Businesses, and business models, don’t last forever. Gregory Hywood, CEO of Fairfax Media, said the time of print is quickly declining, and digital viewership is growing. Hywood said the industry is scrambling to adapt to digital from print. Fairfax is responding by changing -- not tweaking -- its business model by simplifying organization and using audience data and insights and closing some of their production plants, he said. Hywood said Fairfax has reduced its print circulation because there is no correlation between circulation numbers and advertising revenue. Defining a profitable newspaper is more complicated than simply closing the doors. While Hywood couldn’t pinpoint exactly when print circulation will end, he said the time is quickly coming.
“We’re all changing our business models as fast and as furiously as we can,” - Gregory Hywood
“Media consumption continues to shift and fragment, and the advertisers follow” - Gregory Hywood
“We believe that newspaper profitability can’t exist solely on a stand-alone days of the week basis,” - Gregory Hywood
- The future will be predominantly digital.
- No correlation between circulation and advertising revenue.
- If you reduce printing, you have to reduce costs.
- Defining whether or not a publication is profitable can be complicated.
Gregory Hywood, CEO of Fairfax Media, gives a speech about print, frequency, and the emerging multi-media dynamic at the 2013 INMA World Congress.
Gregory Hywood has been chief executive officer and managing director at Fairfax Media Limited since February 7, 2011. Mr. Hywood served as the chief executive officer of Fairfax Radio Syndication Pty Limited. Mr. Hywood served as the Interim Chief Executive Officer of Fairfax Media from December 6, 2010 to February 7, 2011. He served as publisher and editor-in-chief of The Age at Fairfax Media. A Walkley award winning journalist, he held a number of senior management positions at Fairfax including Publisher and Editor in Chief of each of The Australian Financial Review, The Sydney Morning Herald/Sun Herald and The Age. He also served as Group Publisher Fairfax magazines. He was Executive Director Policy and Cabinet in the Victorian Premiers Department between 2004 and 2006 and since 2006 has been Chief Executive of Tourism Victoria. Mr. Hywood has been an Independent Non-Executive Director of Fairfax Media Ltd. since October 4, 2010. He serves as a Director of the Tourism and Transport Forum, The Heart Foundation and The Victorian Major Events Company. He served as a non-independent non-executive director at Trade ME Group Ltd. since October 18, 2011 until December 21, 2012. He serves as a Member of University Council at Deakin University.
As the multi-media revolution continues to thrive in a digitally disrupted world, the traditional newspaper business model is heading out the door, according to Gregory Hywood, CEO of Fairfax Media.
This requires a fast and furious transition from a print model to one that incorporates media across multiple platforms.
“We are absolutely on a journey from print to digital,” he said. “We know that some part of the future will be predominantly digital.”
Hywood discussed how Fairfax looks to reconfigure its news model at Sydney Morning Herald and The Age, “restructuring so when the time comes, we’ll be ready.”
Continuous shifting and fragmentation of media consumption are changing the news market, which means companies must look to develop creative production.
“The restructure is driving innovation,” Hywood said.
Because the news industry is heading toward a multi-media-focused future, Hywood recognises that Fairfax must respond by radically changing its business model.
As advertising print revenues decline and digital viewership continues to increase over short- and long-term, news industries must implement a new model that embraces digitalisation and represents their readership.
With an audience of more than 9 million, 70% of whom access Fairfax’s publications by digital means, the company looks to hone in on serving this digital audience.
“Today we are more connected to our audiences as ever, and our audiences are as big as ever,” Hywood said.
Recently announcing a “Fairfax of the future,” the company has implemented newsrooms that focus on digital-first production. The new structure streamlines revenue generation.
Hywood presented three concepts companies must consider if they aim to generate revenue by making the shift toward digital:
- Understand what costs are required to run a newsroom.
- Think about the benefit of a newspaper and its relevance to an online audience.
- Consider broader network effects.
These concepts lead to a reduction in cost. And while profitability is the goal, Hywood notes that defining whether or not a publication is profitable can be complicated.
Like all print news organisations, Fairfax’s core focus has been a commitment to profitable newspapers. According to Hywood, the revenue must come from understanding the industry’s changing dynamic and acting on it.
“We believe that newspaper profitability can’t exist solely on a stand-alone days of the week basis.”