Newspapers lose readers and revenue

17 Mar 2013
Description

Some time back in the 1990s, I wrote an article that began: “The newspaper you are holding in your hands is an endangered species.”

 

The risk to newspapers that worried me then had to do with media freedom. That remains a matter of concern to journalists – probably always will be – but it has been replaced by a far more urgent threat.

 

Dismal financial results reportedly recently by the two big newspaper groups, APN News and Media and Fairfax Media, confirmed what had long been obvious: that the newspaper industry is reeling from the impact of the internet.

 

Unlike APN, which announced a whopping loss, Fairfax at least managed to declare a profit. But it looked anaemic once the one-off proceeds from the company’s sale of its remaining 51 per cent in Trade Me were excluded.

 

Both companies are struggling with high debt and declining revenue. Like newspaper publishers worldwide, they are dealing with a crisis of a magnitude never before encountered and sometimes give the impression of having no clue what to do next.

 

To compound its misfortunes, APN has experienced a schism in the boardroom, resulting in the abrupt departure of several directors.

 

So it’s not a good time to be in the newspaper business. The industry is bleeding and morale could hardly be described as buoyant.

 

I have spent my working life in the print media and it saddens me to see the industry in disarray, but I console myself that I was privileged to experience what was, in hindsight, the golden era of New Zealand newspapers.

 

From the 1970s till the early 2000s, the industry was mostly prosperous. It suffered the inevitable cyclical ups and downs of a capitalist economy, and several afternoon dailies died as television ate into evening reading habits. But overall, newspaper readership was steady and revenue from advertising was such that the Australians coined a term for it: rivers of gold.

 

Papers were comparatively well-resourced, although of course we employees never thought so, and they were generally well-managed – the more so after the many small family-owned provincial titles were acquired by the two companies that then dominated the industry, INL and Wilson and Horton.

 

It was also a period of robust journalism, when editors and reporters were prepared to take risks and to hold the powerful accountable – something that couldn’t be said of the generally timid New Zealand press of the 1950s and 60s.

 

So what went wrong? By my reckoning, several things.

 

Crucially, the classified advertising that once provided newspapers with much of their income migrated to the internet, which is why Fairfax made the smart decision in 2006 to acquire Trade Me. That at least meant the company regained part of the revenue stream it had lost, but as of last December that river of gold is no longer flowing. Fairfax sold its Trade Me holding because it needed the money to reduce its debt burden.

 

Another profoundly significant change was that INL and Wilson and Horton both fell into Australian hands. Fairfax took over INL – owner of the Dominion Post, The Press, the Sunday Star-Times and a stable of provincial papers – and APN acquired the old Auckland family firm of Wilson and Horton, which had the formidable New Zealand Herald as the jewel in its crown. These ownership changes had consequences.

 

If there’s one word that characterises Australian attitudes to New Zealand, it’s indifference, and I suspect that apart from wanting to run their businesses at a profit, the Sydney-based boards of directors that control the New Zealand newspaper industry are largely indifferent to what happens here.

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Photo Credit: Zarko Drincic via Compfight cc

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2013
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