Home > Media > Pay Walls – the last gasp of a failed media business-model?

Pay Walls – the last gasp of a failed media business-model?

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Humpty Dumpty and Paywall

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NZ, Wellington, 25 May – Journalists and other staff working for Fairfax media, were told last week  of a review that the company was carrying out. Management told staff that times are tough; advertising revenue was down; and that job losses had not been ruled out. Incredulous staff were told that there would have to be a reshuffle to make things work and that their would be job losses.

Staff were given no further details.

According to Radio NZ,

Acting general manager Andrew Boyle says there are potential job cuts across the entire company, from advertising to editorial.

Acknowledgment: Radio NZ – Fairfax looks at job cuts

And according to Stop Press,

He’s unable to say how many of Fairfax NZ’s roughly 1800 staff will be affected by the restructuring, as the company is still in early consultation with its business departments. However, he does expect it to be wide reaching including editorial, sales and operational roles. Pre-press (ad placing) and a contact centre run by Fairfax are also in the scope, he adds.

Acknowledgment: Stop Press –  Job cuts on the horizon for Fairfax, company looks towards paywalls

Fairfax NZ acting general manager, Andrew Boyle, was quick to make reassuring noises to his readers,

We still intend to be the largest newsroom in the country. We know competing with quality local content is vital to our future.”

Acknowledgment: NBR – More jobs at risk as Fairfax continues to restructure

Which was reinforced with his statement to Stop Press,

At the end of all this we will remain the largest newsroom in the country and we won’t compromise what we’ll do for our readers.”

Unfortunately, if past trends with the Dominion Post, Evening Post, and The Dominion are any indication, Mr Boyle’s optimism is not confirmed by past experience.

Since 1983, newspapers in  Wellington have gone through radical changes in both style; the number of titles available – and page-count.

Whilst prices have risen, the number of pages has dropped.

To illustrate;

Monday 20 May 2013

Tittle: Dominion Post

Price: $1.70

Page count: 24

Front Page Headlines (stories):

  1. “Mystery as China blocks NZ meat”
  2. “The tragic toll of asthma”

Monday 26 May 2003

Title: Dominion Post

Price: $1.00

Page count: 44

Front Page Headlines:

  1. “Millions creamed from pokies”
  2. “Only two All Black canes expected”
  3. “Woman with rifle threatens shoppers”
  4. “Hollingworth resigns for sake of office”
  5. large photo-story of father/son Tae Kwon Do contestants in national competition

Monday  24 May 1993

Title: The Dominion

Price: 60 cents

Page count: 44

Front Page Headlines:

  1. “Cyclist killed in horrific accident”
  2. “Woman dies in domestic related incident”
  3. “Referendum may not have Senate vote”
  4. “Bolger rules out Aussie marriage”
  5. “Hutt Council may scrap its school recreation programme”
  6. “EnergyDirect faces another court challenge”
  7. + 6 mini-item single-column stories
  8. + photo-story on rugby league player, Robert Piva

Title: The Evening Post

Price: 60 cents

Page count: 28 (TV  Week: 16 pages)

Front Page Headlines:

  1. “Projects blamed for Hutt debt”
  2. “Eve determined to keep going”
  3. “Waite caps off  Kiwi golf clean-up”
  4. “Million Cambodians vote for peace”
  5. + 6 mini-item single-column stories

Monday 23 May 1986

Title: The Dominion

Price: 25 cents

Page count: 20

Front Page Headlines:

  1. “Sea and air rescue of 20,000 gears up”
  2. “Grampa takes a bow”
  3. “Rock fall injures rafters”
  4. “Car batters wineshop”
  5. “Bodies found in snow”
  6. “Tear gas use defended”
  7. “Mosely ends racing career”
  8. “Tour lifts cloud for Dairy Board Chief”
  9. “Tories get jobless vote”
  10. “Wholesalers seek change in margins”
  11. “Wages action meets tough line”
  12. “Douglas expects Cabinet reversal”
  13. + 6 mini-item single-column stories
  14. + 1 mini-item story

Title: The Evening Post

Price: 25 cents

Page count: 36

Front Page Headlines:

  1. “Freeze stretched to Feb 29 – Back-dating kills allowances”
  2. “Ferries sale, planes fly – Storm battering travellers”
  3. “600 bed down on board”
  4. “Her new car met train”
  5. “Gale shuts out containership”
  6. “Edward lunches with Cabinet”
  7. “Mud, water rupture hill road fill”
  8. “The longest gale”

Generally speaking, as the price of newspapers has risen, the page count has dropped, and the number of news stories on the front page has also reduced in number. Content within newspapers has most likely also reduced.

According to one source, whilst readership levels remain fairly positive, advertising revenue has also dropped by at least 40% in the last financial year alone.

Staffing levels have also been slashed. Three years ago, about a hundred sub-editors were made redundant – a process that began in 2008, but received very little media coverage (see:  Fairfax says 100 further jobs to be cut in NZ ). Those who were kept on were reassigned to “hubs” that Fairfax set up to supply a centralised news service to service  its various metropolitan dailies.

Only Fairfax’s on-line staffing levels – those who maintain the Stuff.co.nz website – have shown an increase in numbers, as the company diverted more resources to it’s web presence.

Financially, APN’s NZ Herald is in an even  worse financial state. So much so that APN has not found any willing buyers for the ailing newspaper and remains on the market to this day.

According to Stop Press, Boyle is considering pay-walls Fairfax NZ’s online publications,

We’re investigating quite actively what paywalls might mean. There’s a lot of modeling and research work being done but I can’t tell you a definitive time line for it or what it might look like.”

Both Fairfax and APN are actively considering the pay-wall model – but are afraid to make the first move, lest  the other hold off, and readers flock to a free web-version of their competitor.

