Growing an audience is generally a good way to make money, at least in the world of apps and new media platforms. And Tong says “you can’t get away from the fact that we’ve got the audience”.
“If you’re an advertiser in digital today in New Zealand, you should be talking to us, if you’re not, you’re missing out. That’s our view … Digital is the place to be and that’s where we are. We think we have the platform that allows us to be competitive in this market. We don’t expect us to be able to do this alone. Print’s great, digital’s awesome, so I’m encouraging the team to look at it from the customer’s perspective and put deals together and we’ll get what we’re due out of that. If you think about it from a customer POV, what I don’t like is when people will deliberately obstruct an outcome to try and sell something. It will come back and bite you in the backside.”
So as Fairfax battles against the likes of NZME and MediaWorks, which are both backing a converged media strategy, is the fact that Fairfax comes from a history of print journalism a weakness?
“In a perfect world I’d have all of the channels, but you need a realistic view. Sometimes we will be all they need, sometimes we will be part of a schedule, but we should just be good to deal with.”
And at the MPA conference he was very clear about his desire to collaborate with other local media outlets. As he said, in the banking industry, cartel was a good word. In keeping with this goal, Fairfax and NZME decided to share printing facilities last year. And he says it has recently done a deal with MediaWorks.
So does he feel there’s been a bit of dancing on graves with regard to the coverage of the restructure?
“I don’t worry about it too much to be honest. We’re getting on with what we’re doing. You’d be surprised how many people don’t care about media reporting on media. And it makes no sense when the real threats to our existence are on the other side of the globe.”
Recently, The New York Times conducted an experiment and switched off access to the desktop version of the site for staff so they got to experience what it’s like for readers (more than half access the site via mobile).
Tong says it’s not having to do anything like that. "They’re going there themselves" and mobile (which also makes up 50 percent of its audience), social and video have been major focuses for 12 months.
“Unfortunate weather drives people to mobile and if their experience is good, they tend to stay. Digital is a misnomer. Your behaviour with the phone vs the tablet at home is different.”
“You want to be on the mobile team. You don’t want to be on the desktop team,” he says.
Stuff’s mobile app is the most popular news app in the country, and he says its next version, which is currently in beta mode, will be very visual and socially driven.
So while there are questions about shifting resource from a loyal subscriber base to focus on digital, there are more questions about focusing on social traffic that is notoriously fickle.
“We know there’s a chunk of our audience who are effectively disloyal, and social audience is like that. It’s up to us to prove there’s a reason to stay. It could be content, it could be how fast the site loads, it could be anything. Whether or not we can make a dollar depends on if we’re good enough.”
But those dollars are not likely to come from a paywall.
“I think you only have to look at the moves by Facebook and Apple. The idea of a local paywall in my personal opinion is never going to work. The internet is egalitarian by nature. You’ve got to find other ways to engage the audience and make money.”
As proof of this, he says The Toronto Star has pulled its paywall down and The Sun in the UK is set to do the same.
“Why? Because they’re missing out on audience on sharing across social and they’ve realised it’s impacting their brand. Having audience on its own doesn’t mean you’ve guaranteed success, but at least it gives you options … To be honest, we’re a good news organisation here in New Zealand but as an outsider coming in, I just wouldn’t pay. There are too many ways to not pay for it online. And I think people go out of their way to do that … The maths are difficult if you do the traditional thing and you give a digital sub away with a paper. Some will be tricky enough to get round it, and the rest would go 'stuff you I’m not coming back'. So we’ve said let’s be as appealing as we can and meet the audience need, get some scale, and then do we have enough people in the area of interest and then find out what they would be willing to pay for.”
He says people keep telling him that it won’t be able to create anything that people will pay for.
“But that’s our challenge with our content and our developments.”
Stuff has also found success with Stuff Nation, its crowd-sourced content play/membership scheme. It has around 300,000 members and, if the content is good enough, those stories can run on the front page of the site. In fact, a story from Stuff Nation was picked up by the Sydney Morning Herald and run prominently on its website. They were slightly alarmed to find out that it wasn’t written by a journalist. But as the rise of blogging has shown, journalists don’t have dominion on writing.
