Opinion

What does Fairfax’s Media’s data dump actually mean? And what’s going on at ACP Magazines?

Although I rather like stats, there are a few days a year where they become a little overwhelming.

Radio ratings releases offer eight such days annually. Over the space of a couple of hours, the data drops for the five main metro markets. Generally the phone starts ringing within 10 minutes, from station bosses aiming to give their interpretation of those numbers. It becomes a game of keeping them on the line long enough to sift through the data to try to discover the real story you need to ask them about. Within minutes a blizzard of press releases follow too.

In truth, the press releases mostly get ignored in the race to write the story. Then they’re mostly ignored because the story is already written.

And twice a year, a similar exercise surrounds the release of the monthly magazine sales figures, albeit under embargo a day or so before. Four times if you include the weekly mags and newspapers too.

Friday was such a day.

And in the blizzard of topline headlines, I think most people missed chewing over what it all means.

So 48 hours on, I want to draw breath and do so. Because there’s a lot to think about.

Not least because Fairfax chose that day to release a heap of new data from outside of the audit process on how it is travelling digitally.

Clearly it was designed to counter negative headlines around its poor print numbers. From that point of view, it wasn’t much of a success – not least because the print numbers are released under embargo, so the stories were already written and published.

But more importantly, it would have been almost inconceivable much more than a year ago that Fairfax Media would be the company setting the agenda on data transparency. I suspect that there will soon be pressure from the market for News Limited to respond. And then for the Audit Bureau of Circulations to provide a wider digital data verification service, although that is already in train.

The digital numbers are important, but let’s start with the print side of things.

Men’s magazines

The biggest shock for me was just how badly FHM – and indeed ACP Magazines generally – fared.  I’ve been writing about media on three different continents for a decade now, and I’ve never seen a major media title lose half of its sales in a single year before.

One possibility I’d anticipated was that the monthly FHM had been giving away cheap copies and had perhaps stopped. But a look at the ABC certificate for the last year negates that. There never were any of those declared. Instead what we see is an accelerating decline.

fhm_last_year_2012

Source: ABC. Click to enlarge

A year ago the title had just over 50,000 sales. It lose 10,000 of them in the first six months of last year, dropping to 40,000. Then the decline accelerated, dropping a further 14,000 in the last six months.

There are, I suspect, a few factors at work. First, ACP’s debt-laden parent company – now known as Nine Entertainment Co, previously PBL – was being prepared for a float. I wonder if marketing costs were being cut from the budget to try to make the numbers look better. The float didn’t happen, and of course, ACP’s numbers are now worse than ever.

So today’s news of the talks to sell to PacMags make sense even if it would create a mega mag group.

Another factor is simply that of the threat of the internet to the men’s market. When a big element of the product is semi-naked bodies, it’s hard to see a bright future for the sector. Which would explain fellow ACP title Zoo Weekly’s big fall too. And indeed the drop for ACP’s soft porn titles Picture and People.

Source: ABC. Click to enlarge

At least Zoo Weekly’s decline – about 15,000 in the first half of last year and 8,000 in the second half – appears to be slowing down.

Another bellwether would be NewsLifeMedia’s GQ, by the way – but it isn’t audited. Based on its last available Roy Morgan readership numbers (96,000 for GQ vs FHM’s somewhat doubtful 144,000), I wouldn’t be surprised if its sales are even worse than FHM.

It feels to me like all the publishers may simply be squeezing the last drips of profit from a sector they view as beyond saving.

Then too is the cyclical nature of magazines – even in normal times, some titles decline and die as new ones are launched. It tends to be a swifter cycle than other media channels.

That may explain why the younger (and in my view excellent) Men’s Health, from Pacific Magazines is holding relatively steady. (Its non reliance on naked women is of course another reason.)

mens_health_abcs_2012

Source: ABC. Click to enlarge

However, assuming it is a category specific move away from print, ACP’s claim to be investing in digital does look thin, for male readers at least. As I write, much of the content on the FHM homepage is weeks or even months old, and there’s no app for either FHM or Zoo.

Newspapers

Meanwhile, Fairfax got the worst of the headlines. The SMH’s Monday to Friday sale was down by nearly 12% year-on-year to well below 200,000, a historic low. It was down nearly 8% on a Saturday with sister Sunday title the Sun-Herald down by just over 8%.

Fairfax has given a few indications that its strategy is to stop so many cheap giveaway copies to concentrate on genuine readers. One hurdle to direct comparisons is that the way these are declared changed after questions were raised about potentially dodgy deals (not that the new system is much better at identifying genuine full price sales).

So is that why The SMH fell so badly?

Take out the different types of bulk giveaways and the latest sales number was just over 168,000 (although I stress again, that doesn’t mean all those copies were sold for $1.50 apiece.)

A year ago the same maths would deliver a number of nearly 192,000.

That gives a year-on-year drop of about 24,000 – so still just over 12%.

