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Fairfax boss Hywood says it is ‘inevitable’ SMH and The Age will close weekday print editions

Fairfax Media CEO Greg Hywood has said it is "inevitable" the company will close its weekday Metro masthead print editions in favour of "weekend only or more targeted printing".

Fairfax Media CEO Greg Hywood has said it is “inevitable” the company will close its weekday Metro masthead print editions in favour of “weekend only or more targeted printing”.

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In a speech to the Macquarie Australia Conference yesterday Hywood the costs cut from the business mean a decision to close its Metro Publishing unit – including The Age and Sydney Morning Herald and Australian Financial Review – would only cost the business $150m today, compared to $450m four years ago.

“But moving out of Metro publishing is not a decision we need to make, nor should we,” he added. 

Speaking to the room full of investors he noted: “Quite frankly we are watching what is happening internationally rather than observing any local media. What we are doing in our business is as advanced as anything that is happening offshore.”

fairfax emerging business model sklide

He also denied the company had been “pessimistic” about print, instead saying: “Perhaps it’s more a case of being too honest for their liking. We prefer telling it like it is and planning for it.”

In the talk he looked to the future revenue models for the company, predicting the SMH and The Age would have 65% of their print and digital revenues focused on the weekend, while the AFR would “likely focus on its weekday revenue strength”.

“Exactly when we move towards implementing a new model for our Metro titles depends on the view we form about trends in consumer and advertiser behaviour, but all the signs indicate it is inevitable – although some time away,” he added.

“The model will take shape over the coming years as our transformational journey continues.”

He also hinted the company could do a deal to co-locate printing operations with rival News Corp, saying they expected to save money from “increased industry cooperation on printing and distribution”.

Hywood also reiterated the company’s plans to focus more on using audience data to decide which stories to cover, saying 80% of web traffic for the SMH and The Age came from  20% of their stories.

fairfax macquarie stories

However, he also again denied a move to a click bait strategy pointing to a slide showing the top 10 most read stories in March which included investigations, politics, breaking news and sports yarns.

fairfax macquarie most read stories

“Digital-only publishing may be the next logical progression of the model, but we believe that the model we have discussed is sustainable for many years,” he added.

“Still, we have the confidence that, if necessary, we could make a more intensive digital-only model work because we are already doing it successfully and we have the proven capability.”

fairfax macquarie presentation digital performance

Hywood also gave an update on the company’s revenues so far this financial year, with overall group revenues down 2-3% on last year, with digital revenues up 2% but print revenues again down by 6%.

Looking at other areas of the business he flagged more growth in real-estate business Domain, and said that market was not a “winner takes all” environment.

The acqiuisiton and merger of Fairfax Radio Network into Macquarie Radio Network was also paying off, he said, with the company expecting to have made $15m in savings by June.

He also said streaming joint venture with Nine Entertainment Co Stan would exceed 1m gross signups this month, and have 500,000 active subscribers.

Hailing it as the “largest domestic player in the Australian SVOD market” Hywood said it has “shown clear value” and is “on a clear path to profitability”.

“Recently weekly sign-up rates have doubled compared to the same time last year and we continue to see both an improvement in conversion and an exponential reduction in churn after conversion from trial to paying subscriber,” he added.

“Stan is expected to reach cash flow breakeven during FY18.”

Alex Hayes

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