Pacific Media Watch

20 June 2012

AUSTRALIA: Where's the media bailout package?

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"Gina Rinehart circles ... There now seems to be little question she is seeking to control the organisation." Photo: New Matilda
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As the business model of print journalism collapses globally, it's been a terrible week for Fairfax. Will anyone answer the print media death knock, asks Ben Eltham.

ANALYSIS: SYDNEY (New Matilda / Pacific Media Watch): Newspapers have been shrinking and dying the world over, so anyone who follows the media closely will not have been shocked by Fairfax’s dramatic announcement yesterday.

Indeed, the decision is simply another step in the long march of the printed newspaper towards its eventual liquidation as a for-profit medium — as savvy foreign observers like Jack Shafer have been saying for years.

Mind you, the announcement has certainly made an impact. It marks an obvious turning point for legacy media in Australia. The scale of the job losses are eye-watering: 1900 staff, including 300 journalists and editors, nearly a quarter of Fairfax’s total.

A radical restructure of the organisation. The end of local newsrooms for the Sydney Morning Herald and The Age. The closure of two massive printing plants. A paywall for the websites. A move to tabloid format. And a move to a so-called "digital first" publishing model.

No newspapers have closed yet, but the days of print now seem to be drawing rapidly to a close. In the medium-term, the changing cost model of the industry should in the end mean that far more resources are devoted to the actual journalism, rather than the vast sums currently squandered on printing presses and delivery trucks.

But the short-term reduction in resources will hurt. After all, Fairfax has been cutting editorial staff for years. A once-mighty news media organisation is on its knees. 

And all the while, Gina Rinehart circles. Today she was reported to be seeking three seats on Fairfax’s board. There now seems to be little question she is seeking to control the organisation.

Dire economics
The dire economics of newspapers, and the many mistakes of Fairfax’s management, have been thrashed over at length in recent times. Margaret Simons wrote a long report on Fairfax’s troubles last year. Jonathan Green penned a recent update yesterday.

But looking around at international comparisons, it’s hard to say Fairfax has handled the collapsing business model of print advertising any better or worse than many other publications. 

The Guardian and the New York Times would be most people’s idea of high-quality news publications that have moved quickly to embrace the digital future. But they are losing money and shedding jobs too.

This chart, put together by Mark J. Perry using Newspaper Association of America data, explains the problem graphically. 

As you can see, advertising revenue grew strongly for decades, before falling off a cliff in the 2000s. With circulation falling almost as quickly as revenue, newspapers are closing the world over.

As a result, the structure of the news media industry is changing. Just as obviously, the structure of employment for journalists is changing with it.

Journalism will become more precarious, more casualised and less secure. There will be fewer full-time jobs and the pay will be worse. The sorts of job skills required will be different. Already, search engine optimisation is a more important skill for online publishing than old-fashioned subediting, as Alan Kohler points out today.

'Shoe-leather'
"Shoe-leather" journalism will remain fundamental, but coders, web developers and data journalists will also play an increasingly important role in the coming environment. That was the crux of my argument in my article about Fairfax’s recent strike, only a fortnight ago.

This wrenching industrial change is obviously difficult for people working in the industry. It’s never easy to see a much-loved institution eviscerated by merciless market forces. For many years, journalists and editors tried to ignore the gathering storm, essentially living in denial.

Denial didn’t save the A+R managers at the big music labels, most of whom were laid off in the 2000s as digital downloads destroyed the recorded music industry. 

Denial is not saving the publishers and editors at multinational book publishers, facing their own perfect storm of digital change. What might save Fairfax is the dawning acknowledgement that the good days are over, and are never coming back. 

Therefore, new models are required. Andrew Dodd’s piece in the Drum today is one such acknowledgement.

That’s not to say that this is all a good thing, of course. The death or diminution of Fairfax’s metro newspapers will have a serious and deleterious impact on the ability of Australian citizens to access information about the rich and powerful in our democracy. 

Right now, there is no other organisation or industry that can possibly employ all the journalists being made redundant from our newspapers. As a result, there will be fewer journalists gathering news in this country, and less scrutiny of wealth and power.

Serious thought
Serious thought now needs to be given to how to preserve the journalistic capability that the departing Fairfax workforce represents. It would be a tragedy if we lost the Nick McKenzies of Fairfax to a career in public relations or marketing.

There is, in my view, a good case for a government-funded industry adjustment package, similar to those that have been doled out to the steel and car manufacturing industries in recent times. 

Such a package could help journalists, editors and print workers retrain for new industries and new careers. It could also examine the possibilities of funding existing new media outlets to become a home for the Fairfax exodus.

Beyond structural adjustment, there is a clear and ongoing need to consider government funding of online news media in this country beyond the ABC and SBS. Many journalists are rightly suspicious of government-funded media outlets, but the opinion polls tell us that the ABC is in fact the most trusted news organisation in the country. 

The market is failing, which provides a valid justification for public support.

A modest, arms-length government funding program of perhaps $100 million a year could support a mix of new and innovative start-ups, and direct funding to support journalism in already-existing online publishers, like this one. Such support can’t and won’t replace the capacity lost in the newspapers, but it can help ease the transition and retain the best talent in the service of democratic scrutiny.

That money should not be too hard for a cash-strapped government to find. The annual budget for the ABC tops $1 billion. Most tax-payers think its money well spent. The annual budget for the Australia Council for the Arts is about $175 million; the surveys tell us that arts funding is also popular.

Revenue-neutral
A fund for public-interest journalism, administered at arms length and appropriately peer-reviewed could also be popular with voters. It could even be revenue-neutral, funded through a small levy on internet service providers, which would act like a micro-licensing fee, analogous to the license fee broadcasters currently pay.

In the meantime, online audiences looking to support journalism can always vote with their wallets. Readers will soon have the ability to digitally subscribe to Fairfax’s mastheads, just as you can of course subscribe to New Matilda

For nimble online outlets such as this one, there are huge opportunities to grow our journalistic workforce so as to improve the quality of our coverage. 

What we lack is the funding. Over to you,

New Matilda is crowd funded by its readers

Pacific Media Watch

PMC's media monitoring service

Pacific Media Watch is compiled for the Pacific Media Centre as a regional media freedom and educational resource by a network of journalists, students, stringers and commentators. (cc) Creative Commons

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