Leaked email raises questions over Fairfax circulation numbers
Fairfax Media has not been fully informing the market about the nature of about 20% of The Age’s circulation, an internal email published by Crikey today suggests.
The revelation has major implications for advertising rates in the already beleaguered newspaper industry across all of Australia’s major publishers. It could also lead to a shakeup of Audit Bureau of Circulation rules over what can be counted as an audited newspaper sale. Although it appears to accept that the email is genuine, Fairfax describes Crikey’s claims as “misleading and wrong”.
Source: Crikey
According to the Crikey report, the 2007 internal note is marked “sensitive information” and points to a “significant risk to the business” if the information reaches the market. It is unclear who the author of the note is, or if they are a current member of Fairfax staff.
However, although it appears that the market may not have had a true picture of the newspaper’s circulation, Fairfax was technically operating within the ABC’s rules.
Crikey says that the email states that 40,000 “educational copies” of Melbourne’s The Age were being distributed at schools and universities which was, says the newsletter, “30 times more than it was publicly disclosing”. Crikey also says it has a document that suggests 35,000 copies were going “through the secret channels”.
According to Crikey the email – part of a discussion over whether to separately distribute the title’s Education section – goes on:
“We would make the total volume of copies going through these channels a matter of public knowledge … we would effectively write down the value of advertising in weekday editions from 200,000 circulation to 160,000 circulation, causing a pretty hard sell for the advertising team.
“The flow-on effect would also affect the Sydney Morning Herald and probably every major masthead in Australia in a similar way — not so bad for your publication if you aren’t quite so reliant on advertising revenue (aka News Ltd) but a big problem for Fairfax.”
The issue arises because of the way that ABC audit rules are drafted. According to Crikey, they allow distribution of copies to educational institutions to be counted in some cases as regular subscriptions if they are technically distributed to an individual. But advertisers would be less keen to reach the newspaper’s audience if it is true that one in five copies are going to students.
In theory, advertisers, via their media agencies, may believe that have paid millions of more dollars for advertising than they should have.
At the time of posting, the ABC had not responded to Mumbrella’s invitation to comment.
This afternoon, Don Churchill, The Age’s publisher, issued the following statement:
“The Crikey article is misleading and wrong. It is based on an email over three years old, which contained scenarios that were rejected by senior management as inappropriate.
“The Age’s subscriptions and audit practices are fully and totally within the Audit Bureau of Circulation rules.
“None of the proposals covered within the leaked internal email were adopted by The Age senior management. The suggestion that The Age might separate its Education section from the main body of the paper was rejected.
“We have no proposal to change that position and The Age Education section remains part of the main paper.
“Like all our major competitor newspapers, The Age supports schools with a comprehensive education program aimed at developing students’ awareness of issues that affect our community.
“These papers are paid for by schools and are not individual subscriptions. These sales are reflected in our audited circulation figures under the ‘education’ channel and represent less than 0.4% of total circulation at June 2010, as per the Australian Bureau of Circulation (ABC) audit rules.
“We also offer subscriptions to tertiary students (as do News Ltd newspapers, including The Herald Sun and The Australian).
“The Age’s subscription offer to university staff and students, via the tertiary card, is open and transparent.
“I wish to reiterate that at all times The Age’s procedures have complied fully with the rules set down by the Audit Bureau of Circulations. Further, these are independently audited.
“It is also an utter fabrication that The Age sought to mislead our advertisers. It is absurd for Crikey, or anyone else, to imply that we would jeopardise these important commercial relationships by dealing with our advertisers and their agencies in anything less than a fully transparent way.”
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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Just a note to anyone who wants to join a conversation on this one in our comment thread – please bear in mind that there is no suggestion that anything done by Fairfax was in breach of the ABC rules as they stood/ stand.
It would be good to couch the conversation in those terms.
Cheers,
Tim – Mumbrella
The next ABC rules meeting will be a cracker.
