Across print and digital, newspaper customers are turning away

Tim BurrowesToday’s newspaper and digital subscriber numbers are the worst yet, says Mumbrella’s Tim Burrowes.

Soon I’m going to stop writing about this each time the quarterly numbers come out. It’s too depressing.

The signals get clearer. Newspapers’ final days in print are approaching, particularly for those in the Fairfax stable. Yet the evidence is now making clear that paywalls will not take up the slack.

I see a new sign most days.

The only subscriber in the village

The only subscriber in the village

I rent in a new building. People familiar with Sydney might know it – it’s the one with the weird mirror and plants up the side of it, on Broadway.

If I look down, I can see the building across the road that for many years was the headquarters of the Sydney Morning Herald. And if I look out to the far western horizon, I can see where the readers of the Daily Telegraph live.

The guy on the front desk pointed out something depressing the other day. Of the 500 or so apartments, I am the only one who has a daily newspaper delivered.

It’s full of young students from the nearby university which doesn’t make them likely subscribers. But nonetheless, it’s the most depressing sign of the times for the print industry I can think of.

Earlier this week, I picked up a copy of the Australian Financial Review from the supermarket under the building. I went through the self service checkout and my AFR was so light that after I scanned it, the machine couldn’t detect it when I put it in the bag.

The flatplan is of course determined by the number of display ads, and when there aren’t any, the paper becomes too thin for those till scales to detect.

As the year got under way, I began a grim game, looking each day to see whether the Sydney Morning Herald had yet had a full page ad.

Even this week there was at least one day where the only full page ads were house inventory to promote the new joint venture streaming service with Nine, Stan.

According to Standard Media Index’s roundup of ad spend for 2014, something like $127m disappeared from newspaper advertising spend last year. Given that News Corp just reported to the financial markets that its horrible plummet in revenues has eased off, I presume that much of that impact will have been on Fairfax.

As a reader I vacillate between sympathy for that disappearing business model and indignation at being taken for granted.

In December, the Sydney Morning Herald’s editor in chief Darren Goodsir was a guest on the excellent Media Week podcast. It may not have been the impression he meant to give, but he came across as hugely complacent about his remaining print subscribers. “Rusted on” was the phrase he used more than once. Which as a rusted on subscriber, doesn’t half make you feel taken for granted.

And that’s a feeling that gets stronger when you pick up a Fairfax paper the morning after a big news or sporting event. As a money saving move, there’s now just one edition which I guess goes to press at about 6pm at best.

The morning after the Socceroos won the Asian Cup in one of the team’s greatest ever moments and the Liberals were routed in the Queensland election, which paper do you think would have attracted casual readers? (Clue: Not the one that couldn’t cover the football and thought the election was still a cliffhanger.)

sunday telegraph sun-herald

Nights like that must break the hearts of Fairfax journos when they know they’re going to be murdered by the later editions of the News Corp titles.

And then independent Fairfax journalism reminds me why I still subscribe. This week, Michael West’s work on Google’s morally dubious Australian tax arrangements; last week Nick McKenzie’s piece on police corruption. And in truth, despite my grumbling, for as long as investigative journalist Kate McClymont continues to write for the paper, I know I won’t be able to bear to cancel my subscription. Dammit, Goodsir, I am rusted on.

So what of the digital outlook?

Today’s data contained another depressing first.

Those whose job it is to talk up the industry often claim that when you add in digital subscriptions (and ignore that they bring in much smaller revenues), overall paying audiences are up.

That ended today.

The combined print and digital audience fell for every single daily and weekend metro and national paper in the audit.

This table removes the double counting of print subscribers who don’t even know they are digital subscribers (more on that below). As you’ll see when you add the three types of subscriber – print-only, digital-only and print-digital packages – not a single masthead has grown.

Combined masthead audiencese

Combined masthead audiences

The Herald Sun's weekday digital subscriber numbers

The Herald Sun’s weekday digital subscriber numbers

By my reckoning, newspapers have fewer paying customers than at any point in the last half century or more.

It gets worse yet for News Corp’s Victorian title the Herald Sun. It became the first newspaper to see its digital subscriber numbers record a negative number compared to the previous quarter – down from 50,360 to 49,425. (It should also be noted that News Corp’s other big tabloids have never taken part in the digital audit – most likely because their numbers are embarrassingly small).

News Corp’s The Australian grew by just 173 digital subscribers.
And Fairfax Media’s SMH and The Age only showed their small digital growth of 1.75 percent and 1.38 percent with what is, I suspect, some significant jiggery-pokery.

