Newspapers ‘down under’ : Influential forever?

As changes relentlessly play out in the print and digital world of ‘legacy media’ year-by-year, there is no shortage of vantage points to take for witnessing the disruption.

Close to home for a New Zealander, one of the best vantage points since 2013 has been the Walkley Foundation’s Storyology conference – about to have its third outing in Sydney this November.

In New Zealand itself the best vantage point has more often than not been media companies themselves, openly reporting on their own trials and tribulations and that of their rivals – some weeks on a blow-by-blow basis as announcements are rolled out about paywall experiments, integrated newsrooms, management reshuffles and staff redundancies.

Front and centre: Fairfax and APN News & Media

Out of the newspaper corner, the scene in New Zealand – as with some other strategic industries, most notably the banking industry – is largely an adjunct to Australian ownership structures.

On the one hand Fairfax Media presents itself as a leading multi-platform media company reaching 10.6 million Australians and 2.9 million New Zealanders. As promoted on its corporate website the jewels in its portfolio include the Sydney Morning Herald (“Australia’s most read masthead across print, web and mobile/ tablet”) and  Stuff.co.nz (“New Zealand’s No.1 news destination reaching more than 1.84m in May 2015”).

Next to Fairfax is APN News & Media and its “diverse portfolio of vibrant media assets”. In 2014 it made a localised branding ploy for its New Zealand subsidiary, with the advent of New Zealand Media and Entertainment (abbreviated NZME and stylized as NZME.) Its audience claims as at September 2015 are that every month NZME’s brands reach over 3.1 million New Zealanders, with news content reaching 2.2 million, and sport and entertainment content reaching 1 million and 2.7 million respectively.

It’s a crowded playing field; both Fairfax and NZME have their own vulnerabilities as do other competing media companies, especially the noisy Mediaworks – currently owned by Los Angeles based Oaktree Capital Management.

Media spotting: Insights on the future

If there’s one organisation that provides a ring-side vantage point for an insider slice of the news publishing industry that would be TheNewspaperWorks.

Established originally to “communicate the value of newspaper readership to advertisers and agencies” it now encompasses the responsibilities of the Newspaper Publishers’ Association / Pacific Area Newspaper Publishers’ Association, Publishers National Environment Bureau, and Publishers Advertising Advisory Bureau.

Directors of TheNewspaperWorks are Fairfax Media, APN News & Media, News Corp Australia and Seven West Media; with other publishers and industry partners holding associate memberships.

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TheNewspaperWorks consistently adheres to the word influence, with a core part of its activity using the line ‘Influential By Nature‘ and the declaratory statement that “Influence is an inherent characteristic of newspaper media”.

Earlier this month, on 10-11 September, the theme continued when The Newspaper Works put on the 2015 Future Forum: Influencing A Connected World in Sydney.

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As above, headline speakers included: WPP founder and chief executive Sr Martin Sorrell; NewsCorp’s senior strategy VP Raju Narisetti; the Huffington Post’s VP of brand strategy & sales, Lauri Baker; Google’s director of strategic partnerships Jason Washing; and Jane Hastings, CEO of NZME.

The event’s programme carried an introduction by TheNewspaperWorks chief executive Mark Hollands that hit the nail on the head:

Like it or not, we carry the burden of being old school and the innovation already accomplished is generally poorly recognised.

In Hollands’ words the influence of the “brands and journalism” of the key players has never been greater.

There was an admission, of sorts, that the purpose of their transformation “from newspapers to multimedia news brand companies” has needed more clarity of a kind that is being brought to bear by emerging trends.

As Hollands noted it’s not as if the structural change confronting the industry is new, and nor is the urgent necessity of efforts to find “new commercial models to sustain (its) future”. Part of that necessity, as he also noted, is about better communicating what the industry’s strategy is, and better communicating “product changes” that are already in place as related to “their emphasis on future services”.

