It was a busy weekend, so it was good to slump in front of the TV news on Monday night. In Sydney.
I had been helping my daughter buy a car. She had trawled several internet sites and listed the possible cars according to price, make, model, kilometrage, suburb, picture, and half a dozen other elements in the advertisements. She had clipped a few newspaper ads, though they had less detail.
At the tailend of the news came the finance. Job ads were up, according to the ABC’s finance reporter, quoting the ANZ job advertisement index.
The unemployment rate rises and falls and the ANZ job advertisement index usually shows trends a couple of months in advance. But, unknowingly, it is showing another more profound change – again well in advance.
For several years now, the index has measured both newspaper and internet job advertisements. The trend is unmistakable. The number of newspaper ads are falling as a proportion of total job ads, and in some places falling in absolute numbers despite the increase in the labour force.
The most recent figures show 100,700 jobs advertised on the internet per week compared to just 21,413 in newspapers. It was a record for internet job advertisements – a record that seems to be broken with each new month’s figures. A year ago the internet jobs were around 65,000 a week.
So the ANZ job advertisements index is also an index — of sorts — of the draining of classified advertisements from newspapers to the internet. It is a worrying trend.
Presumably what is happening with job advertisements is happening in other classifications – such as cars, as my experience last weekend shows, and real estate. But no-one is measuring the other classifications in the same detail. My guess is that cars and houses are lagging jobs because internet usage is higher among the head-hunted than among the buyers of used cars, and perhaps houses.
Why is it a worrying trend? Because the advertisements in newspapers pay for the journalism. The cover price is only between 10 and 20 per cent of the revenue of most newspapers. It could not possibly support the journalism, printing and distribution.
The point about the challenge posed by the internet to newspapers is not whether people prefer to read from paper or from a screen. Any idiot can tell you they overwhelmingly prefer paper. Paper is more convenience and easier to read. But that is not the question.
The question is how much are people prepared to pay for their beloved print? Once the classified revenues fall, either the cover price must rise or the investment in good journalism must fall to be replaced by cheaper material. Then the vicious circle starts. If the cover price goes up or the quality falls, fewer buy it. That requires further compromises in quality or still higher cover prices.
The internet (combined with falling literacy) is also affecting the circulation of most newspapers in the developed world – particularly weekday editions.
However, it would be alarmist to declare the death of the newspapers, let alone print media in general. For a start, classified advertisements usually bring in less than half of the average daily newspaper’s advertising revenue. Display advertisements will continue to do well.
Indeed, display advertisements do not do well on the internet. Classifieds do well on the internet because computers are good at sorting lots of data in the way the user wants. But most internet users are intent on getting certain information. They wear information blinkers. They are not open to “irrelevant” advertising the way newspaper readers are. Despite the misnomer of software as an “internet browser”, internet users do not browse and graze in the way that newspaper readers do.
A good example is the way that some employers place their job advertisements in the front of the paper as display advertisements. Those employers are not seeking someone who is unemployed (or unsatisfactorily employed) and seeking a job. Rather they are seeking someone who is already employed, not looking a job advertisements, but might be enticed away.
That said, newspapers are under pressure. That is not alarmist. The challenge for newspapers in the face of an inevitable decline in classified revenue is to keep the standard of journalism up to continue to attract the sort of readers whose patronage makes display advertising work even better.
If this kind of journalism declines, it will affect the whole society not just newspaper readers.
Back to Monday night’s television. After the ANZ job figures came the 7.30 Report. It had an interesting piece about golden staph being contracted outside a hospital for the first time in Australia. It was based upon an article in The Australian that morning. That is fairly typical of broadcast news, current affairs and day-time shows. Day after day the airwaves are filled with material that originated in newspapers’ newsrooms. It is certainly true in Canberra. Most of it is never attributed.
For decades newspapers have been hugely successful enterprises, never asking for a subsidy or grant, yet pouring out a lot of public good, admittedly among an awful lot of pap and shallow reporting. Nonetheless, you would certainly notice if it were not there.
The newspaper industry (and the media in general) has been particular poor at presenting its own case. Imagine, for example, if newspapers carried the guff that wine labels carry: “This extraordinary product crafted from years of journalistic excellence and expertise, brought to your breakfast table without fail in a daily miracle, combining the rich flavours of analysis, commentary, news and lifestyle . . . .”
Newspapers do not even an industry association to lobby government and meet critics, like everyone else does. Hitherto perhaps newspapers have felt powerful enough not to worry.
But as this classified revenue falls, the newspaper industry and the public should take care that short-term cost pressure does not result in lower quality journalism. If it does, it will be difficult to retrieve.