Fairfax Digital’s revenue was $61.2 million, up 43.7%, with a profit at the EBITDA level of $17.0 million, up 41.7% over the previous corresponding period.
Revenues grew strongly across all news and classified sites. Total traffic across all the Fairfax sites increased to over 6.2 million unique browsers per month, up 47.8% on the previous corresponding period. Fairfax Digital enjoys the leadership positions in online news (smh.com.au and theage.com.au), online dating (RSVP), and holiday rentals (Stayz), and strong positions in the employment, real estate and automotive classified categories. Fairfax Digital continues to invest in improving its competitive position in key markets, such as with the recent acquisition of Essential Baby and the launch of property site in.domain.com.au in Adelaide.
Fairfax released a good set of numbers yesterday thanks, in main, due to the excellent growth in its digital business.
As a newsagent I am tempted to blog from a negative perspective about Fairfax moving its revenue base from print to online and bemoan what this means for my business. The reality is that Fairfax is doing what every other major print media player globally is doing but with more success than most. They are advanced in monetising their traditional print brands through online offerings and they are bringing in new eyeballs and revenue through acquisition. The Trade Me acquisition from just a year ago, for example, has delivered A$20 million of the earnings.
Newsagents need to follow the Fairfax lead and find new sources of eyeballs and revenue to replace print products. Some are doing this, most are not. Newsagents need to be wary of investing capital in traditional areas of their businesses such as newspapers and magazines.
While sales will be key for years to come, they are not as strategies as they once were. The key investments will related to gaining greater efficiency from these decaying products. This is the big challenge for newsagents just as it is for Fairfax – they will drive production and distribution costs for newspapers and newsagents will bear some cost from that action. Home delivery margins must fall is Fairfax is to protect earnings from newspapers. Rural Press has been successful at this and Brian McCarthy’s role in the soon to merge Fairfax / Rural Press operation could see him bring Rural Press strategies to Fairfax. If this happens newsagents can expect to experience pain.
I have blogged here before about areas newsagents could consider developing in an effort to broaden the appeal of their businesses. The challenge is to alter the mindset of most newsagents. Having operated in highly regulated businesses and under the direction of powerful suppliers, newsagents are not used to being entrepreneurial. This must change.
For my part, my newsagency is benefiting from changes we have made over the last two years: creation of a card shop within a shop and to the front of our retail space; selling the home delivery run; entry into the art supplies space; expansion of our stationery offering; bold entry into the ink and toner space; and, better proactive management of our lottery offerings. The results achieved through these initiatives are excellent. Traffic is up and basket depth has improved.
We obsess about customer efficiency. Two years ago 77% of our customers used to purchase a newspaper and nothing else. Today, that number is 57%. While I say newspapers are challenged in the long term, our short to medium term goal is to ensure that newspapers customer are more efficient for us. We’ve implemented simple strategies to make this happen.