TRANSCRIPT OF THE HON. MALCOLM TURNBULL MP
INTERVIEW WITH LYNDAL CURTIS
ABC NEWS 24
Subjects: Fairfax strike; Telstra
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LYNDAL CURTIS:
Malcolm Turnbull welcome to News24. Fairfax is sending sub-editing jobs offshore, journalists are on a strike, there’s speculation News Limited is going to cut hundreds of jobs. Do newspapers in Australia have a long term future or are they just struggling to find where that future will be?
MALCOLM TURNBULL:
I think it’s the latter. The management of Fairfax is like, well Greg Hywood for example, the Chief Executive, it’s like a man trying to jump from one speeding train onto another and not fall down the middle. His print business is in serious decline, his problem is not circulation decline, that’s very important to understand that. His problem is that the revenue base, in particular the classified revenue base is diminished if not gone.
LYNDAL CURTIS:
These were always called the rivers of gold, where the newspapers had effectively a monopoly over classifieds ads and people had to buy the paper to get the classifieds.
MALCOLM TURNBULL:
Correct, and the problem that he’s got is not you know drops in circulation, there are more people reading the writings of Fairfax journalists, of indeed any print journalists in Australia, than ever before because they’re reading them online as well. So the reach of their journalism has never been greater. But what’s happened is that the revenue base has collapsed.
Now what they’ve got to do is, what they need to do, is to transition from the printed world to the digital world, but they have to find a way to monetise, to generate revenue in that digital world because what’s been happening, and this is what the American newspaper people say is we’re exchanging print dollars for digital dimes. And part of that is simply because it is so much more competitive. The functionality, the convenience of being able to search for a house, or a car, or a job online is so much greater than being able to look at a newspaper. Inevitably classifieds have all moved into the online world.
LYNDAL CURTIS:
And there are many more people doing that work online, and doing it quite cheaply.
MALCOLM TURNBULL:
Well that’s right, you’ve gone, you can get a better reach for a $50 ad on an online search site, you know classifieds site, than you could for an ad that might have cost you $20,000 in a newspaper. And it doesn’t, it’s been a transformation so the problem they’ve got is how to they monetise that content in a digital world. They’re trying to make that change from one platform to another, and live through the process. You know can they survive the surgery? That’s really the question.
LYNDAL CURTIS:
And is it a way of trying to get people to pay for the journalism and get enough money out of that when you’re not getting the revenue you used to get from the classifieds?
MALCOLM TURNBULL:
That’s right. Well the circulation revenue for newspapers was always, was not token revenue but it was always a very small part of the revenue, they made their money out of the advertising. Now in the digital world because the revenues, the advertising revenues, have not grown to the level that people would expect or would like, increasingly newspapers are looking at getting, at being paid for the content. Now Fairfax hasn’t moved down that track yet but there are a lot of newspapers that have.
The ones that have been most successful have been the financial newspapers where you’ve got a business readership that is used to paying for information, you know whether it is to Bloomberg or Reuters or any number of providers, so the FT, Financial Times in London, Wall Street Journal in New York, have done pretty well in that space. The paper to watch is the New York Times which is obviously a national, international newspaper arguably, very high quality, and it is now charging for its online content and they’ve got over half a million subscribers now paying about thirty bucks a month for the digital edition.
Now that’s a long way from turning the New York Times Company into a bonanza, its share price decline has pretty much matched Fairfax’s by the way so they’re very comparable in terms of their problems. But again the question is if people will pay for the New York Times are they going to pay, what will they pay for the Sydney Morning Herald, or the Herald Sun, or the Telegraph and that is the challenge for them.
LYNDAL CURTIS:
If we can look out a few years do you think we will still have the same number of mastheads as we do now or will we see some shrinkage of that as companies try to merge staffs, perhaps merge mastheads, to strengthen the position of online.
MALCOLM TURNBULL:
Look I think there will be a reduction in mastheads. That’s been the experience everywhere. And of course that’s been going on for a very long time. Clearly they will have to keep on economising so the content of The Age and The Sydney Morning Herald, for example, the content of the Telegraph and the Courier Mail and the Herald Sun will all start to become more common. And they will be sharing more resources.
The real challenge is, when to you reach the point where it is actually cheaper – more cost effective – to actually turn off the print newspaper and simply go digital. Now one scenario that has been canvassed for big broadsheets – the New York Times is one, and people have talked about this with respect to The Age and the Sydney Morning Herald – is to say, alright we are going to be digital only Monday to Friday. And then Saturday, which is the big edition, we will keep that as a print edition. Now, will that work?
This is the challenge. I mean Hywood – and I’ve got a lot of sympathy for him – and all of these managers of these newspaper companies, are facing this extraordinary challenge. A new medium, a new platform – change at an extraordinary velocity. And can they transform their business before it dies? The surgery analogy is a good one. It’s like having a patient who knows that he will die if he does not have the surgery but then the question is: Can he survive the surgery? And there is the challenge for Fairfax.
LYNDAL CURTIS:
There’s also speculation again about Telstra taking up a role in media, whether it’s the Nine Network as is being speculated or perhaps buying into newspapers. Can you see a day when Telstra gets into the mainstream media business?
MALCOLM TURNBULL:
Oh absolutely. I think that increasingly, telecoms companies are moving more and more into content. Of course Telstra’s been doing that with its Bigpond site and, you know, other services – its movie services.
LYNDAL CURTIS:
Because that content helps drive uptake of their other products?
MALCOLM TURNBULL:
Correct, that’s right. The telecom package generally is what is called a triple play which is video services, what we might call pay TV – this is right around the world – broadband data, access to the internet and so forth, and voice. And of course if you can sell additional services – you know, cloud services. Software is a service through the cloud. All of those things can be bundled up. But the most important thing is content.
So Telstra has to become a content carrier. It does not want to be in the business of being a dumb pipe in the long term. And all the other telcos take the same view. Now the interesting thing about Telstra is that they own half of Foxtel. But they’ve never run it. And I think – and I don’t have any insight information here – but one of the things Telstra might be thinking as they look at Nine Network, is how do we develop a content culture? How do we turn ourselves from essentially being an engineering telecoms services business into a business that has a content management, content creation culture in it? And of course, they might think that one way of doing that is to buy a TV network. So it will be interesting to watch.
LYNDAL CURTIS:
It certainly will be. And that’s about all we have time for. Malcolm Turnbull thanks for your time.
MALCOLM TURNBULL:
Thankyou.
ENDS