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This is very hard to believe, given Fairfax’s sterling management and the sheer brilliance of its editorial content.
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Negotiations with Fairfax are going to be fun this year.
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Agreed ANONYMOUS; you are so right. A decent long-standing publication house like FAIRFAX would not stoop to misleading us like this; they have too much to lose. And their management have proven over decades ‘that they hold their public reputation in great stead”.
So hopefully that answers any queries.
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How is a market of 40000 (or whatever) uni students/staff a hard sell for Fairfax ad sales staff? In the era of niche marketing how is this not a positive?
lolwat
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The money they charge for print just doesn’t make sense these days…
Between my computer, my iPad and my phone i dont even know what a newspaper looks like anymore…
I hear it makes a great liner for bird cages though!
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Please also be aware that while such copies are counted into the ANPS (Average Nett Paid Sales), the proportion that are:
* Accomodation and airline sales
* Educational sales
* Event sales
* Multiple publication sales
* Bundled sales
* NZ sales
* Other Country Sales
* Other Australian Sales
are broken out and reported separately in the ABC data.
That is, the ‘headline number’ consists of all conceivable sales distribution channels. It is then up to the buyer to conduct their buy on the basis that best suits their clients needs. For example, for some brands, fliers and travellers are vitally important they are included in the rate negotiations whereas for others they aren’t – same goes for educational sales.
Anyone who relies on the headline number reported in the media without consulting the full breakdown (transparency the media agencies insisted upon during the last rule re-write) is simply either (i) not a subscriber to the ABC audit data … cheapskate or (ii) is lazy.
Even if Fairfax did sling an extra x-thousand copies through universities within the rules guidelines, it would be there in the audit for all to see. And by the way, the rules re-write also includes stiff financial penalties and even exclusion from the ABC audit if anyone is caught cheating.
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Doesn’t surprise me at all. Print people will do/say anything to hold out for a few more bucks over a few more years. Sad really.
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@John Grono Yes, but the point is that under the current definition, educational sales are not in the audit for all to see.
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And as an aside to some of the recent posts, to ‘rort’ the printed copy audited data would be extremely costly and time consuming – and it would be completely transparent. I wish the same was true for online copies.
And no … I don’t work for Fairfax or any other publisher.
And to put some perspective on the perceived reporting quality that the cynics are tossing around, can I remind you that over 20 million newspapers (that is audited data) are sold every week in Australia (yes – sold). I realise that number pales into insignificance when compared to the 89 million online Unique Browsers every month in Australia – UBs being the most preferred sales number of the digerati. Now I reckon THAT is a tough sell in a country of 22.5 million people but few seem to care about that minor detail. If you’re upset with The Age have a look in the hall of mirrors.
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I must say I’m a bit sick of a) Crikey’s hatred of newspapers, since newspapers are Crikey’s primary source for most of their stories and b) their “everything is a conspiracy” approach to news.
Maybe they should concentrate on breaking stories, like Mumbrella does?
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Is this the scheme whereby students pay $20 per year, get a card, and can show it at a campus distributor to receive a copy of the local Fairfax daily?
Yeah… I’ve got news for you, not every paper gets picked up every day. Not that Fairfax would tell you that.
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Jim. Completely incorrect. They are there for all to see. I was part of the group that drafted and implemented them.
A quick look at the ABA website shows that for the latest audit period that The Age had 1.94% Accomodation and Airline Sales, 0.36% Educational Sales and 0.76% Event Sales.
