Gina Rinehart can’t fix Fairfax – and it might be too late for management too: Kohler

It’s hard to know which of the two cracking Fairfax stories to concentrate on: The efforts of the management and board to modernise the business and belatedly join its customers in the digital world, or the absurd, uncomprehending pursuit of the company by Gina Rinehart for its influence.

It seems pretty clear these two things are not related: Rinehart has become Carelessly Rich and in a position to do something about the anti-mining flavour (as she sees it) of the Australian media at the same time as Fairfax has finally got around to doing something serious about the decline of print publishing.

Australia’s strangest rich person is apparently oblivious to the challenges facing publishers and is interested only in moulding public opinion. Meanwhile the last thing on the minds of Fairfax directors is the influence their editors and journalists might possess.

In other words, the company’s board and its now largest shareholder are at cross-purposes, which is a pretty rum state of affairs. Gina Rinehart has absolutely nothing to contribute to the transformation of the company into a profitable digital publisher and is not interested in it anyway, and no one inside the business is the slightest bit interested in moulding public opinion – they are just trying to survive.

How that ends up is anyone’s guess, but it’s perfectly clear what chairman Roger Corbett needs to do: tell her that to control the company she needs to pay for it, but she’d better get a wriggle on. Doing a Kerry Stokes and creeping 3 per cent every six months might give her control of a smoking ruin in four years time. If she wants to appoint the editors of newspapers that sell enough copies to make any difference, she’d better launch a takeover offer now.

Enough of the weird delusions of Gina Rinehart; the business of publishing is far more interesting.

Up until yesterday, Fairfax’s plan was to try to grow digital revenues while milking the newspapers for cash. To people with no knowledge of publishing sitting around a beautiful timber board table this would have seemed not only sensible but perfectly possible – an absolute cinch in fact.

The trouble is that they are two different businesses and the same people can’t do both at the same time.

To some extent, the problem lies in the use of the word “content”. Like many businesses accustomed to monopoly rents, publishers have come to believe that what they produce is all-important and that all they need to do is push their “content” out in various ways – websites, tablets, phones and on paper.

And when presented in a PowerPoint slide, that seems to be powerful logic. “Fairfax is a content company”, says the executive standing next to the slides. “We have a peerless editorial resource and we simply need to deliver the output to customers in the form they want.”

Sounds fine, except when you come to do it. A newspaper is utterly different to an iPad app, which is different to a website on a computer.

A newspaper comes out once a day and needs to be put together differently every time.

It can no longer be used to find out what’s going on, except by a rapidly diminishing group of people who don’t really want to know what’s going on. Newspapers are an accompaniment to relaxation. It’s possible that as tablets spread, it won’t even be used for that, but to prolong the sales, it needed to move ahead of customers’ preferences, not keep trying to tell them stuff they already knew.

Websites and apps are laid out once and the material is published into that design constantly. There is no “deadline”, no “layout”, merely the words and pictures, quickly, all the time.

Also, whereas customers tended to buy one newspaper – they were either an SMH reader, or a Telegraph reader – online they can read everything all the time.

Newspaper journalists – reporters and sub-editors – have no idea how many of their customers view an individual story or look at a particular page. Website journalists and editors know exactly how many look at each page and read each story, and how long they read it for and what they do next.

For these reasons and more the combination of print and digital publishing simply does not work. They are completely different products with different uses, and the construction and operation of them require totally different ways of thinking.

It is technically possible for the people producing a newspaper to put the stories on a website as well, but that misses the point of digital publishing. The articles can’t appear once a day, and they can’t just be same length as needed to layout a nice newspaper page, and they can’t have the same headlines as those that sell a paper on a newsstand. Digital headlines have to work on Google – today’s newsstand.

In other words, the production of newspapers and websites and apps should be quarantined from each other.

Former Fairfax CEO Fred Hilmer had an inkling of what was needed when he separated Fairfax Digital from the print businesses, but he didn’t go far enough. The temptation of re-using the same “content” for both was too tempting.

What was needed, and is still needed, although it may be too late now, are totally different groups of people producing the newspapers and the websites, and for all of those products to be totally different from the newspapers of the past.

Newspapers must be reinvented to be sort of daily magazines, bought for reading rather finding things out, and that should have happened years ago. Websites need to be fast moving, constantly updated, accurate sources of information and analysis.

So where does “quality journalism” fit? Well, it all needs to be good. Journalism is a service; it needs to serve its customers.

Follow @AlanKohler on Twitter.

This article first appeared on Business Spectator.


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