Its Sydney Morning Herald and The Age broadsheet newspapers will become tabloids, and their websites will introduce digital subscriptions from the first quarter of 2013. It will also close two Australian printing facilities (at Chullora and Tullamarine) by June 2014. The changes are part of its 'Fairfax of the Future' strategy, in response to a rapidly deteriorating local media industry, and reflecting a shift in readership toward digital mediums. Around 65% of all SMH and The Age readers now access the publications digitally.
"Readers' behaviours have changed and will not change back," CEO Greg Hywood says. "We're taking decisive actions to fundamentally change the way we do business. The package of strategic initiatives is bold, and several are difficult, particularly as they will impact on some of our people, however, we believe they're in the best interests of Fairfax, our shareholders, and ultimately the majority of our people." Fairfax shares rose nearly 5% on the news.
Meanwhile here in NZ yesterday, the stock market halted trading in shares of online auction site Trade Me (majority-owned by Fairfax) while Fairfax sold off 15% to an investment bank, reducing its stake to 51%. To me, that sale is curious, given that although Fairfax retains a controlling stake, it makes more sense to control more of the revenue it can in a growing business. It indicates just how tough life is for Fairfax right now.
Will this mean, in the long-term, completely digital formats? It's certainly a concept that Rupert Murdoch has been working towards with his papers for several years...