Marketing Division

The news revolution

Words by Katie Hyder

The industrial revolution brought wonders and advancements to humanity. But for those living through it, there were also casualties. Alongside the child labourers and the poor – who were forced to work long hours in unspeakable conditions – there were the highly-skilled craft workers and the agricultural labourers who suddenly found themselves struggling to compete with new technology. Sound familiar?

It has been an interesting year for Australia’s newspaper industry. Announcements in June of major restructures and redundancies by Fairfax and News Limited, a bid by mining magnate Gina Rinehart to gain seats on the Fairfax Board of Directors, and a government proposal to introduce a public interest test for media ownership all made headlines. All this, while traditional newspaper subscriptions and advertising revenue plummet as readers and advertisers look to new technology.

When newspapers in the United States began closing in 2009, The New York Times Company Chairman, Publisher and CEO Arthur Sulzberger described the climate in newspapers as ‘the perfect storm’. He was referring to the shift in reader and advertising habits fostered by the emergence of new technology and the fall-out from the global financial crisis.

Deakin University Associate Professor in Journalism Martin Hirst says newspapers across the world face two crises. One is a crisis of public trust, borne out of issues like the London phone-hacking scandal, a lack of media scrutiny over weapons of mass destruction claims during the Gulf War, and a parade of bloggers calling out journalists on biased and, at times, inaccurate reporting. The second is a crisis of the dominant business model; put simply, readers are not buying newspapers like they used to and advertisers are turning to other mediums.

But at the heart of these crises is a dilemma that has always been part of the mainstream media industry within a capitalist society.

‘We expect so much from the media – we expect our news, we expect to be entertained and we’d like to think, particularly in terms of news and journalism, that there is public interest involved,’ explains Dr Hirst.

‘But, by the same token, most of the media is privately owned and, by law, the board of directors of a publicly listed company is required to grow the value of the company on behalf of shareholders.

‘How do you reconcile the public interest involved with the ethics of news, with the private interest of having to maximise return to shareholders?’
Within this model, when income decreases, cost-cutting and productivity enhancements are inevitable. One such measure is the idea of increased ‘content sharing’ where media syndicate content across multiple brands. But what does this mean for journalists and for the quality of journalism? Dr Hirst predicts news publishers will have fewer journalists ‘in-house’ and will rely more on a smaller number of ‘news curators’ buying in content, from freelancers, news agencies, established ‘brand journalists’ and perhaps even citizen journalists. This is already part of the reality.

The other change flagged is the introduction of paywalls, whereby readers pay a subscription fee to access all or part of a site. But, he says, readers have become accustomed to paying little – if anything – for online content.

‘The mainstream news industry made a mistake, because they thought, if we put content online for free, people will like our content and therefore they’ll come and buy the newspaper.

‘Instead, people liked the free content online and then said “I don’t need to buy the newspaper” – so that kind of backfired on them.’

With many now introducing or planning to introduce paywalls, the tide is turning. But paywalls alone are not going to fund the industry. For one thing, the ticket price is still comparatively low. But the other problem is the price that advertisers have become accustomed to for online space, says Dr Hirst.

‘No matter how many eyeballs you have online, advertising is still cheaper than in the print edition.

‘So even though you might be lifting your eyeball rate or click rate online, you’re not able to generate as much advertising revenue because of that price differential.’

Where paywalls will make a difference is where they allow news publishers to gather information about readers and better target the sale of advertising space to select demographics.

‘The reason why paywalls are going to work in favour of the news media is not so much because I’m paying $8 a week to get access to this exclusive content in The Australian, it’s because in order to get that I hand over all my details, they’ve got a cookie that measures how many times a week I log on, and so they’ve got all that data on me as a consumer. That’s what they need in order to bump the advertising price. If they can then turn around and say to their key advertisers “we’ve got 300 000 unique subscribers, they’re all AB, and you need that audience”, then they can start to crank the price up a little bit.’

For the time being, publishers are still selling advertising space at a cheaper rate in their online editions but Dr Hirst predicts this will change and, as it does, so too will the nature of printed newspapers.

‘Next year, when The Age and The Sydney Morning Herald go to compact, I expect they will go to three days a week at the same time,’ he says.

He argues that in order to survive, newspapers will need to become more like news magazines, with the more timely articles and breaking news to be published in the online editions, while investigative reporting and feature articles will become the mainstay of less frequent print editions.

But despite the rapid changes that we have seen, and are likely to continue seeing, Dr Hirst says like any revolution, things are likely to be messy for some time.

‘This is something that’s going to take a long time. We’re probably about 35 years into the digital revolution now. You compare that to the industrial revolution that took 100 years. We’ve probably got at least another 20 if not 50 years or more for this to play out.’

Find out more about Deakin’s School of Communication and Creative Arts

 

Associate Professor Martin Hirst
Associate Professor Martin Hirst
School of Communication and Creative Arts
martin.hirst@deakin.edu.au

 

Deakin University acknowledges the traditional land owners of present campus sites.

30th October 2012