After a dark decade for Australia’s regional newspapers, a hopeful light flickers
The sale of Nine’s regional newspapers may be good news for the state of regional publishing, poses senior journalism lecturer Steinar Ellingsen in this crossposting from The Conversation, but it is also a reminder of the volatility of local news’ business model.
Over the past decade the profits of 160-odd regional and rural publications that make up the former Fairfax business division known as Australian Community Media (ACM) have fallen steeply
In 2012 the division made a A$169 million profit. In 2018 it was A$67.5 million.
Nine Entertainment Co acquired the division with its $3 billion takeover of Fairfax Media last year. It has been keen to get rid of it ever since.
There are grounds for some optimism about the long-anticipated sale. It may signal better fortunes for regional publishing. But any optimism must be tempered by ongoing concerns about the viability of the local news business model.
As an ex regional newspaper publisher In Mackay and Townsville, the ad market was reliant on some local display (before the chains came in and used cheaper national advertising platforms -e.g. Forty Winks), used car dealers, and real-estate underwrote the whole system. The FTA TV data says it all. In regional Australia FTA gets c 20-22% of FTA advertising for c35% of the population. And, due to infrastructure distribution costs can only spend 10% of total Australian FTA news budgets.
The same waterfall applies to local regional press. Advertising intensity by B2C required is much lower due to lack of business competition in these markets, and lesser unknown options, unlike in a complex metro cap city.
One has to view that the desire to pay for news is much lower in regional areas and largely taken care of by local radio as a production easy medium for information to flow to that required by the local community. We owned 2LT Lithgow against the Lithgow Mercury (owned by Rural Press,) and ultimately there was just not enough local news to justify local journalism. Having an open airwaves invite is just as good. So, for ACM the outlook in decline is bleak. However the ACM specialist agricultural publications should be able to keep going with field days and unduplicable farming information.
Unfortunately for journalists, you have been undercut by vast multiplication of web sites and social media platforms, where millions of new journalists and platforms have reduced the long-standing exclusive information concentration of the printing presses monopoly. There is really more journalism than ever before, it’s just that the profession and the monopoly press advantage, has been democratised. Hopefully ACM can count on Judith Nielsen’s pledge to give $100m for journalism.
One wishes the team at ACM all the best notwithstanding these likely declines
The extraordinary fact about local readership is always dismissed in the sales talks.
Distribution problems and poor home delivery ruined local news.
Local papers generally showed 80% readership – plus high response to the local advertised clients.
Surveys always showed higher readership than national newspapers.
But these figures seemed to be lightly regarded.
What they mean however is that people actually liked to read their local more than their daily.
The local paper is seen as a personal voice to their own environment and the advertisers part of their daily needs.
Catalano’s deal making was based on having real estate agents in bed. That is, the advertisers were shareholders. He might do it again on a bigger scale, but there is nothing in his track record that shows that he either cares or has expertise around the journalism. I’d be betting that this is an exercise in squeezing the poor old lemon dry.
The only scribes our kitty cat focuses on are those writing his pitched puff. It’s clear the only plan is real estate. Ask about his journalism ethics at The Age. His journo experience is crime and property.
This is a great piece. Hopefully, ACM’s new owners revamp the regional paper business model to keep them going.