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Kind of you to say that Andrew L,
But credit where it’s due – Crikey broke this story, Mumbrella followed it up…
Cheers,
Tim – Mumbrella
Andrew L, couldn’t have put it better, and actually I did post on the Crikey website…today’s Crikey was a News bash extraordinaire…it’s as though the guys at News are doing the devils work. Crikey’s agenda is very clear
to A Dog, I’ m assuming you’re a on-line person only are you? good to hear, you stick with it, the biggest thing on–line apparently is the 230 million+ people who looked at
https://www.youtube.com/watch?v=_OBlgSz8sSM …
it’s this dross and porn that keeps the web alive, any decent news on-line is aggregated ( read stolen) from the press…unless it’s a newspaper web site
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This reeks of another salvo being fired in the very Melbourne turf war between Fairfax and a former employee who has teamed up with some Real Estate agents to establish a community paper in direct competition. Do what you can to discredit the opposition at every turn, even if it’s old, unsubstantiated and not directly relevant to your case.
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Tim, while I don’t know the exact scheme you are referring to, the rules were designed with such schemes in mind. The key thing to remember is that the audit rules cannot dictate commercial decisions.
That is, a publisher may decide to sell a heavily discounted package to students in an attempt to cultivate a reader for life. That is, it is a marketing strategy and generally the difference between the cover price and the paid price is recognised by the publisher as a sales and marketing expense. Also key, is that there needs to be a ‘relationship’ with that subscriber that has a clear opt-in by the subscriber. The fact it is way below cover price is irrelevant.
But where you err is that the audit accounts for the copies distributed each campus and the nett returns from each campus. So, Fairfax and each publisher don’t tell me that … they tell it to the auditor. And by the way, any publisher can challenge any other publisher’s data – yet another transparency cross-check.
Anything else that we have included in the audit rules that you think may have been missed?
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I smell a cat: Yep, my feline sensors are going off as well, but I think that is beside the point in this instance. The only reason the Cat-amites find Fairfax so easy a target is that, managerial, it’s a sheltered workshop.
Too much B-school BS (Hilmer), too many mates (Walker), too little of anything (kirk) and lately, too much cost-cutting (McCarthy) to the immense detriment of the papers’ content and credibility — particularly credibility, as the Press Council’s scathing ruling on The Age’s shameful Theopanous hatchet job would indicate.
Strongly suspect The Age will be gone for good within 12 months.
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Fancy a wager on that Inky?
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I got a tertiary card for free through a student group i barely remember joining. Since I’m only at uni one day per week, i’ll assume there are a lot of papers going to waste.
The aim of the cards may be to cultivate a reader for life, but I reckon the outcome was a generation of students unwilling to pay more than $20 for a year’s worth of newspapers.
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The ABC prescribes to a strict definition of sales which captures the intent of an individual to purchase a publication.
Some types of sales however, are by their nature made indirectly, as John Grono explained.
While these are included in the headline Average Net Paid Sales figure their percentage proportions are also broken out separately.
Education Sales are one such item and are defined as ‘…a sale at a price of a publication under an arrangement by or with the publisher of the publication for distribution at a learning institution.’
Typically, they are copies purchased by a learning institution on behalf of their students and staff.
Education Sales do not include copies purchased by individuals through retail outlets such as newsagencies or subscriptions who happen to be students or teachers. These are treated as a ‘regular’ sale and are not broken out separately.
The ABC provides independently verified, comparable, circulation data based on copies sold of a publication. It does not profile the sales by type of purchaser. Profiling and demographics is the scope of readership.
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John Grono: A wager? Let me review the form as I mull a bet:
Fairfax revenues are down 2.5% on the most recent numbers. SMH and Age circulations are declining at around 7% per annum. My local newsagent is offering a week’s subscription for $5, which has to be a red-ink exercise. Yes, they are back in the black, but only as a result of cost-cutting, not growth, of which there is not the slightest suggestion of anything really tangible down the road. maybe, just maybe, there will be an uptick in ads, as mcCarthy has forecast, but it will be a small gain and most of those potential dollars will go elsewhere
The one unit that has produced profits, Digital, is reportedly about to be taken over by the Dead Tree faction.
