Fairfax Media's chief executive says the newspaper industry has spent too long agonising about its future and needs to get on with its new round-the-clock model of breaking stories and selling ads for print, online and on different devices.
FAIRFAX Media's chief executive, Greg Hywood, says the newspaper industry has spent too long agonising about its future and needs to get on with its new round-the-clock model of breaking stories and selling ads for print, online and on different devices.
Addressing a conference of the Pacific Area Newspaper Publishers Association in Sydney yesterday, he said Fairfax and APN News & Media were the two stocks on the Australian sharemarket subject to the largest amount of ''shorting'' - where hedge funds bet the share price will fall - but those bets were wrong.
''My message to the US hedge funds is beware, you are wrong,'' he said.
Shares in Fairfax, owner of The Age, have fallen from about $1.40 at the start of the year to as low as 69.2? this month, but have recovered some ground this week.
They closed at 81? yesterday, but Mr Hywood believes the company is undervalued.
''What the market is judging the future of our industry to be is wrong,'' he said. ''It is more than just wrong, it's complete nonsense.''
The death of many US newspapers did not foretell the death of Australian operations, because, unlike their American counterparts, Fairfax and News Ltd had captured market-leading positions in online news.
More people than ever saw Fairfax material, Mr Hywood said, when those who visit its websites, use its mobile apps and read its newspapers were combined - 20 per cent more than the ''halcyon days'' of the 1970s and 1980s.
He said the greatest correlation to newspaper companies' revenue was not drifting circulation - which peaked in absolute numbers in the 1970s - but the broader economic measure of domestic demand.
The ability of companies such as Fairfax and News Ltd to command readers' attention throughout the day using print, smart phones on the way to work, online at work, video during lunch, smartphones on the way home and tablets after work meant the industry had a ''compelling proposition'', one the industry needed to do more to sell. Mr Hywood paid a compliment to his competitor, Rupert Murdoch's News Ltd.
''The best thing we have going for us is News Ltd.
''This is world's-best-practice competition. If you are competing with News, you have got to be on your toes.''
Fairfax and News are in early discussions about sharing printing and distribution and Mr Hywood said he knew the company had to ''rationalise'' both as they were too expensive.
''We have just got to get the costs out and spend the money where it matters,'' in funding journalism and selling advertisements.
Frequently Asked Questions about this Article…
What does Fairfax CEO Greg Hywood say about the future of the newspaper industry?
Greg Hywood says the industry has spent too long agonising about its future and needs to embrace a round‑the‑clock model of breaking stories and selling ads across print, online and multiple devices.
Are Fairfax and APN News & Media being heavily shorted on the Australian sharemarket?
According to the article, Fairfax and APN News & Media were the two stocks on the Australian sharemarket subject to the largest amount of 'shorting'—hedge funds betting the share price will fall—though Fairfax's CEO said those bets were wrong.
What has happened to Fairfax shares this year and does the CEO believe they are undervalued?
The article reports Fairfax shares fell from about $1.40 at the start of the year to as low as 69.2 (this month), then recovered some ground and closed at 81 yesterday; Mr Hywood said he believes the company is undervalued.
How big is Fairfax's combined audience across print, websites and mobile apps?
Fairfax says more people than ever see its material when website visitors, mobile app users and newspaper readers are combined—about 20% more than the 'halcyon days' of the 1970s and 1980s, according to the article.
What does the article say drives newspaper company revenue: circulation or the economy?
The article says the greatest correlation to newspaper companies' revenue is the broader economic measure of domestic demand, not drifting circulation (which peaked in absolute numbers in the 1970s).
How are Fairfax and News Ltd competing — and could they cooperate on costs?
Mr Hywood called competing with News Ltd 'world's‑best‑practice' competition that keeps Fairfax on its toes, and the article notes Fairfax and News are in early discussions about sharing printing and distribution to rationalise expensive costs.
What is Fairfax's strategy for capturing readers' attention across the day and selling more advertising?
Fairfax aims to command readers' attention throughout the day—print, smartphones on commutes, online at work, video at lunch and tablets after work—creating a 'compelling proposition' the industry needs to better monetise by selling ads across platforms.
What cost and investment priorities did Fairfax highlight for the business?
Hywood said the company needs to 'rationalise' expensive areas such as printing and distribution, get costs out and reallocate spending to where it matters most: funding journalism and selling advertisements.
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