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Fairfax Kills OFF Broadsheets and Lifts Profits

Posted: March 4th, 2013 | Author: | Filed under: Digital Media, Media, Online Media, Print Media | Tags: , , , , , , , | Comments Off on Fairfax Kills OFF Broadsheets and Lifts Profits

Fairfax Goes Tabloid, sorry COMPACT!Fairfax Media’s familiar broadsheets have been consigned to the history books, with the first tabloid editions of The Sydney Morning Herald and The Age rolling off the printing presses this morning.

In what is more of a survival strategy than a cosmetic overhaul, the larger broadsheet layout has been dumped for the weekday editions as Fairfax Media fights to hold onto readers and advertisers in a digital media world that has forced the closure of papers around the globe.

Apart from just size – which Fairfax amusingly refers to as compact rather than tabloid –  one of the biggest changes puts sport on to the back pages, with the very back page taken up by an advertisement, nice work.

Fairfax’s head of advertising strategy, Sarah Keith, says the company put in some very serious research. Brain imaging was used to track what readers really wanted during the entire redesign process, with some resounding plus’ for the new tabloid sized compact papers ::::

Fairfax Kills Broadsheet For Compact Tabloid Size Newspapers

“There was a concern that you think well maybe you’re using the left brain, the more detailed side of the brain when you read a broadsheet, but maybe with compact you’re just sort of skimming over things,” Ms Keith said. “Actually what we discovered is that the brain was in a very, very balanced state when reading the compact, which was great news. From my point of view when I’m going out to talk to advertisers I’m saying look, actually your ads are going to be more engaging in this product.”

Fairfax hasn’t dropped the page price of an advertisement in it’s new format, according to Ms Keith, smaller is better, more engaging.

Mike Smith,  former editor of Melbourne’s The Age, says the long-resisted switch is now a matter of survival, with the rivers of gold from classified advertising now a slight trickle.

“This is the most significant change to the Fairfax papers since they took ads off the front page,” Mr Smith said. “It took a world war to do that, and it’s taken a threat to their very existence to make them go tabloid.”

I realise it’s a little rantish, the back page however has got to have grown a few smiles around the Fairfax boardroom, it’s seriously impressive.

The Age/SMH Back Page aka billboard

Downhill Race

Their is barely a  newspaper or magazine in Australia that hasn’t recorded a drop in circulation over the 12 months. The Audit Bureau of Circulations figures show only two publications out of almost 120 – the Saturday West Australian had a nudge up of 1.3 per cent and Warwick’s Daily News climbed sweetly with a 4.8 per cent increase – recorded a rise in circulation during the three months to December 31, 2012 when compared with the same period in 2011.

Sunday papers remained the most popular, with News Limited’s Sydney Sunday Telegraph in number one spot with an average circulation of 599,165, although this was down 3.2 per cent on a year earlier.

Other News Corporation owned tabloids filled the remainder of the top few spots, with Melbourne’s Sunday Herald Sun at number two with 514,671 copies distributed (down 5.7 per cent), the Monday-Friday Herald-Sun at three with 450,090 copies (down 4.7 per cent), and Saturday’s Herald-Sun reporting 444,250 copies (down 5.4 per cent).

While the News stable were struggling with falling circulation across the board, Fairfax’s publications were hit by steep declines in circulation.

Sydney’s Sun Herald saw a 23 per cent slump in circulation to 313,477, with the Sunday Age off 14 per cent to 191,139.

The flagship Saturday editions of the Sydney Morning Herald and Age both saw circulation decline more than 13 per cent.

The Monday to Friday editions both fell even more steeply, with a 14.5 per cent decline.

Fairfax’s Australian Financial Review had a smaller decline in readership – 3.3 per cent on the weekend and 7.7 per cent on weekdays.

Circulation of News Limited’s flagship broadsheet, the Weekend Australian, dropped nearly 10 per cent, with the weekday edition dropping by more than 8 per cent.

The bureau is into its third quarter of recording digital sales, meaning there are no comparable figures from last year to look at the growth in online subscriptions.

However, the bureau says the Australian, which is now behind a paywall, had just under 40,000 paid digital sales.

Printed magazines fared little better than newspapers, with the two biggest weekly publications – Woman’s Day and New Idea – recording a 5.8 and 4 per cent drop in circulation respectively.

NOTE: The commentary I’ve anecdotally collected on the change in format has been in the main positive, if size does matter, it seems small is the way of the future. The majority of people saying that it’s a much more convenient format for commuting. A couple of people said they we;re pleasantly surprised that the content was still as substantial. Fairfax doesn’t release sales numbers, however, both of the supermarkets in the 3183 postcode, the convenience store and the newsagent had sold out of The Age by 4.30pm this afternoon.

Mr Smith says Fairfax’s biggest challenge is protecting the values of the old broadsheet brand, such as quality and high editorial standards.

“There are already some people who say that the Fairfax papers are tabloid papers in broadsheet clothing,” Mr Smith said. “They’ve been very careful in their marketing of these papers that are coming out to try and protect the brand and persuade and convince people that nothing is happening to the journalism, just the size.”

The former editor-in-chief of the Sydney Morning Herald, Peter Fray, who was ousted last year as part of Fairfax’s restructure, says if the tabloid switch does not work, weekday printed editions of The Age and The Sydney Morning Herald might disappear within five years.

“If you can deliver what audience want in any form and any channel, then you may have a future,” Mr Fray said. “My gut feeling is that we may not see a printed Monday to Friday [edition] in say five years. Some people say it’s much sooner than that, one to two years.”

Today’s changes are just the start. Fairfax plans on shutting it’s content behind a digital paywall later this year -though it’s also put this off several times in the near past –  the closure of printing presses in Sydney and Melbourne, The Age and the Herald will now be published at less expensive regional sites.

Fairfax Profits Climb on Back of Rationalisations

Last month, our favourite media behemoth – Fairfax, of course –  reported a huge surge in its half-year profit, however, the company says weak demand in the advertising market is still restricting its revenue.

For the six months to the end of December, Fairfax has made $386.3 million. That was up almost 300 per cent compared to its profit for the same period the year before.

Unfortunately the bulk of the profit – $AU312 million – came from discontinued operations, making much of it a one-off gain.

Excluding significant one-off gains and losses, the company’s underlying profit fell from $AU136 million to $AU83 million.

Revenue was down from $AU1.18 billion to $AU1.1 billion, cleverly though the publisher’s expenses also fell by $AU80 million as it rationalised staff and printing presses.

Fairfax says its restructure and rationalisation of it’s business contributed to its profit result, with a 10 per cent reduction in staff and a sell-off of some businesses which reduced debt from a around a billion dollars to an impressive $AU200 million.

Fairfax’s chief executive Greg Hywood says the company now has the strongest balance sheet in the industry, but there are more cost savings to be made.

“We are finding smarter ways to work that deliver us better outcomes and save us money,” Mr Hywood said. “We are taking a fresh look at territories long considered sacred cows and smashing silos that long seemed untouchable. We are pursuing additional structural initiatives and cost savings beyond those currently envisaged.”

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