‘Plan B’: Ross Gittins on the future of broadsheet journalism

Last week, Fairfax announced plans to cut one quarter of the editorial workforce, signalling that the future of the Age and the Sydney Morning Herald is in peril. The Australian, meanwhile, hasn't been profitable since 2008. Are Australia's broadsheet publications on the verge of collapse?

In an edited extract from his October 2015 New News lecture, Sydney Morning Herald economics editor Ross Gittins argues that the willingness of Fairfax and News Corp to embrace a different kind of journalism will determine whether or not they survive.

'Deflated Sydney Morning Herald', by Alex Steffler (CC BY-NC 2.0)

Stakes of survival

In the last five years of my career as a journalist, I have become greatly exercised by the challenge that the digital revolution presents to the continued existence of quality journalism.

Ross Gittins on the future of broadsheet journalism

In the keynote address for the 2015 New News conference, Ross Gittins argued that legacy media must embrace a different kind of journalism. Listen to his speech in full.

I'm not sure how the traditional tabloid papers will survive, but I'm more concerned about the Sydney Morning Herald and the Age, the two papers that I work for, as well as the Financial Review and the Australian

The Age building on Spencer Street, by Indigo Skies Photography (CC BY-NC-ND 2.0)

There are two issues of concern: first, finding a future for the occupation of journalists in the digital world, and second, ensuring the news media continues to fulfil its higher purpose of reporting important information about our society that otherwise wouldn't be brought to many people’s attention, which helps to hold governments to account. It's the news media's higher purpose – rare, and maybe even unique among profit-making industries – that makes its survival a matter of great importance for the community.

One thing I don't fear is that the public could ever lose its interest in news. Humans are curious, pattern-seeking, threat-searching and intensely social animals, so an insatiable desire to know the latest news – and to know it as soon as it happens – is hard-wired in us. I don't doubt that news will survive in the digital age, but that's not the same as saying the present legacy providers of news are bound to survive, particularly those formerly oriented to providing the news on dead trees. 

How do you get lots of clicks? Perhaps surprisingly, not so much by resorting to clickbait or churn, but by reverting to the breaking news business. You focus on reporting the big stories of the day, getting them onto the site and the apps as soon as possible

A knowledge of previous waves of technological change in any industry makes it easy to believe that the place of the old, huge, lumbering, incumbent suppliers will be taken by new, smaller, more flexible and more innovative suppliers in the changed market for news. That would be bad news for all those journalists presently employed by the legacy news outlet, but not necessarily for the consumers of news, or for journalism's fulfilment of its higher purpose.

In all this, I don't want to be seen as implying that the digital disruption of the news media is a bad thing. I have no doubt that like most widely adopted technological advances, it brings considerable benefits to users. To take one simple example, the move of classified advertising from broadsheet newspapers to the internet has hugely improved the quality and flexibility of classified ads, while also hugely reducing its cost to people taking out ads. It’s a bit hard to say that’s all a bad thing. The problem is that this difference in the price of classifieds is what used to be used to pay the wages of journalists on broadsheet newspapers.

Following the money

To the legacy newspapers, the challenge of the digital revolution comes on two interrelated levels: one is the shift in readers from newspapers to various online platforms, while the other is the shift of classified and display advertising from newspapers to online platforms. The newspaper’s online platforms have captured only a small part of the shifted advertising, with much of it going to the search engines and social media sites – and in any case, the prices we receive for digital advertising are very much lower, exceptionally so for ads on mobile phones. 

So the key question is, ‘What do we have to do to greatly increase digital revenues?’ What changes do we have to make not just to our digital platforms, but to our journalism, to get our revenues up to where they’ll soon need to be? One approach would be to focus most of our effort on increasing our advertising revenue, while collecting whatever subscription revenue comes our way. An alternative approach would be to focus most effort on increasing our digital subscription revenue, while being more targeted in our efforts to attract advertising revenue.

We haven't been in the breaking news business for a long, long time. But now we're back in that business

I call the first approach ‘Plan A’, because it's close to the approach Fairfax is pursuing at present. The alternative approach is ‘Plan B’, because it's the one I believe we will have to turn to if ‘Plan A’ can’t be made to work.

‘Plan A’ is the approach most likely to instinctively appeal to journalists, because on the surface it seems to involve no fundamental change in newsgathering as we've always done it. Indeed, it actually involves a return to journalism as it used to be practiced.

Breaking news

Since we've become digitally focused, Fairfax has got heavily into breaking news. As soon as something happens, we get it on the website, as fast as possible.

If you think about it, morning newspapers haven't actually been in the breaking news business since the ABC started running news bulletins – most of the news that you read in the morning newspaper, you would have already heard about on the radio or the TV news. So we haven't been in the breaking news business for a long, long time. But now we're back in that business.

