Fairfax Avoids Being ‘Cannibalised’ But At a Price

Fairfax Media—Australia’s leading media company, announcement on June 18 detailing drastic cuts and production changes in its metropolitan newspaper business has sparked a media frenzy—with editorial independence prevailing as a key concern.

The spotlight had already been on Fairfax, publisher of some of Australia’s most popular newspapers, in the last couple of weeks as Gina Rinehart—the world’s richest woman—increases her stakes for a board position.

The historic changes include 1900 job cuts, a shift from the traditional broadsheet to the tabloid size for The Sydney Morning Herald and The Age, and the introduction of a ‘metered’ pay wall on their web content. These changes have been in response to Fairfax’s sliding advertising revenue, and the emergence of their digital readership. The Internet has posed a large problem not just for Fairfax, but the entire media industry.

Two printing facilities, in Sydney’s Chullora and Melbourne’s Tullamarine, will also be closed.

With an expected 20 per cent of the 1900 job cuts expected to be from journalists, significant doubts have been cast over Fairfax’s potential to maintain the quality of its content.

Greg Hywood, chief executive of Fairfax, addressed the quality of their media in the Statement to the stock exchange, “Our investment in quality journalism and our editorial standards will not be compromised and will continue to underpin our success.”

To achieve this Fairfax plans engage in “Greater sharing of editorial content across geographies and across platforms.” Basically, the plan is to cut extra costs of having overlapping jobs between states, and to compensate for this by integrating editorial content. So potentially one journalist from Sydney could be producing content for other capital cities such as Brisbane, Canberra and Melbourne simultaneously.

Concerns regarding the increasing focus of media content were expressed by Paul Murphy, acting federal secretary of the Media Entertainment and Arts Alliance (MEAA).

“Any further loss of editorial positions will clearly damage these newspapers’ ability to produce quality journalism” Mr Murphy said in response to these changed.

”Readers and employees alike are entitled to know precisely how Fairfax Media … will continue to produce quality journalism when fewer journalists are left to actually go out and hunt out news stories.”

Quality will play a defining role for Fairfax’s survival as it implements a pay wall on its digital platforms. In 2013, the currently free media websites of Fairfax will change to a ‘metered’ pay system. This model will provide free access to users up to a certain point of usage, and if the consumer chooses to continue reading a payment will be required. The Australian Financial Review website (afr.com), another masthead of Fairfax, has already proved that pay walls can be profitable.

The danger of this system will be that some people will simply refuse to pay for content. Why pay when you can get similar content for free somewhere else? The accessibility and abundance of information the Internet provides will surely worry the Fairfax board. This is why quality is crucial to the future of Fairfax. If they can’t distinguish themselves from the crowd, they’ll be lost in it.

To add to the quality concerns of Fairfax media, Gina Rinehart has been knocking louder and louder on the Fairfax board’s door. Mrs. Rinehart currently holds 18.67 per cent of the company—after an $86 million splurge—and is entitled to some voice on the board. She is asking for three seats on the board, the position of deputy chairman, and to have editorial influence. But one reason she has been refused these positions is that she has not signed the Charter of Editorial Independence which states board members should not interfere with day to day editorial decisions.

The reactions have been widespread. Acting Prime Minister Wayne Swan demanded in Parliament on June 19 that Mrs. Rinehart reveal her true intentions with Fairfax. The Greens leader Chirstine Milne took it one step further, demanding that new laws were necessary to protect editorial independence. But none have been more vocal and concerned than those who will be impacted the most—the journalists.

In a letter to Mrs. Rinehart on June 7, now opened to the media, senior journalists from The Age and The Sydney Morning Herald expressed their concerns over Mrs. Rinehart’s board pursuits.

“The reports suggesting you might not support the Charter of Editorial Independence have caused considerable disquiet among staff,” reads the June 7 letter, which was signed by the house committees of the SMH, Age and the Canberra Times.

The Fairfax Charter of Editorial Independence is a list of seven fundamental points that ensure the protection of the quality, credibility and integrity of editorial content. The Charter requires that journalists must recount events “fairly, fully and regardless of any commercial, political or personal interests, including those of any proprietors, shareholders or board members.”

Throughout history, free media has provided a clear window into issues we wouldn’t know about otherwise. They are a beacon of freedom and independence. Fairfax will need to keep these historical concerns paramount if they are to adapt to the digital transformation of the media industry.

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