In with the Fairfax half year results announcement yesterday was news that the company is continuing to cut costs and pursue digital over print.
Fairfax of the Future recognises that many parts of our business were built at a time when the newspaper was king and print classified advertising was the biggest driver of our business success. Large parts of our current operating model are still geared to supporting the old business model.
ABC Online reports that Fairfax will reduce distribution of newspapers to regional and remote communities:
And regional and remote communities are set to lose access to Fairfax newspapers under the plan.
“How and where we distribute newspapers has a great impact on our costs. It does not make sense to lose money by delivering small numbers of printed newspapers to remote locations,” Mr Hywood said.
Check out the Fairfax take at the Brisbane Times on this story about itself, especially this…
The parallel pressure, however, is to manage the transition to digital in way that also reconfigures operating costs and sunk capital.
While newsagents are waiting for News and Fairfax to tell them what to do next, they should actually be making moves of their own. Okay, some are, but not enough. The future of newsagency distribution and retail business is up to newsagents alone. No supplier will provide your business plan for you, not any more.
A question being asked among some in the newspaper publishing game is which capital city daily will be the first to go digital only? The follow up question is when? Yesterday’s announcement by Fairfax plays to the reality of the impact of tablets and other devices for accessing news and information content and monetisation opportunities which publishers are more and more successfully leveraging.
Newsagents need to read and understand these moves in the context of marketplace demands. Fairfax is making the right decisions for its business. Yes, some customers and newsagents will suffer. Watch this space as there is more of this to come from all newspaper publishers.
I don’t see any bad news here, just opportunities.
Thanks for the report and links Mark.
Do you know if a copy of the Fairfax three year plan “Fairfax of the future” is publically available?
I’ve always wondered why Fairfax have continued to print all copies of the SMH/AFR in Sydney.Why can’t they send an electronic copy to their regional printing centres for printing and distribution? eg Tamworth prints for N and NW NSW, Dubbo for Central, Wagga for Southern, Port Macquarie for the north coast etc etc? Or is that too much of a radical idea?
PM,
If SMH converts to a tabloid format like the telegraph, Tamworth could print it now. Unfortunately they can’t print broadsheet.
How about it Fairfax ???? I would fully support it now.
Thanks Max, that’s a shame.Seems silly that they have so much print capacity that could be better utilised.
We’d always wondered the same thing about the Melb. Herald Sun – our version of the Telegraph is printed on the Gold Coast, so I don’t see why the Melbourne equivalent isn’t either. Lord knows the 5-cent-piece-mexicans would rejoice instead of giving us jip.
Thanks James. I can;t find a copy of the document.
No worries it is probably still an internal document.
I would have thought a model as shown by the PM would have been posible for Fairfax with their Printing Presses spread across the Country. One would assume with computerised presses it would be possible to print all Faitfax orders for one drop as a print run then despatching the truck when full with other drops on the truck run. I now already see Tabloid and Broadsheet come off the one printing press then delivered to my Newsagency on two seperate Distribution routes.
Doing this I believe could give sgnificant savings in Distribution.
Peter,
I would not know one printing press from another. My info from someone working at the Tamworth press is that their press can not do broadsheet which is a shame.
If it could, Fairfax could send a computer file to Tamworth and set the press in motion.
Option 2 could be to do the SMH as a tabloid for the country.
Another idea from out of the ballpark – since Fairfax has looked at the NEWS press at Chullora, why doesn’t NEWS send a computer file to say Tamworth and get the telegraph printed at Tamworth.
Max,
like you I do not know one end of a printing press from another. Canberra produces both Tabloid and Broadsheet. I also suspect he SMH may well become a Tabloid.
As you said about sending newpapers over the wire to printing plants would allow decentralisation and possible large reductions in transport costs. That is if it is cheaper to print papers like this. However the breadth of choice is there for Fairfax and News if they played as well. In the end it is a dollar issue and Fairfax will have to decide that what ever model they choose and the same for News. Will they wok together? Not unless their is large savings for both. Though they do share transport routes at present with Fairfax.
IPS as Fairfax though has from what I have seen piggy backed onto the SMH delivery out of Sydney (other states I do not know though suspect it is similar) ie make use of Transport Operations already in place. This does suggest Farfax saw some positivies in Transport rouye out of the major capitals.
I am surprised that they have’nt stopped
supplying already. The drop in sales in the
past 18 months has been in the order of 40% in my area. I don’t think it is just a
matter of transport costs but falling readership across the board along with
the corollary of falling advertising. I think that looking at Hywood’s comment “delivering small numbers of printed newspapers to remote locations” that the words “small numbers” are what tells the story. Print the SMH anywhere and you will probably still have the problem of falling circulation.