Editorially, The Age (less so with the SMH) has carved out a niche as the house organ of the reflexive left. That’s not a political criticism, just the overture to an observation that it is letting the bulk of Middle Melbourne go begging. Consider the deveny debacle: First the paper alienates middle-class Melbourne, then it alienates the trendies by firing her.
So, yeah, I’ll take that bet: Age dead by the end of 2011 — unless there is a galvanic change of attitudes in the boardroom and we see a last-ditch effort to go berliner or tabloid, re-focus on display ads and broaden the readership.
What about $50 to the charity of either of our choices — the Cat Protection Society in my case? Should it survive, you’ll have to trust my honesty, as I yours.
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I’m amazed… is the collective memory of media so short?
This article has been run in one form or another for the last 10 YEARS!!!
sure argue about print is dead… or dying. But this little numbers booster has a long history, has been reported on many times before…. including by crikey!!! so it isn’t news
here’s one from 2007
http://www.crikey.com.au/2007/.....them-away/
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First, Tim … can Inky and I safely assume that publicly organising this bet on Mumbrella in no way legally exposes Mumbrella.
Second, the bet is “The Age dead by the end of 2011”. (Yeah, I know it’s more than your original “gone for good within 12 months”, but I’m a generous person and will give you the extra few months.)
And by “dead” I mean DEAD. That there is no content produced and distributed under the aegis of “The Age” brand or banner.
Adding the Johnny-Come-Lately riders of ‘unless there is such-and-such .. or this happens … or the planets align …’ makes it all too muddy and open to interpretation. It has to be clear cut. THE AGE IS DEAD BY THE END OF 2011.
If so, it’s a bet. My charity of choice is The Cerebral Palsy Foundation.
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Hi John,
If Inky accepts your terms, feel free to set your wager (by the way, the Tim who posted higher in this thread is a different Tim to me).
For what it’s worth, I think I’ll take your side of the bet. Despite everything, I don’t see the print edition of the Age dying anytime soon.
Cheers,
Tim – Mumbrella
John, you’re on — and, believe me, it is a bet I would be happy to lose. Should fairfax be sold or a new attitude take hold at the highest level, and should that turn the age around, I wil cheer lustily..
The idea that Melbourne might be left with only a Murdoch comic is appalling, so it would be $50 well spent.
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We’ve got a deal Inky!
My rough maths says that with The Age selling over 1.25 million copies a week, and with 14 weeks left in 2010 and 53 weeks in 2011, then they’d need to be shedding an average of around 18,900 copies every week. On a compound basis they would need to lose 16% of sales every week to reach zero by end of 2011 (though of course any business would shutter earlier if that happened).
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Are we really to believe that the Age is the only Newspaper that engages in murky circulation “strategies”…surely its time to start sniffing around News Ltd Backyard as well.
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JohnG: I certainly won’t dispute your calculations re the route to zero, but I wasn’t actually supposing that The Age would vanish by slow degrees. Rather, someone will yank the plug and the lights will go out all at once. That’s the way newspapers tend to die — they struggle along, getting thinner, evermore lightly staffed — then the life-support system is withdrawn.
I would figure the plug-pulling will happen when The Age is down to only one profitable edition per week, and from what i understand it is very close to that point now.
Because this is all for a good cause, I’ll even pay up if/when The Age ceases print publication and becomes online-only.
And, as I said, I genuinely hope I have made a losing bet.
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I remember delivering The Age as a kid. On Saturdays it was a killer. I could only ever fit 10 copies on each side of the back of the bike and the newsagent owner would drop off bundles along the route for me so I didn’t have to ride back to the shop to re-stock. Sometimes, the weight of them would send the front wheel flying up in the air as I rode from road to footpath. Ah, the good old days. Maybe this time next year John G and Inky, IPAD’s will be delivered free to every house with The Age on it for free for the first 12 months as well with an offer for a discount subscription after that. I reckon at a stretch, I could fit 50 IPADs on each side of the back of the bike.
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How cheeky sneaky and annoying of them!
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