Industry not on ropes: Fairfax
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.
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.