New Zealand digital media researcher Alex Clark – who I have been providing a sounding board for over the last year – has been undertaking a research and development project focused on improving the way that journalism is funded online, and was a fly-on-the-wall guest at this year’s 2015 Future Forum.

He has kindly shared some of his preliminary notes from the event below. For more information on Alex’s News, Renewed project, see fundingnews.co.nz (in progress), you can contact him directly at contactalexclark@gmail.com


Alex Clark: A selection of notes from the 2015 Future Forum

Media leaders at TheNewspaperWorks Future Forum were forthright about the challenges facing the newspaper industry. Of particular concern was the ongoing process of transforming legacy print operations into sustainable digital-first media platforms:

“The business models we have don’t support the cost basis of the businesses we inherited.”
– Greg Hywood, CEO of Fairfax Media

“There are questions about business models […] How you transfer print revenue across to the digital world is a great challenge.”
-Julian Clarke, CEO of News Corp Australia

“As we all know, all too well, our commercial proposition is being challenged.”
– Michael Miller, CEO of Newspaper Works

“The pressure obviously, both on print and TV, is going to grow. There’s no doubt about that.”
– Brett McCarthy, Editor of The West Australian

“It’s not the journalism that’s broken, it’s the business model.”
– Mark Baker, Group Managing Editor of Fairfax Media Tasmania

“To me, this is the Original Sin that we committed […] We thought that we’d give away our product, we’ll grow our audience, and we’ll grow our revenue. The reality is that we’ve given away our product online […] but we haven’t been able to grow [sufficient] revenue.”
– Raju Narisetti, Senior Vice President of Strategy, News Corp

“We know that newsrooms are hollowing out […] Increasingly people are coming in at the bottom, young journalists, who are asked to do a lot of work to produce a lot of articles.”
– Professor David Wesibrot, Chair of the Australian Press Council

It wasn’t just traditional media players expressing concerns about monetisation in a digital environment, but major technology companies too:

“We’re all in a constant exercise to understand what type of advertising models will work [on mobile], and that’s an open ended question that we’re all still trying to get to the bottom of. I don’t see that changing in the foreseeable future.”
– Jason Washing, Director of Strategic Partnerships at Google.

>> A continued reliance on print

For many legacy media companies, it was clear that the majority of revenue is still coming from print operations:

“In our case, print is still the dominant part of our revenue stream.”
– Julian Clarke, CEO of News Corp Australia

“Most of our revenue is still coming from the print product.”
Mark Baker, Group Managing Editor of Fairfax Media Tasmania

“Twenty years into the Internet, the Wall Street Journal and the New York Times still have 60-70% of their revenue coming from print. Most major publishers still have about 80% of revenue coming from print.”
– Raju Narisetti, Senior Vice President of Strategy, News Corp

For some, an over-reliance on print revenue was seen as an ongoing concern. For Narisetti it was seen as a sign that there is still a future for print:

“Print really isn’t going away, and we’ve got to really own that belief […] So we have to evolve past this question about how long print is going to last, and ask what does it mean that print is going to be around for the foreseeable future.”

Narisetti further elaborated upon the reasons for his firm belief about the persistence of print into the digital age:

“Our print audience is, in some ways, a captive audience. There is loyalty, obviously […] there is habit […] and the reality is there’s a lot of inertia […] Especially in the US, it’s very hard to switch out of your newspaper because [usually] there’s no other choice.”

The strong inertia within print led Narisetti to strongly advocate that newspaper companies should cut costs within their print edition, so that they can focus greater resources on their digital platforms:

“I think we have to start again asking questions about what it is that we can stop doing in print, what is it that we can reduce, what is it that we can outsource […] If it impacts the quality of the product a little bit, I think that’s OK […] We have to bring our costs down as an industry.”

Underlying this advice, was Narisetti’s belief that print audiences will be more forgiving than digital audiences about the quality of the product:

“If you produce a ‘B-plus’ newspaper, I think you’ll be OK with your readership. But if you produce anything less than an ‘A-minus’ or an ‘A-plus’ web or digital product, you have a problem.”