From a commercial perspective, ‘Plan A’ involves maximising what critics call ‘clicks’, but digital editors prefer to call ‘page impressions’. It's believed that what digital advertisers want is reach – the biggest audience possible – and their preferred measure of this is the monthly total of unique browsers. How do you get lots of clicks? Perhaps surprisingly, not so much by resorting to clickbait or churn, but by reverting to the breaking news business. You focus on reporting the big stories of the day, getting them onto the site and the apps as soon as possible, and then you improve your offering with sidebar stories, pictures, graphics, video and commentary, as soon as you can get it organised. It's all about getting it out there as fast as possible.

For the most part, your competitors are offering essentially the same stories you are, but you hope that your timeliness, and the quality of your reporting and photos and videos, combined with the reputation of your masthead, will win you more clicks than the others.

As digital readers’ daily habits change over, so does the need to continuously update our platforms. When we were getting most of our digital traffic on the site, it happened between nine to five – the big peak was at lunchtime. But the trend toward people using their mobile phones means we get a big surge in the morning when everybody is on public transport making their way to work, and then again in the afternoon. As this changes, we need to update our platforms more often and at different times. We haven’t quite got to the point where they’re updated 24/7, but we’re getting closer, with journos now working early and late shifts, and more effort being made to respond to the recent surge we've now discovered in Sunday browsing.

All this says is there’s more change in the way we package news than in the stories and topic areas that we cover. We still try and chase every story we believe our readers will find newsworthy. So I think most journalists and editors remain reasonably comfortable with this response to the digital challenge. 

The rough end of the click

Journalists like to compete with each other and they're attracted to the simple, objective, numerical and frequent measurement of their success, provided by the click count. It’s beautiful. I’m in the bean-counting business and I can tell a popular bean-count when I see one. It's simple, one number: you can tell whether it's bigger or smaller than last time very easily. Measuring the number of clicks is objective. It's not an opinion. It's a number, and it's very frequent. When you enjoy competing, as all journalists do, this is very attractive stuff.

Click are the closest the digital world provides to the old newspaper world’s ultimate measure of journalistic success: circulation.  It seems to replicate the old bargain between journalists and management. Our contribution to the company's commercial success is to maximise circulation. You want to put pressure on us to maximise circulation? Fine. You want to sack an editor who couldn't get circulation up? Fine.

But how you convert that circulation into revenue is up to you, and none of our business. A journalist’s commercial commitment stops at that number. And we’ve replicated that in the digital era, except that it now stops at clicks instead circulation. How do you turn clicks into money? That's not our department. That's your job – you're the manager.

That’s ‘Plan A’. But I have worries about it on two levels.

First, I'm not sure it's sufficient to secure our future financially. It's not clear to me that simply maximising clicks will gain all the revenue we need to more than cover the costs of our news gathering effort. Too much of the advertising revenue in the digital world is captured by two giants – Facebook and Google – and not much is left for all the people who actually generate the news. 

And advertising rates seem sure to shrink rather than fatten as users move to getting most of their news via mobile phones. Further, I find it hard to believe that reaching maximum eyeballs is the most advertisers want from us , much less the most valuable thing the quality news media are capable of offering to advertisers. My guess is that advertisers and ad agencies are just as much at sea in the digitally disrupted world as the former newspaper companies are. 

If advertisers aren’t capable of seeing that we’re capable of offering them something more valuable than mere ‘reach’, we should be doing more to educate them. We should be developing and promoting metrics that better demonstrate what we've got to offer to advertisers, rather than letting advertisers dictate to us what metrics matter most.

‘Plan A’ doesn't sufficiently leverage the serious news provider’s brand, reputation and following. Presumably, we’re hoping our reputation for trustworthiness will bring us more clicks than go to the former tabloid papers or to the digital upstarts. But is this the best we can do? In the old world, the readership of the serious press came predominantly from the best-educated and most highly-paid part of the market – known to advertisers as the ‘ABs’, as opposed to the ‘CDs’.

Broadsheet circulations were always smaller than those of the tabloids, but our charges for ads were always higher because of our clientele’s greater buying power. We got the ads for David Jones and Myer, while they got the ads for the weekly specials at Coles and Woolies. If you look at newspaper ads, you [still] see a very clear class divide. 

It’s hard to see how aiming to maximise clicks by beating our competitors on all the big breaking stories of the day leaves much room or resources for proactive, self-initiated reporting. It doesn’t leave much room for investigative reporting, or for scoops that tell Australians things they wouldn't otherwise find out about how they are being governed.

Can it be true that upmarket advertisers are unwilling to pay a premium to advertise on upmarket digital news platforms? Alternatively, is it true that in our effort simply to maximise clicks from all comers, our clicks have become worth little more to advertisers than the tabloids’ sites clicks? Another advantage of attracting an ‘AB’ audience is that these people are predominantly able to afford a digital subscription, should they judge the service we offer to be of sufficient value to them. But if we're simply trying to maximise clicks by offering breaking news that’s faster than all of our many competitors, why would this be something people would be willing to pay for?

