The Mercury – Tasmania’s largest circulation newspaper – is in deep, deep trouble.
A leaked News Corporation Australia’s financial report from July 2013 provides a stark insight into the rapidly deteriorating finances of the Murdoch empire’s three Tasmanian newspapers: The Mercury, the Sunday Tasmanian and Tasmanian Country.
The 276-page Weekly Operating Statement – which was first published by Crikey back in late August – provided a detailed financial breakdown of all the company’s Australian newspapers and magazines for both the 2012 and 2013 financial years.
While the reporting at the time – such as by the Sydney Morning Herald, The Guardian and the online Adelaide-based website InDaily – focused on the losses incurred by the company’s national masthead The Australian and some of its other major mainland newspapers the details of the financial decline of News Corporation’s three Tasmanian papers was ignored.
The internal News Corporation report paints a bleak picture.
It revealed that in 2013 profits from the three publications fell by over 40% to just $9.4 million. The Mercury’s operating income – the profit left after all expenses and deprecation are accounted for – plummeted by $6.5 million in a year. The profitability of the Sunday Tasmanian declined only marginally.
Dark days for The Mercury
Underlying the declining fortunes of The Mercury is a combination of falling circulation and a rapid decline in advertising.
While The Mercury had a total income of over $37 million in 2012/13, sales of the newspaper accounted for just $10.1 million, a fall of $716,000 in a year.
Average daily sales of the paper over the year to June 2012 year were over 44,000 but over the next year they fell by 2700.
Nearly all the balance of the income came from advertising revenue. But the decline in advertising income is substantial. In just one year, advertising revenue fell by $4 million. The volume of ads – measured in column centimetres – fell by 8 per cent for both display advertising and classifieds. Unpaid advertising on the other hand more than doubled to just under 5 per cent.
While costs rose marginally, the bottom line impact on The Mercury from falling circulation and advertising was substantial: in just one year profitability fell from $14.2 million to just over $8 million.
The Sunday Tasmanian, which had income of just under $6.5 million in 2013, fared little better. It recorded profits of just $920,000, down 20% on the budget target. The factors affecting the Sunday Tasmanian mimicked those of its weekday sibling: falling circulation and advertising while most costs rose marginally.
The same pattern held true for Tasmanian Country, which had an income of $1.6 million in 2013. While smaller circulation than its Tasmanian siblings, it performed comparatively better, boasting a $470,000 profit. Over 2013 it performed better than budget even though display advertising revenue was down by 16 per cent.
Faced with declining profitability News Corporation Australia followed the predictable cost-cutting formula of slashing jobs. Across the three mastheads 21 jobs were cut, so that by July 2013 just 127 remained.
Since the end of June 2013, circulation has continued to fall.
Data from Audit Bureau of Circulation (ABC) – which is cited on News Corporation Australia’s website indicates that between June 2013 and September 2014 circulation fell from 41,403 to 35,408. (The ABC data has been adjusted to provide an average for Monday to Saturday sales to make it comparable to figures in the News Corporation Australia report.)
For both the weekday Mercury and the Saturday edition, the trends are stark.
Since the end of June 2013 sales of the weekday edition of The Mercury have dropped by 15 per cent (to 33,335) and the Saturday edition by a little over 14 per cent (to 45,774).
The Sunday Tasmanian’s circulation has fared little better, falling by well over 13 per cent over the same period. To stem the losses the sale price has been increased twice: an extra 20 cents per copy in July 2013 and an extra 30 cents in November this year.
Does the decline of Murdoch’s mastheads matter?
It would be easy to think that the financial decline of The Mercury and to a lesser extent The Sunday Tasmanian doesn’t much matter, but it does.
Newspapers – which have the greatest concentrations of journalists in the media landscape – overwhelmingly set the media agenda both in terms of the stories covered and how they are framed. Small newspapers follow the lead of the bigger mastheads and radio news bulletins routinely follow the lead from what is in newspapers.
As the circulation of The Mercury and the The Sunday Tasmanian have fallen in recent years, they have followed the familiar cost-cutting formula: cutting staff, reducing the number of pages and increasingly relying on cheap syndicated content from either wire services or nationally-produced News Corporation supplements. Marketing gimmicks to boost sales, such as free giveaway David Attenborough wildlife DVD’s, have proliferated.
Increasingly the front pages of The Mercury are dominated by up-beat photo stories. New development projects are routinely the subject of multi-page but one-dimensional spreads which are all too often illustrated with developer supplied PR images. It is coverage best characterised as a credulous boosterism dressed up as journalism.
What hard news is locally produced is commonly relegated to further back in the paper and frequently comprises articles of the ‘he said, she said’ variety. The subtext is clear: hard news puts readers off and should only grace the front page in exceptional circumstances.
As The Mercury retreats further and further from hard news journalism – let alone stories that take more than a few hours to research and write – the question remains what, if anything, will fill the vacuum?
The ABC’s Tasmanian news capacity continues to diminish as the recently announced Abbott Government cuts take their toll.
The 7:30 Report (and its predecessors) which were once critical agenda setters in Tasmanian politics: a nightly half-hour bulletin which broke big stories and grilled politicians. When it was gutted to become a national Monday to Thursday 7:30 Report with occasional Tasmanian stories and a far tamer magazine-style Stateline edition on Friday night, local political journalism took a big hit. Now even Stateline is gone and with it the bulk of longer form TV current affairs capacity in the state.
The trends affecting the News Corporation Australia’s Tasmanian publications are also eroding the capacity of Fairfax Media’s two local mastheads - the Advocate and The Examiner.
While the rise of the web has facilitated ready access to quality global news, the critical issue is whether the tide just keeps on receding when it comes to both the quantity and quality of local Tasmanian news that goes beyond happy-clapping boosterism.
While Tasmanian Times has an impact way beyond its size and budget, the gap between what is happening in Tasmania and what is reported is growing ever larger.
• Mark, in Comments: As was written in one of the sidebar sites: Out in the boonies the media is a rough deal. The reporters have an average age of 12. The editors are crusty and conflicted. And the money is running out. They report what they want to happen. Potential mines. Potential pulp mills. Potential farms. Potential developments. Potential money drops from Canberra. Potential Chinese buy-ups. News is all about crossing fingers. At best, 5% of the potential comes true. If you dig through old newspapers you’ll find stories about the same mines and the same “100’s of jobs” they were going to create. Five years ago. Ten years ago. Fifteen years ago. Convince people something’s around the corner and you might convince someone to advertise. You might keep your newspaper alive. Sadly, you don’t inform anyone of anything. http://www.idiottax.net/2014/11/my-abc.html
• Bob Burton, in Comments: … It is also worth pointing out that in the last five years, according to ABS population data, Hobart’s population increased by over 8,800 (2008 to 2012). In spite of this underlying population growth, readership of hard copies of The Mercury continues to fall. The trends affecting The Mercury aren’t unique to Tasmania. However, as the smallest state, Tasmania’s media may well be hollowed out so quickly that it becomes the exemplar of a failed media state. Sure, we will still have media which cover sport, car crashes, major court cases, some major events and some political debates initiated by existing parties but more probing journalism already largely seems to be a quaint thing of the past. Which is why the question on who will cover hard local news in Tasmania remains a critical question. Ironically, this topic is one which the existing outlets are wary of covering, perhaps because to do so would require an acknowledgement that there is a significant problem. Self-reflection tends not to be a strong point of most media outlets.