As well as experimenting with new ways to tell stories (like Lost Plane or Bodies for Profit) and distribute content (like through WhatsApp) it’s also experimenting with new ways to make money, with an auction platform called Getstuff launched to see whether the audience will buy from it.
Fairfax Magazines is also part of the portfolio, but, as magazines have been less affected, that division hasn’t been subjected to as much change as the news business.
“You’ve got to be doing what’s right for the region and doing what’s right where Kiwis come together … So, for The Cut, what we try to do with them is say they don’t just play golf, they probably do some other things too. So how about we look at that and see where we can engage them, and what part of the country they live in.”
So what does Tong see happening to the media business ten years from now?
“I think it’s genuinely difficult to predict given what’s going on at the moment. 18 months ago the music streaming industry was seen as a pawn between what was going on between Google and Apple. And news and content feels to me it’s the same way. Apple News, Google News, Facebook Instant Articles, it feels there’s dramatic change to come. The only thing to do is to stick to our knitting and be the ones who are the closest to the community and telling their stories, engaging an audience and someone else’s audience as well, and from there think about what our business model is behind it. There’s an argument to say the media business of the future won’t be an advertising–based model.”
Overseas, some interesting models are popping up, such as Blendle, which aims to be the iTunes of news. And, interestingly, long-form stories tend to perform well.
He says changing the frequency of newspapers is a question you need to ask paper by paper and community by community.
“You look at the diversity of the Auckland market vs. Wellington and they’re very different. We won’t be afraid to make those decisions when they’re necessary. We don’t focus on the masthead as the be all and end all. That’s the big change here. We focus on the audience that exists within a region or area of interest. There might be a time we say we can’t keep producing this newspaper every day because you’ve abandoned it. It’s happened overseas.”
He says you could paint quite a dark picture about how many New Zealand journalists will be here in ten years. But the crux of its News Rewired programme is to create a wagonwheel around its audience. While some questioned the sale of TradeMe, it was a good return for Fairfax and it paid off some debt. And Tong says it’s also cleared the way to invest more into Stuff, which played second fiddle to its main money-maker.
TradeMe showed that owning a network, rather than physical infrastructure was a good strategy and, with the likes of Airbnb now more valuable than Hilton and big prices paid for the likes of Instagram and WhatsApp, its 22.5 percent investment in Neighbourly, which currently has 135,000 users, is another example of that.
“Neighbourly is flying along. They connect people up in communities. We’re not selling ads. The sponsors are using it to meet their obligations under corporate social responsibility. We’re really careful with that. It’s a key, the base premise of it is trust and relevance to the community we’re in. It’s a digital version of what our community papers have provided for years: hyperlocal news. What’s happening on your streets. You can ask the neighbour if they know a good plumber. And it’s grown at such a rate shows you that it’s required and wanted.”
He says a suburban Auckland paper with a presence in Neighbourly would logically fit with what the paper is already doing.
“I think the community papers will continue to exist. I think that model is the one that makes the most sense in terms of longevity of stories and hyperlocal. But you need to complement it with a digital option for people who don’t read newspapers. Neighbourly is doing that. That’s why we saw the opportunity. It just works. Stuff on the other hand is a bit of a behemoth so it’s hard to surface those hyperlocal stories for people.”
He says it’s getting better and better as far as personalization via location goes, but he’s always harboured a few concerns over whether it can nail that suburb by suburb stuff.
“That doesn’t mean all the stories would be coming from Fairfax either. Will they be the only stories they’re interested in? I think not.”
But he says one thing is clear: people will want their stories told.
“But what’s the model in ten years given what these big behemoths are doing? People who spend time thinking about these things have come to understand that if we don’t pay somewhere along the line, there isn’t going to be any journalism.”
Now we wait for the digital-first philosophy to reach the front desk of its head office in Auckland where, despite being surrounded by digital screens showing the latest headlines from Stuff, you’ve still got to sign in using good old fashioned pen and paper. How quaint.