As Whakatane Beacon editor, Mark Longley pointed out,

If one major newspaper website charged and the other one remained free, well, that would be a tough call.”

Acknowledgment: TV3 News – News sites to adopt pay wall

An additional problem is that there are plenty of other on-line sources of free msm news; Radio NZ, Radiolive, NewstalkZB, TV3, TVNZ, etc. On-line readers may simply desert Fairfax and APN to where free material can be accessed.

There are already three pay-to-view publications in New Zealand; the Listener, Whakatane Beacon, and the Ashburton Guardian.

On TV3 News, Ashburton Guardian editor, Coen Lammers said,

If you want to know about Ashburton you have got to come to us, people have no choice really. If they value our journalism they’ll pay for it.”

Acknowledgment: IBID

That may work well in a town or small city, but in larger cities people have recourse to alternative sources of news. In fact, this blogger questions whether a pay-wall will turn around the fortunes of these large media chains when the problem is not with the readership – but with the content of their publications.

As the numbers above show (with one exception), the page count has dropped dramatically since 1983. It’s not possible to offer a similar service to readers even as page numbers drop – and advertising clients still have their advertisements crammed into fewer remaining pages.

Something has to give, and it has unfortunately been the quality of news presented.

To give an example; in the mid 1990s, the Evening Post alone assigned two reporters  to covering Wellington City Council issues. A third reporter was assigned part time. The Dominion most likely also had their own reporters covering Council issues.

This blogger has learned that the Dominion Post – an amalgamation of the former Evening Post and The Dominion – has assigned just one reporter to cover Council business.

How is that geared toward improving coverage of City Council issues?

Another case in point;  “fluff pieces” dominating  the front page does not help to present a serious, credible image of a newspaper;

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dominion-post-21-may-2013-front-page

Acknowledgment; Dominion Post, 21 May 2013

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Whilst burying serious news stories – of a nature that may  will have incalculable consequences for the future of our country – somewhere in the back pages, does not scream Serious Media;

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dominion-post-21-may-2013-business-page

Acknowledgment; Dominion Post, 21 May 2013

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Putting  Fairfax’s Stuff  (a god-awful name, by the way) website behind a pay-wall simply presents the same reduced news service, with a price-tag attached. This is not a clever business model. Especially when the “consumer” has free alternatives to choose from.

If Fairfax (and APN) are finding that revenue from advertising is falling, perhaps it is appropriate for management to re-visit their business strategy. Their model may be wrong when they treat print advertising separate from their online service.

Perhaps if Fairfax and APN proprietors treated both print and online media as a combined service, their clients may think more favourably about using it. Shoe retailers are masters at presenting a good deal for shoppers.

The last thirty years have shown that reducing the quality of media publications has proven disastrous in terms of  building readership and a strong advertising base. Trying to ‘sting’ readers for using an on-line service harks back to the old  “cost-plus” business mentality. That didn’t work out well either.

If Fairfax and APN want to grow their revenue then they need to get a lot more clever than simply putting their hands out and expecting readers to ‘cough up’. They will be mightily disappointed.

There is good reason why this blogger ceased buying newspapers ten years ago. I have a reasonably good memory that harks back to fine journalists like Lidia Zatorski who use to cover the Wellington City Council brief. If the mayor so much as sneezed – Ms Zatorski and her colleagues knew about it.

The Dominion Post is a pale shadow of it’s predecessors. My current short-term subscription of the Dompost confirms to me that nothing much has changed for the better (and said subscription will shortly be cancelled). Quite simply, the Dompost is hardly worth the paper it’s written on.

As a customer, this is how I see it.

And really, isn’t the customer always right?

Good luck on the pay-wall.

I’ll be on the other side.

This blogpost was first published on The Daily Blog on 27 May 2013.

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Source Acknowledgments

Various individuals

References

National Business Review:  Fairfax says 100 further jobs to be cut in NZ (26 Aug 2008)

Stop Press: Sky TV profits up, APN suffers losses, and Fairfax not doing so well (22 Feb 2013)

Stop Press:  Job cuts on the horizon for Fairfax, company looks towards paywalls (21 May 2013)

Radio NZ: Fairfax looks at job cuts (21 May 2013)

National Business Review: More jobs at risk as Fairfax continues to restructure (22 May 2013)

TV3 News: News sites to adopt pay wall (24 May 2013)

NZ Herald: Maori TV payout and the year of the paywall (24 May 2013)

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  1. 22 June 2013 at 8:33 am

    Fairfax just did job losses in regional Australian newspapers sending the jobs to cheaper positions in New Zealand and now they can’t afford the NZ jobs.

    And in Australia is it the Fairfax papers who advertisers now have to call phone operators in Manila as they’ve outsourced that too? (and it’s pissing advertisers off as they now have to spell words ad infinitum to get their advertisements right)

    But it’s not all bad .The Sydney Morning Herald and the Melbourne Age are going to paywalls just as the Guardian sets up an Australian edition and the Guardian isn’t subject to right wing bias like Fairfax is and will be more so under Australian coal baron influence.

    There’ll be lots more job losses and reductions in quality to come, until they really are about as a high quality newspaper as a PakN’Save flyer is. But by then no one will care.

  2. 22 June 2013 at 11:23 am

    There’ll be lots more job losses and reductions in quality to come, until they really are about as a high quality newspaper as a PakN’Save flyer is. But by then no one will care.

    About sums it up, Matt…

  3. K
    22 June 2013 at 1:39 pm

    Stuff should be making Fairfax a small fortune in advertising revenue alone. I am not paying for something I’ve received for free for years. Not paying. No way. Never. I’d rather not know what is going on or I’ll just watch the 6 o’clock news as I already paid for my “free”view set top box.

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