' is a little antiquated.
Anonymous · July 5, 2013 at 1:59 AM
I agree wholeheartedly with Anonymous, dated 5/7/13, of 6:33am. After returning to Australia, from a 20 year absence working in Asia I find the presentation of current affairs has become asinine.
Perhaps my perception has changed, after exposure to a few other societies, but last nights Q & A from Indonesia only showed the level of debate here in Australia for what it is, shallow, simplistic and febrile.
I do think that this lack of quality is brought about by a failure of comparison and competition between Australia and another. It is all too parochial, too much of a club, too small,(and that speaks for Australian industry as a whole).
Rolly Christian · July 5, 2013 at 4:01 AM
Please let me elaborate my view further to avoid confusion.
Fiscally both the ALP and LNP are in the right-wing “free market” is god camp. The ABC or anybody else in the MSM appears powerless to make a case for protection against the adverse impacts of globalisation on Australia. Instead US credit rating companies TELL our governments we need to sell more public assets – to improve our position – selling the farm as it were? We are just being sold-out down the river (for profit).
Socially what “right wing” conservative views has the ABC been vocal on promoting? None.
What side does the ABC take when sourcing stories about SSM, abortion, the sex industry or problems with multiculturalism. Your ABC self-censors or gives voice to one side. The baseline left progressive agenda rolls out time and time again. And happens to align with the Green party well.
VoterBentleigh · July 7, 2013 at 7:29 AM
It is not the role of any media organization and especially the ABC to promote specific religious views. If one wants to get religious views the best place to go is is a place of worship. The role of the MSM is to inform, not to promote any views, whether left, right or in between. Sexual issues between consenting adults are viewed by Western, secularly governed societies as issues which are largely private matters unless they breach the basic laws of that society. The ABC has only covered them in relation to the politics being played out by politicians and religious leaders wanting to impose their religious views upon other people who do not hold them and in relation to the laws which are being formulated to protect people's rights against religions and other organizations discriminating against people of whose sexual activities they disapprove. The ABC is thereby not promoting specific sexual practices, etc. It is letting the citizenship understand the issues being debated in the political and social sphere by presenting sides of the argument which generally do not get a voice in MSM, which is more than certain sections of the commercial media do.
Nor is it the role of the ABC or the MSM to “make a case for protection” of Australia against the adverse impacts of anything. If you want to be involved in that, join a political party, a business association, a lobby group, a union, a community group, etc.
Rolly Christian · July 8, 2013 at 6:06 AM
Cont'd from above,
I understand the traditional role of a good media service is to raise matters that are in the public’s national interest for fair debate (not biased one-sided left social agenda setting). (Media obsessions with polls, ratings, sex, leadership speculations and SSM are hardly vital national interest material). Australian media should be interested in what things promote healthier and sustainable prosperous lives here – the big issues that concern us all with coverage “weighted” to suit “real importance”. Open discussion about the adverse affects of globalisation and corporate monopolies on Australian trade and our economy have been of interest and reported on in the media since before Federation. Now far less is openly discussed in any detail because all the heads that talk are tied to the ship. Our elected leaders are either sold or TOLD what to do (or else) and our media owner(s) are those who directly benefit from global corporate monopolies (& their similarly positioned advertising clientele). It’s a complete stitch-up – welcome to …The failed estate.
To the ABC’s credit it does run stories against corporate greed, immoral globalisation and national monopolies but it has yet to make any vital inroads into wider domestic political debate- showing a viable way forward. I fear our populace is too sexed-up and dumped-down by current unbalanced MSM content to think clearly or harder about the more difficult issues we face with an importing, outsourced contracting local economy.
The rest of Australian MSM would appear silent or firmly in the IPA “free market is god” right-wing camp along with ALP & LNP. Ironically the ABC applying rational pressure to Green Party’s policies for viable national economic & environmental sustainability would produce better reasoned outcomes for wider public debate.
Imagine the MSM doing its job well for a change.