Gun for higher

This question brings me to my second worry about ‘Plan A’: will it lead us to adequately discharge journalism’s higher purpose, a purpose that not only contributes to the quality of the nation's governance, but also provides serious journalists with much of the job satisfaction?

Editors committed to the ‘Plan A’ business model may deny it, but it’s hard to see how aiming to maximise clicks by beating our competitors on all the big breaking stories of the day leaves much room or resources for proactive, self-initiated reporting. It doesn’t leave much room for investigative reporting, or for scoops that tell Australians things they wouldn't otherwise find out about how they are being governed. It doesn’t even leave room for news that falls under the ‘important but not terribly exciting’ category, including health, welfare, public policy, international affairs, arts, culture and ideas. A lot of those things aren’t all that exciting – they don’t get all that many clicks.

Putting the great bulk of our resources into fabulous coverage of the great excitements of the day puts too much of what we do into the lap of chance occurrence and the efforts of governments and state interests to use the media for their own ends. If you just sit there and wait for it, there are people very happy to supply you with stories – stories that achieve their objective but don’t necessarily serve your readers very well.

‘Plan A’ doesn't leave much room for anything but the most immediate, top of the head comment and analysis. It favours the emotional assertion of strong opinions, not the careful weighing of pros and of cons. It leaves little room for mature reflection – for the ‘how’ and ‘why’, as well as the ‘who’, ‘what’, ‘where’ and ‘when’. It feeds ever-shortening attention spans, leaving too many news stories only partially digested. We end up never quite getting to the bottom of things.

Putting the great bulk of our resources into fabulous coverage of the great excitements of the day puts too much of what we do into the lap of chance occurrence and the efforts of governments and state interests to use the media for their own ends.

Playing to strength

So what is the alternative approach, that offers legacy serious newspapers a better chance of commercial survival and continued discharge of their higher purpose. What's ‘Plan B’? 

‘Plan B’ starts by accepting that the digital revolution is leading to the commodification of the news task. A basic news service is now available from any number of sources. It's all much the same and it's almost always free. In fact, it's so freely available that you can’t charge for it, nor can you expect that by being a little bit better than all the others, you'll attract a disproportionate share of the eyeballs and the advertising revenue.

‘Plan B’ accepts that once the present period of multiplying news sites gives way to a period of consolidation, as most platforms run out of money, the journalistic task will divide into two: a smaller number of journalists producing the basic breaking news, working mainly for wire services and the ABC, plus a smaller number of journalists working for outlets that specialise in adding value to the commodified news produced by others. That is the big change that I envisage: people who produce the basic commodity become different from the people who add value to the basic commodity.

This other category of news outlet adds value by using more experienced and more specialised journalists to add background and analysis. Value-adding makes news less incremental. In other words, we don't just tell you about the bit that changed today, we tell you about the story so far and how what happened today fits into the broader story. Rather than adding to the confusion, it seeks to dispel confusion. 

It limits its value-adding to a narrow range of topics, giving greater emphasis to reporting what I call ‘local news’, which is city and state politics, transport. health and education – the things that are peculiar to Melbourne and Victoria, because when you think about it, how many sites are going to be out-performing you on local issues? Local is the last monopoly – it’s the last area where we have an advantage over the New York Times and the Guardian

The value-adding approach pursues exclusive stories and investigative reporting. It highlights the contribution of its big name columnists, using them to attract loyal readers. Commercially, it focuses most on revenue from subscriptions. When you think about all these value added components, that’s the stuff that you might be able to persuade people to pay for, the stuff they can’t get free somewhere else.

Commercially it focuses most on revenue from subscriptions, while adding high-end ad revenue attracted by the ‘AB’ audience. 

The gated access to value-added exclusives, investigations and name-brand columnists gives people sufficient reason to buy a subscription, and the value-adding is what does most to continue the news media's discharge of its higher purpose.

If I'm right in believing ‘Plan A’ is unsustainable, leading to continued rounds of redundancies, it will only be a matter of time before the legacy providers of serious news gravitate to ‘Plan B’ – provided, of course, they don’t run out of money or damage their brands too badly before they complete the transition.

Should they fail, however, I don’t doubt that various new, unencumbered and enterprising digital platforms will arise to fill the need that they left unmet. We won't have to destroy journalism in order to save it, but I fear we will have to challenge the way it's practiced more radically than we have so far.

Portrait of Ross Gittins

Ross Gittins is the economics editor of Sydney Morning Herald and an economic columnist for the Age. He is a winner of the Citibank Pan Asia award for excellence in financial journalism and has been a Nuffield Press fellow at Wolfson College, Cambridge, and a journalist-in-residence at the Department of Economics at the University of Melbourne.

Ross is frequently called upon to comment on the economic issues of the day and has written and contributed to many books and periodicals. His books include Gittins' Gospel, Gittinomics and The Happy Economist.

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