Friday, May 11, 2007

Fairfax considers pay-per-view

In this week's B&T Pippa Leary, Fairfax Digital’s director of news and information says Fairfax would move to a user-pays system "in a flash" to reduce the company’s dependence on classified advertising if the appropriate unique content could be found.

"At this point in time when we look at our current online set, we don’t see anything that is unique. But that said, if we were to bundle certain information together, we may be able to create an offering that people would be willing to pay for, we are constantly looking at and testing that concept," Leary says .

This is an interesting admission that reveals a number of the structural problems, in organisational terms, Fairfax Digital suffers from at the moment. And despite an apparently strong commercial position those problems are inhibiting Fairfax Digital's ability to really address the challenges they face in the longer term.

As Director of news and information Leary is responsible for content. She is a very smart operator but she doesn't have an editorial background, and that's part of the problem. She was responsible for bringing the discipline of the ninemsn product development strategy to (then) f2's commercial team which was a significant achievement and led to her being promoted from running the product development team to effectively managing the market facing strategy of the two major sites (plus Brisbane).

This is consistent with Fairfax Digital's view that the newspapers are the content engines for the web sites so uniquely produced online material really only needs to be marginal in volume. The majority of material comes from the papers and is shovelled on to the web sites by the online editorial teams at and

Despite making some noise about the few dedicated online reporters Fairfax Digital has painted itself into a bit of a corner here. By sidelining editorial input, and focusing heavily on commercialising newspaper content at the expense of creating online environments that are adapting to and evolving with the new digital space, they are fast approaching a showdown with the newspapers over who actually "owns" the masthead web sites.

It's worth remembering that Fairfax Digital is a separate company from Fairfax Media. What that means in practice is that the web sites of The Age and the Sydney Morning Herald are not the responsibilities of Andrew Jaspan and Alan Oakley but rather of Pippa Leary. The fact is that the online teams under Simon Johanson at and (until recently) David Higgins at are proud of their associations and work hard to maintain good relationships with their print colleagues. But when push comes to shove it's Pippa who has the final say.

So her statement above, about not seeing anything unique in "our current online set", is really an admission that the strategy of separation - of print and online - is not working. Right now Fairfax's approach is to tell print journalists that they have to "adapt or die", give them a few gadgets and a couple of days training and tell them about the wonderful integrated newsroom they'll soon be working in.

However, the ongoing separation of the two businesses - print and digital - means that the newspaper journalists have every reason to stay suspicious about the way their efforts will be treated online.

When the Director of news and information at Fairfax Digital is betting on bundling certain information together "to create an offering that people would be willing to pay for" you can be sure those supplying the information will be sensitive to how that bundling process is being handled, particularly if they're told there's nothing unique about their material.

If, on the other hand, the editors of the newspapers were given full responsibility for their masthead sites - notwithstanding the economies inherent in shared technology and other resources - then the print staff could reasonably be expected to take a more positive view about their own activities online.

Structural remedy needed

Since the late nineties Fairfax has more or less copied the in all things digital. For a while that was OK as was clearly one of the early leaders in online news. But ever since the failed registration strategy at and - based, as it was, on the successful registration format - it's been clear that simply aping your favourite US newspaper site is not a long term option.

As far as organisational structure goes, even the New York Times has adapted to new imperatives. In 2005 they rolled the former New York Times Digital business into the New York Times company rather than keeping them as two separate businesses.

The lesson is that the fanciest, most high tech integrated newsroom is not enough on its own. The company's organisational structure needs to reflect the mantra of "integration" in a comprehensive way that encourages staff to feel an ownership and attachment to the digital products in the same way they do to the print product.

But there's one other missing element here. Leary's statement to B&T is focused very much on static content, packaging that content and selling it. In other words trying to attract specific demographic groups to traditionally produced material and wrapping advertising around it.

What's missing is community. Where is the vision at Fairfax Digital for new modes of publishing? Why are we just hearing about re-packaging content and charging users, as if this was the smartest way to grow an online business?

I don't suggest that Fairfax should give up serious journalism, but while some people may read Pippa Leary's search for unique content in order to charge readers for access as an implied need for investment in journalism and journalists, I think it just illustrates the failure of imagination and leadership at Fairfax Digital.

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