Industrial era journalism was a craft subsidised by the advertising. When advertising separated from the newspapers, the journalism lost its subsidy. Now, companies like Fairfax Media are seeking to put a market value on journalism itself. Good luck with that.
In her new book, 'Fairfax: The Rise and Fall', Colleen Ryan - a former editor of the Australian Financial Review - seeks to assemble (from obviously high level sources) the definitive account of Australia's oldest and most venerable media company.
The story traces the company from its beginnings in the 1840s in the then convict settlement of Sydney as a family-run publisher under John Fairfax; to its glory days in the mid-20th century under the founder's great grandson Sir Warwick; to the disastrous privatisation bid by Warwick Junior in the late 80s; to the years of mauling by merchant bankers and junk bond owners, and finally to, its long, slow demise in the digital era.
This is Ryan's second book on Fairfax. Her earlier work ('Corporate Criminals: The Taking of Fairfax'), was co-written with another former AFR editor Glenn Burge. That title focused on the fiendishly complex Tourang bid for Fairfax in the early 1990s, which involved a virtual Sopranos cast of Packers, Kennedys, Blacks, Turnbulls and other big swinging dicks of the era.
For this book, Ryan uses as a framing device the 2012 raid on a dying Fairfax by iron ore billionaire Gina Rinehart who is seeking to turn the once proudly independent mastheads into mouthpieces for her fringe political views. In the Rinehart raid, the author sees an echo of the vainglorious tilt at the publisher a quarter century before by young Warwick, another spoilt and indulged scion who felt cheated out of his inheritance and wanted to prove something to a dead father.
The most compelling chapter is the final one, on the ongoing bid by current Fairfax CEO Greg Hywood to build something new out of the ashes of the terminal print businesses. This is a company whose share price has fallen from above $6 to as low as 38c in late 2012. As a comparison, online employment company Seek, a start-up which then Fairfax CEO Fred Hilmer could have snapped up for a song more than a decade ago, now has a market cap two and a half times that of Fairfax.
In the meantime, the lifeblood of the institution - if not the business - has been the journalism. Ryan writes of the flood of tears that ensued last year when the company axed 20 per cent of its staff, including some of the most respected and experienced names in journalism.
"Despite having cut loose one in every five journalists at Fairfax, Hywood maintains that journalism is the future of the company," Ryan writes. "It is now the business, whereas in the past, the real business was the classifieds - jobs, homes and cars. Journalism may have dominated the culture, but the company made its money from the classifieds."And there's the rub. As Fairfax moves this month to the New York Times-inspired 'freemium' model (in which readers only to start to pay a subscription once they pass a certain amount of free stories each month), the big question is what sort of journalism this more meagre income can sustain. More critically for the company's survival, how much longer will institutional shareholders, having lost so much money on Fairfax, give Hywood to turn the now much smaller ship around?
On that score, Ryan writes of a frank assessment of Fairfax's prospects by the South African-born fund manager Simon Marais, one of the company's biggest investors.
"As far as Marais is concerned, a listed company is a business that operates for shareholders, not for anyone else. He sympathises with the notion that an independent quality press is important for democracy, for government accountability, but concludes that the Australian public simply refuses to pay for it. Marais has worked out that it would cost less than three cups of coffee a year per head for the entire Australian population to ensure the viability of Fairfax. But he says no-one will do it, and that is not his problem. He doesn't think it's the Fairfax's board's problem either."Perhaps Marais is right. Perhaps, the days of large, publicly listed media corporations that subsidise journalism under the umbrella of advertising are over. Look at News Corporation. It just split itself into two, essentially telling founder Rupert Murdoch that his legacy, loss-making, publishing assets will have to make their own way in the world from now on.
My feeling is if enough of us are concerned about the maintenance of quality, investigative, accountability-style journalism, we would be better off digging into our pockets, sacrificing those three cups of coffee and directly subsidising a non-commercial enterprise that fosters this important work in the interests of democracy.
If the legacy media is dead, perhaps it's time we built a new one.
'Fairfax: The Rise and Fall', Colleen Ryan, Melbourne University Publishing, 2013
See also: Eric Beecher: 'The Death of Fairfax and the End of Newspapers' - The Monthly