>> The threat of internet giants 

Throughout the conference, there were detailed discussions about whether large technology companies such as Facebook, Apple, and Google should be seen as friends, foes, or both;

“Google, Facebook and Apple […] they’re all frenemies.”
David Murphy, Editor of Mobile Marketing Magazine

Underlying most speakers’ concerns, was the disruptive impact that Internet giants are having on the comparatively small-scale operations of news organisations:

“Disruption is the business that Google and Facebook are in […] We have to get used to it.”
– Sir Martin Sorrell, Founder and CEO of WPP

“We can’t fight them on audience, because whatever we do we’re not going to have a billion people come to our platforms every day.”
– Raju Narisetti, Senior Vice President of Strategy, News Corp

Of particular concern, was the ongoing transformation of major Internet companies into media powerhouses with increasing dominance over the distribution of journalism:

“Now they’re going after content. Facebook Instant Articles, Apple News, Google […] they’re really going after the things that we usually sell against.”
– Raju Narisetti, Senior Vice President of Strategy, News Corp

“Google is not a technology company, it is a media owner, and the same thing applies to Facebook […] These are media owners.”
– Sir Martin Sorrell, Founder and CEO of WPP

“Apple News […] should be terrifying if you’re making money from online publishing.”
– David Murphy, Editor of Mobile Marketing Magazine

“Now we’re facing the problem where Facebook wants to host [news articles] themselves, and places like the New York Times have done that, with other places expected to follow […] There’s a bit of a risk there for those media organisations.”
– Mark Baker, Group Managing Editor of Fairfax Media Tasmania

An audience member questioned the CEO panel about how the industry should respond to this threat, asking:

“Should we be strategically targeting Google and Facebook in order to take revenue away from them?”

In response, Michael Miller answered:

“They’re all targeting us […] We need to stop playing defence and more the attack.”

Later in the afternoon, Google’s Jason Washing attempted to address these concerns by emphasising his belief that the relationship should not be seen as adversarial:

“News is something inside Google that is very near and dear to us as a culture. Everything that we strive to do is about enabling consumers and readers to access the highest quality content that’s available.”

“We’re committed to working with all partners across the ecosystem, and making the ecosystem bigger […] I think we’re all in the business of wanting to have the pie grow, and that’s going to take a lot of collaboration across every channel.”

>> Media restructuring, reform and consolidation

Several speakers advocated strongly for substantial transformations across the media industry. In regards to ownership structure, Sir Martin Sorrell believed that news organisations should be expanding their portfolios by acquiring print, television and radio properties:

“Media owners [should be] looking at media ownership in the fullest possible way […] [Within] traditional print, there has to be more restructuring, reform and consolidation.”
– Sir Martin Sorrell, Founder and CEO of WPP

Furthermore, Sorrell believed that multimedia news companies should be striving towards internal consolidation across their ownership portfolio:

“It’s very dangerous to separate print from television, radio or all the other media, so I look at it as one.”

“What I think media owners have to do […] is to look at it not as traditional or legacy print, but as online, and for journalists to be prepared to exhibit their talents and their journalism across everything.”

“In other words, you have one editorial platform and the journalism from that platform permeates anything and everything. The days of separation are gone.”

In addition to discussions about consolidation, several industry executives expressed a strong desire to put aside rivalries, and strive for higher levels of collaboration across the media industry:

“I think that the industry is taking up the point about working together […] But we’ve actually got to get together and sort it out.”
– Greg Hywood, CEO of Fairfax Media

“We need to be easier to deal with as an industry […] We should be saying that we will work together.”
– Michael Miller, Chairman of TheNewspaperWorks

“Outside the boardroom we fight and we scrap […] and we punch each other up. What I’ve really found about the Australian radio industry is that when the boardroom doors are closed, the agendas are set aside […] I think that is critical […] Working together, we’ve got to start doing that across the industry.”
– Ciaran Davis, CEO of APN

“Traditional legacy media see competitors as the rival newspaper […] that just isn’t the case anymore.”
– Mark Baker, Group Managing Editor of Fairfax Media Tasmania

 >> Integrated newsrooms: The transformation of NZME. 

