Fairfax Media is starting to prepare for the time when print newspapers are no longer viable, laying out their plans to become an entirely digital company.
Chief executive at Fairfax Media Greg Hywood spoke to shareholders last month to discuss the future of the company and he made one thing very clear - the focus will be on digital.
We've asked the question - What should the Sydney Morning Herald and The Age be in the 21st Century? The answer is this. They are mastheads rather than newspapers. Their future will be predominantly digital rather than print. And we will manage the business accordingly.
The company hopes that by planning early and allowing for the shift from print to digital, it will be able to maximise cashflow and negotiate its way through "this perfect storm of cyclical weakness and structural change".
To do this, Fairfax needs to create a profitable digital-only model, and Hywood believes this is almost within reach: Currently the Sydney Morning Herald and The Age apps have been downloaded to almost 900,000 tablet devices and are being read by some 96,000 people each day and, last year, the company reported an annual growth in digital revenue of 20%, which is a positive indication that Fairfax is moving in the right direction.
Other changes at play will be the closing down of both the Sydney and Melbourne printing plants, which are deemed "no longer essential to [the] 21st century future" and the redevelopment of the printed Sydney Morning Herald and The Age newspapers to make them more compact and user friendly.
Fairfax will also be focusing on gaining digital subscriptions and building strong positions in online advertising to offset the pressures of print revenue.
While digital strategy may have been the main focus of the speech, Hyland did take time to emphasise that as long as cashflow can be generated from a print business, Fairfax will continue to produce newspapers.
It could be in three years, or five or 10 or 15 years - when print publications in our Metropolitan businesses could become unprofitable and we move to a digital only model. We are taking the necessary steps now and will in the future take further action if required.
In a nutshell, we are remaking Fairfax Media into a genuine 21st century multi-platform media company with a firm eye on a prosperous future.
[Image credit: mohamedn]
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