On Tuesday 25th August 2009 The Australian published an article entitled 'Losses underscore worst environment that Fairfax chief has seen'. Keeping in mind that this article is a commentary by a Nationwide News paper of Fairfax, I will mostly deal with the facts of this article. It noted that Fairfax's full year earnings before interest, tax, depreciation and amortisation fell 27% to $605 mill. That is a loss of $380 mill. Due to these losses Fairfax is running with 1000 less people than in the last financial year. Fairfax chairman Ron Walker said, "If the board had done nothing and continued to rely on revenues from the SMH, The Age and The Australian Financial Review we wouldn't be in this room today."
This highlights the issues facing media in the 'global village, ' a term coined by Marshall McLuhan. Globalisation, mostly through the invention of the Internet means a new platform for journalism, as previously discussed. Yet companies are finding it difficult to deal with both the local and the global online. For example, the article noted dating site RSVP owned by the Fairfax brand also suffered loss over the past financial year. This site can be used globally, however links and networks people in local areas so that they have a better chance of meeting each other. In terms of journalism The Newcastle Herald online relies on about five stories a day of world news to cover its global content, the rest of the site is local content. But are those five stories enough to interest readers who live outside of Newcastle and therefore create a balance of global and local for their advertising market?
Probably not...
Online advertisements fell 8% in terms of profits for Fairfax. This could be because advertisers find it difficult to advertise to a broad audience as is found on the Internet. Another argument pushing for localisation over globalisation is the possible homogenisation of journalism. The article mentioned reports In The New York Times and the Washington Post about the possibility of forming a consortium to charge for online news content. In other words a partnership between News Corporation and Fairfax that would undoubtedly result in very narrow minded news content.
The local versus global debate is one of numerous facets, this article merely touches on the surface of the repercussions of loosing local content and moving local content to the online platform.
Tabakoff, N. 'Losses underscore worst environment that Fairfax chief has seen,' 25 August 2009, The Australian, Fairfax media.
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You need to llok past the obvious headlines. There's a bunch of good news in the earnings announcement and the share price has responded accordingly. Disclosure: Comment poster holds FXJ shares
ReplyDeleteIn regards to Paul's comment I would like to make it clear that I am not forcasting a apocalyptic end to print journalism. Papers are still making profits, media moguls just need to adjust to the smaller profit margins than they were previously used to.
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