One of my third-year journalism students at the University of Canberra asked me this week what future would there be for him in journalism in the light of the announcement by Fairfax media that it would cut 550 jobs in Australia and New Zealand.
The answer is that career prospects in journalism remain fairly good. Everywhere you look you see people consuming media — either reading newspapers, listening to radio, watching television, or browsing the internet.
The big question is whether and how quality journalism can survive in the changing technological and business environment.
There are some good and bad signs in the Fairfax announcement. The good sign is that most of the cuts are directed at efficiencies, mainly in head office and central functions, IT, accounting, and newspaper production. A large portion of the journalism jobs to go are also to be the result of efficiencies — in combining the production of The Sun Herald and The Sydney Morning Herald. Surely, the former must improve as a result.
To the extent that efficiencies are made on the production side — printing, editing, and support staff — there is more money available for the writing of the journalism.
The bad sign is that other savings in journalism will be directed at more highly paid journalists. These tend to be more experienced with a greater capacity to hold government, business, and other organisations to account and to analyse events.
That said, there are probably quite a few highly paid journalists who are not pulling their weight.
Newspapers are different from virtually every other business. First, the product has to be built up from the ground every day, unlike, say, margarine which remains constant.
Secondly, the part of the product which is most appealling to consumers — the journalism — brings in very little direct revenue. In most other businesses the costs go directly to the production of the item that is sold and the revenue comes directly from the item’s sale, whereas with newspapers, the bulk of the revenue comes from advertising that parasites off the journalism.
In a purely business sense, it would be nice not to have to produce the journalism to obtain the revenues from advertising. The difficult of business judgement comes in determining how much and of what quality must the journalism be to retain and increase the advertising revenue.
Thirdly, the owners of newspapers, and broadcast media, have had a greater public presence and have had the doors of power more open to them than the owners of other similar-sized businesses. Hitherto, that has resulted in a fair amount of indulgence by media proprietors. They have been prepared to accept lower rates of profit. Kerry Packer indulged the Bulletin for decades. Rupert Murdoch continued to publish The Australian at a loss for years. But that is changing as media assets move from family dominated entities to entities owned by a disparate number of shareholders of a public company, with all eyes on profits and return.
Fourthly, newspapers have been largely shielded from the fierce winds of international competition that have blown through Australian manufacturing in the past few decades. No cheap imports from China could compete against the locally manufactured English-language newspaper. So, there was no huge imperative to get more efficient.
Newspapers managed to obtain some efficiencies through computerisation in the early 1980s but they have not had the concerted competitive pressure that other industries have had.
That is changing – rapidly. The competitive internet has eaten into newspaper classified ad revenues. Even if newspapers had not lost the majority of this business to new entities, the bulk of the revenue would still have been lost because on-line advertisements are mostly free.
But all is not lost. There are encouraging signs that newspapers – and quality journalism with them – are managing the online revolution.
First, the internet is providing a new platform for advertisers which provides money for journalism. The internet gets $1.3 billion a year now, and rising. It is unclear how much of this is going to sites with independent news because the statistics are not gathered that way, but presumably a significant portion. Secondly, print revenues are not collapsing, at $4 billion last financial year.
Thirdly, circulations may well be soft, but many of the “readers” who are deserting are not “readers” at all. Rather they are people who bought the paper for cars, jobs and houses which these days are found on the net. Editorial staffs cannot do anything to get these people back. There is some evidence that these people are the lost “readers” because some newspaper’s Saturday editions which used to carry the ads they liked are being disproportionately affected.
But the AB market will stay. They like print and are willing to pay for it. And they use the net as well.
As internet advertising rises and print either falls or stays static, the real question is whether enough of these revenues stay with companies like Fairfax to support quality independent journalism, whether delivered in print or on the net or both. Despite this week’s announcement, it looks that way.
It will be better when the Audit Bureau of Circulation starts publishing details of internet hits on newspaper sites so advertisers can see what value they are getting for money. This is expected before too long.
A fourth reason for my third-year student to be optimistic is that the start-up costs for an internet news site is much lower than for a printed newspaper. So they are being started and journalists are being hired to write for them. Fairfax has already started an online newspaper for Brisbane and Perth. Other capitals where there is no Fairfax paper are bound to follow. Rupert Murdoch’s News Ltd has also started one for Perth. They could never have started paper versions. These publications are bound to grow.
In short, the reports of the death of independent quality journalism are premature.