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During the Champions of Change session, NZME CEO Jane Hastings explained how she had led the transformation of NZME into an integrated media business.

First, Hastings described the process of consolidating print, radio and digital brands across NZME, culminating in the upcoming creation a single merged newsroom:

“From November […] we’re merging all of the Auckland teams in around news […] We’ve brought together our radio news-people and our publishing news-people.”

At the core of this new structure, is a movement away from multiple newsrooms aligned with specific news brands, and instead having a single newsroom with integrated teams focused on specific content areas. As Hastings explains:

“It’s all about content […] Our content hubs are news, sport, entertainment, business and lifestyle, and we’ve got new leaders for those areas.”

For each breaking story, newsroom teams will be encouraged to consider all opportunities within each medium:

“Is that a story that needs to be expressed in print? How is it going to be amplified online? Actually, is there an event idea around here? What’s our social strategy? Is there a native [advertising] opportunity across this?”

In addition to editorial leaders for each content hub, there will be channel editors who are responsible for each of the mediums that NZME deploys to distribute its content:

“We’ve got channel editors that do mobile, video, digital, radio and publishing […] they’re focused on audiences […] I think the next stage we’re moving to is an audience-first newsroom.”

The integrated newsroom will also have a new daily routine centred around the rhythms of each media channel:

“The heartbeat of the newsroom that we’re moving to is 7 minutes, 30 minutes, 24 hours: 7 minutes for digital, 30 minutes for radio and 24 hours for the paper the next day.”

In addition to editorial restructuring, NZME has undergone a significant reorganisation of its sales team:

“[Within the sales team] they have a specialist radio person, publishing person, digital person, and experiential person.”

 “[Salespeople] have the opportunity to introduce each other’s clients through packaging, and then we have integrated direct teams when we find an integrated opportunity.”

 “A united incentive to one overall revenue target is critical.”

The new team structure is in stark contrast to NZME prior to integration:

“There was nothing in common with these businesses […] We had different systems […] different incentive schemes, but the key difference is that the teams were competitors.”

The process of consolidation, however, has not been without issues:

“I would say that we’ve got 50% on board and 50% who are not on board. We’re really clear where we’re heading […] and if they don’t want to sign up there’s a big shiny bus outside that’s heading in a different direction and we wish them all the best.”

To assist with the process of transformation, Hastings has developed teams across the organisation to help manage the process:

“I’m a big believer that change must be driven and led from the top, but you can’t come up with all the solutions. So we have formed teams in different divisions who are helping us to define where we’re going and what we need to do.”

Furthermore, Hastings has specifically trained managers on how to transition a workforce during periods of change:

“We’ve done quite a bit of training across our managers on the stages of change […] understanding and identifying how to manage people at different points along that journey.”

Following Hastings’ presentation, Brett McCarthy and Howard Gretton discussed the process of merging the television newsroom of Perth’s Seven News with the print newsroom of The West Australian:

“We eventually will end up hiring young people into our newsroom who have the ability to do every bit of the work across any platform. That’s the long-term reality of it.”
– Brett McCarthy, Editor of The West Australian

“The integration between the newsroom […] the digital cooperation between editorial, advertising, marketing and technology, you know, they’re bouncing off each other quite well.”
– Chris Wharton, CEO of Seven West Media

However, as with the experience of NZME, it appears that the transition has not moved forward without internal resistance:

“Not everybody on our floor is a massive enthusiast about it. Lots of people are, but there are pockets of resistance if I’m to be honest.”
– Howard Gretton, Editor of Seven News, Perth

Despite resistance, the inertia of the project has kept it moving forward:

“We just can’t let that bog us down, we’ve just got to keep on going. We’re on a conveyor belt heading somewhere. We’ve just got to keep reinventing ourselves every day”

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