Fairfax weighs future of AAP news wire subscriptions
Fairfax Media is understood to be weighing up whether to continue its multiple subscriptions with the Australian Associated Press (AAP), while the news service itself has moved to reassure staff that any withdrawal by one of its biggest customers would not threaten its financial viability.
Sources at Fairfax have told Mumbrella that late last year the publisher, a major shareholder in the company, asked newsrooms across the country including The Age and The Sydney Morning Herald to do an audit of the amount of AAP copy used.
The internal review was understood to be part of an assessment to see whether Fairfax could operate without its multi-million dollar AAP news subscriptions, which cover a wide range of areas such as news, sports and photography. On Saturday The Weekend Australian published details of a Bain & Co report which recommended the company withdraw from the wire service in order to save millions of dollars.
Other recommendations in the report included moving to a 50 per cent contributor model and replacing senior journalists with less third-year cadets. A spokesman for Fairfax would not comment specificially on an internal review of AAP copy or the leaked Bain report saying only “the documents being referred to are well past their use by date“.
Mumbrella understands some Fairfax staff are becoming frustrated with the reliance on the wire service, which also provides copy to key digital competitors such as such as Ninemsn and The Guardian as they bid to keep up with their better resourced print rivals.
The move comes as Fairfax looks to further cut costs, with the company last week issuing a new round of redundancy proposals including slashing photodesk staff from 50 to around 12 with the publisher signing a new deal with the Getty Images to outsource much of their photographic needs as the company seeks to cut its cost base in the face of declining print revenues. Fairfax also subscribers to the AAP photo service but only as a casual subscriber.
Its various subscriptions make Fairfax one of AAP’s largest customers, and executives at the news wire are also understood to be have “accelerated” plans to meet with Fairfax over their various subscriptions in the wake of last weekend’s report, with Bruce Davidson CEO of AAP also emailing staff over the weekend to reassure them about the future of the news service.
In the staff email, Davidson took issue with the suggestion that the cancellation of Fairfax contracts “threaten the viability of AAP”.
“I would like to assure staff that this is not the case,” wrote Davidson. “The viability of AAP is determined by many factors and the cancellation or otherwise of services by a customer is only one.
“In regard to Fairfax’s services, we have not been notified of any wholesale withdrawal from AAP. Like all of our customers, Fairfax regularly reviews its content requirements. We are currently in discussions regarding several of the many Fairfax agreements – as is always the case as contracts expire or approach their end dates.”
The meetings between executives come as AAP seeks to convince Fairfax to continue putting sub-editing work through its Pagemasters service after the publisher gave notice on the contract last month leaving up 40 jobs up in the air.
Fairfax owns a 44 per cent stake of AAP while News Corp Australia also has 44 per cent with Western Australian Newspapers holding the remaining stake. As shareholder in the newswire the publisher already gets discounted access to the newswire and other subscriptions.
Nic Christensen
Bruce Davidson’s email to staff:
Hi everyone,
As many of you will have seen, the Weekend Australian today carried a story about various cost-saving measures recommended to Fairfax Media by consultants Bain and Co.
According to the report, one of the recommendations was to exit its agreements with AAP.
It went on to suggest that if Fairfax cancelled all services with AAP, it would “threaten the viability of AAP”.
I would like to assure staff that this is not the case.
The viability of AAP is determined by many factors and the cancellation or otherwise of services by a customer is only one.
AAP has a wide portfolio of services, with revenue from both media and non-media sectors, and continues to develop alternative sources of income from outside the news wire.
In regard to Fairfax’s services, we have not been notified of any wholesale withdrawal from AAP.
Like all of our customers, Fairfax regularly reviews its content requirements. We are currently in discussions regarding several of the many Fairfax agreements – as is always the case as contracts expire or approach their end dates.
I would also note that Fairfax Media CEO Greg Hywood was quoted in the Australian article as saying not all of the Bain and Co recommendations will be adopted.
If anyone has any concerns regarding this matter, please feel free to contact me or discuss it with your manager.
Regards,
Bruce
