Home ANTHILL TV Should Fairfax give away 100,000 iPads and axe their print editions?

Should Fairfax give away 100,000 iPads and axe their print editions? [ANALYST RECOMMENDATION]


It’s no secret that the newspaper industry is still struggling to find a sustainable model that works in a digitised world.

The goods news is that the paralysing paranoia seems to be diminishing (news is not in trouble — just print) now that the iPad has given the technically illiterate PTBs (powers that be) an alternative that they can hold in their ink-stained hands and genuinely comprehend (unlike the wild and untamed interwebs).

A report prepared by Macquarie, commissioned by Fairfax chief executive Brian McCarthy, which Macquarie expects to be released in conjunction with its 2010 results, has produced a startling analysis coupled with an equally surprising recommendation.

According to an article in The Australian:

Fairfax Media should axe its Melbourne and Sydney daily print editions and focus on e-readers and online to boost earnings.

The report found that “dropping print editions of The Sydney Morning Herald and The Age and delivering content via e-readers such as Apple’s iPad could boost earnings from the two papers to $55m — $5m more than the bank’s 2010 forecast… [Macquarie] analyst Alex Pollak also suggests Fairfax could get the ball rolling by spending about $50m to give away 100,000 e-readers to seed the migration of readers away from print.”

This news came only days after Rupert Murdoch voiced his support for The Times of London’s’ decision to ‘put up the paywall’ last month. At a new media forum held by The Australian in Sydney on Monday, Murdoch said tablet or slate computers were “a perfect platform for our content” and pay walls were part of the evolution.

“We are rolling out a paid content strategy across our newspaper websites,” Murdoch said. “Already The Wall Street Journal is the largest of its kind in the world with 1.1 million paying subscribers online. The Times of London and The Sunday Times last month started charging for access to their websites. It’s going to be a success. Subscriber levels are strong.”

Does this mean free iPads for all? According to Pollak, in the report, “such a move is likely, but not in its entirety on day one — a seismic structural shift like this will take time for Fairfax to convince both advertisers and consumers alike of its merits.”

Rupert Murdoch defends paywalls

In this excerpt from an interview with Peter M. Robinson, a research fellow at the Hoover Institution, Murdoch talks about his vision for news and his feelings about the iPad.