I, for instance, subscribe to the seven day print edition of the SMH. I never asked about digital access and they didn’t mention it when they sold the package to me.

Yet subsequent customer service emails indicated that I count as both a print and digital subscriber. So I helped drive that small digital growth statistic, despite not actually having successfully logged into the website as a subscriber.

Over the years, I’ve tended to be somewhat sceptical about the SMH’s claims over subscriber numbers. We shot this video in 2010 when someone told me where to find a mysterious pile of SMHs.

Which isn’t to say that I don’t access the SMH online. But the paywall is so easy to subvert with a quick hop into Google Chrome’s incognito mode, that it’s easier than getting your subscriber details, which is something of a trial.

Screen Shot 2015-02-12 at 9.04.33 pm That process is so Kafkaesque and comical, that they’d have been better off not bothering.

Indeed, so bad is is the activation process that it actually gives me some hope that if Fairfax ever invested in getting it right, then the company may keep or convert more digital subscribers.

I won’t bore you with the whole process. Suffice to say that it involves needing to get a digital subscriber number (which they don’t automatically email to you), a system which locks you out when you put in your home address (if you don’t guess the format correctly) before urging you to call for assistance (on a number that isn’t provided).

smh locked out
If you do track down the phone number, you’ll be greeted with a recording telling you that you’ll half to wait 40 minutes to speak to a human or submit a query via the website.

At which point you are asked to fill out a lengthy form whose mandatory fields are more exacting than many countries’ tax returns, including irrelevant questions about delivery suspension, my “origin” (um, England?), company name, industry and whether I have a newspaper subscription. And fuck knows what I’m supposed to put in the field labelled LL_data, [DATA] Browser, [Data] Browser Version and [Data] Browser Engine.

support form smh

Only then do you get to to proceed to another field to tell them what your question is, via one of the largest dropdowns of different ways newspapers can be rubbish that I’ve ever seen.

smh dropdowns

After selecting from more than 60 options including objections to the cost, dislike of the content, problems loading pages or the app constantly crashing, the new subscriber may be wondering just what the hell they’ve got themselves into.

Or like me they may just give up at this point, activate Google Chrome’s incognito mode and carry on reading for free anyway, even after my subscriber number did eventually arrive.

Not too surprisingly, the newspaper and print industry prefers now to talk about the softer metric of readership rather than circulation  – as calculated by the EMMA survey which is conducted by Ipsos and paid for by those industry players. Broadly, it’s done by asking the online public what titles they remember reading, and taking that recollection at face value.

I see that Bauer Media’s Zoo mag – down today to a circulation of just 24,122 – apparently has a readership of 450,000, or 18.7 readers per copy. I recommend washing your hands before reading if you’re the 19th in that queue.

Which isn’t to say that Fairfax, or the wider publishing industry, has no future. It’s just that it’s hard to see it involving much in the way of paid for journalism.

Fairfax’s Stan video streaming joint venture with Nine makes sense. Particularly when there’s a helluva lot of unused advertising inventory that can be thrown into the partnership.

The merger of Fairfax Radio with Macquarie Radio Network to create a talk network should see one and one equal more than two.

And of course Fairfax is in a good position when it comes to real estate, even if it had to buy talent back into the company to get there.

Last week saw the launch of cultural festival Spectrum Now as the SMH’s new events play. While I’m not sure I can see the business model just yet, at least it’s a start.

This is still – despite Gina Rinehart selling out last week – a $2bn company. And unlike many other giant media companies, its debt situation is pretty good. (Why do people talk about Nine – market cap $1.7bn – buying Fairfax? Given the comparative capitalisations, shouldn’t it be the other way round?) So Fairfax still has options. It’s just that not many of them involve people subscribing to read journalism.

But it’s also time to be realistic. There are a lot of cheerleaders who have a vested interest in talking up the progress of paywalls. And there are also a lot of cynics who seem a little bit too glad that they aren’t working.

Where does the newspaper industry go from here?

I don’t know.

14 February – Postscript: While I’m the only person who gets the newspaper home delivered on weekdays in my building, on a Saturday, three or four copies of the Sydney Morning Herald and two or three copies of the Australian Financial Review come in. I’ve just been down to reception to pick up my SMH. Every one of the SMHs and AFRs delivered to the building this morning are seven days old. You couldn’t make it up.

  • Tim Burrowes is content director of Mumbrella

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