So the idea that the fall is about stripping out “bad” copies doesn’t really stand. The top line sales are down by slightly more.

herald_abc_q4_2011

Click to enlarge. Source: ABC

Which is why the digital numbers start to matter. At some point the newspaper publishers need to start putting on digital readers at a faster rate than they drop out as print readers. Which is why the new Fairfax data comes at an important moment.

fairfax metro report

Source: Fairfax/ various data sources. Click to enlarge

Let’s take it a line at a time.

Monthly unique audience

Audience matters more as a reach argument in sales negotiations, but is also relevant when sales conversations are based on sponsorships rather than CPM.

Last year, Nielsen puts the SMH’s unique browser audience at about 2.8m and The Age 1.7m. because the IAB pushed Nielsen into a hybrid panel and cookies system, those numbers aren’t comparable to previous years. But hopefully there is less double or triple counting of people across multiple devices than previously.

Average time on site per person per month

About three-quarters of an hour for both – down slightly on 2010, but again the methodology had changed. I honestly don’t know that this number is that helpful, except as the first point on a trend graph. Compare it to TV or radio and it seems low.

Page views

We’re still with publicly available data at this stage. Insofar as you need to deliver a number of page views to charge your CPM, it matters. About 150m for the smh.com.au and just over 100m for theage.com.au. On a CPM guesstimate of $5, that equates to revenue of $1.25m. I hope that’s per month, not per year, although the data is not clear on this point (I’m waiting to hear back from Fairfax).

Video streams

Video is where it gets seriously interesting. Across smh.com.au and theage.com.au there were more than 10m video plays per month.

A few points occur around that. First, that’s up about 20% year-on-year, according to Fairfax’s numbers. It’s solid growth, but it’s not the kind of exponential growth I half expected to see.

And let’s remember that it was driven by autoplay. You can see why Fairfax is reluctant to turn it off. Call it a CPM of $50, and that’s a half a million dollar a month revenue stream.

Although, to put it in the context of TV, something like Seven’s My Kitchen Rules would deliver that number of advertising impacts in a single ad break, with room to spare.

Mobile sites

Across the two mastheads, mobile usage and page views have both doubled – although mobile traffic still makes up less than 10% of the total.

Phone apps

Again, the apps numbers are fascinating reading. You can bet your life the staff of News Limited were scrutinising this data.

However, this number is not as transparent as it first appears. Based on the fact that tablets are broken out later, we have to assume these are smartphone apps only and we don’t know the breakdown between paid and free. (Edit: Fairfax now confirms this)

There are five SMH branded iPhone apps in the Apple store – SMH news (free), SMH Good Food Guide (free), SMH Good Cafe Guide ($2.99), SMH Good Food Shopping Guide (99c)and SMH Everyday Eats ($2.99). There’s just one for The Age news offering which is also free. (Edit: Fairfax says that the only apps included in its data are the news app for The Age and smh.com.au, not the other branded apps. It is choosing not to release the value of in-app subscriptions)

The number of downloads to date sounds kind of impressive. Until you think about it. Around 75,000 of the SMH app and 62,000 of The Age.

Fair to assume that most were for the free news app. Let’s be generous and assume that there were 20,000 downloads of the $2.99 apps. That’s only $60,000.

But the number that shocked (and depressed) me was average daily unique browsers. Just 3576 for the Herald and 2924 for The Age. So about 5% of those who downloaded the apps use them every day.

Tablet apps

This is slightly more encouraging. More than 200,000 downloads of the SMH app and just under 200,000 for The Age. The apps were free, but the numbers were still decent.

But, but… the average daily unique browsers number is disappointing – not much more than 10% of those who have downloaded the app use it every day, by the looks of it.

I’m also suspicious of the claimed monthly page views via tablet of 33m for the SMH and 29m for The Age. I suspect (and am waiting for Fairfax to clarify) that Fairfax has counted both in-app views and also those reading the website and happening to use their tablet to do so. Clearly this is key information for in-app advertisers that could do with being broken out separately. (Edit: Fairfax says this figure is for page views within the apps only. I remain a little doubtful that 26,000 daily browsers would really generate 33m monthly page views although it’s not entirely impossible.)

Digital editions

I’m less surprised at how low this number is. Three or four thousand people across each of the mastheads choose to read what is effectively a PDF of the paper. It feels like the worst of both worlds – the lack of interactivity of a newspaper, combined with the lack of tactility of online. it never seemed a great strategy.

Taken as a whole, these numbers give a snapshot of a company in transition from print to digital – and finding it tough, but no tougher than any other major publisher.

It’s also worth noticing that these are only the numbers from Fairfax’s Metro media division. Also lost in the noise was a separate announcement from the Australian Financial Review that it’s total online subscriptions now sit at 10,987. Which based on a sub of $680 would be $7m (although there are probably a fair few bulk deals in there).

However, by putting the numbers out there, Fairfax has given a better picture of what everyone is dealing with. You may recall that to coincide with the launch of The Australian’s paywall, News Limited launched The Future Of Jouralism website, to foster informed debate about the digital transition. A good contribution would be a similar level of transparency.

What these numbers make very clear though is that the transition is going to be hard.

Tim Burrowes

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