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Issue #1776      May 10, 2017

Savage Fairfax sackings reflect big media changes

Last week staff of Fairfax Media went on strike for seven days over the company’s decision to sack 115 employees. As Sydney Morning Herald journalist Marcus Strom stated on ABC TV, the sackings were announced with very little notice, and staff had no opportunity to discuss alternative approaches or make preparations for finding other employment.

The immediate effect is that the quality of Fairfax news coverage is likely to deteriorate, because most of those given notice are journalists.

The sackings reflect big changes in the commercial mass media, particularly the arrival of digital news broadcasting. Fairfax has announced that it intends to cut editorial management, video, presentation and section writer positions. The company says the sackings are necessary because it needs to cut costs by $30 million, and that its revenue had fallen 6 percent in the first 17 weeks of this year.

There’s certainly no shortage of demand for Fairfax publications. The number of digital subscribers to The Sydney Morning Herald, The Age and The Financial Review now exceeds 226,000 and continues to grow.

The revenue from Fairfax real estate publication Domain has risen by 18 percent this financial year. However, overall revenue has fallen because more and more Fairfax customers are turning to its digital media news coverage, whose production costs are much lower than those of “hard copy” newspapers.

For the Fairfax Metro Media business, the digital and print audience has risen to 8.9 million, but revenue fell by 11 percent in the first 17 weeks of the year. Likewise, Fairfax regional publications audiences reached 3.7 million but revenue fell 11 percent, while Fairfax’s New Zealand Media now has an audience of 3.5 million but revenue there fell by 3 percent.

If these figures are a reliable guide Fairfax and other news publishers are likely to turn increasingly to digital publication, and if newspaper publication continues at all it will become a very small operation catering for a “niche” market of customers willing to pay far higher prices than at present.

But that alone is not sufficient to explain the sackings, because even a digital publication needs journalists to write its articles. The most probable reason for the sackings is that Fairfax management is preparing to use to an ever-increasing degree digital applications which provide journalists with standard copy, thereby allowing the corporation to cut the number of journalists it employs.

The slashing of positions will occur in other professions as well, including engineering, the law and accountancy, where professional digital applications are appearing or are already in use.

The big media shake-up

Much of the reason for the financial problems of Australian commercial broadcasters lies in the availability of alternative digital media outlets such as ABC iView, SBS On Demand and Skynews, as well as viewer competition from other commercial TV channels and the ABC.

Channel 10’s recently-declared $232 million loss may account for the government’s decision to replace current licence fees for TV free-to-air broadcasters, which earn the government $130 million, with a system of “spectrum” fees for digital as well as free-to-air broadcasters, which will bring the government a mere $40 million annually.

In the same week that the government stripped more than $27 billion from school funding, federal Minister for Communications Mitch Fifield made no secret of where his sympathies lie. He declared that the government’s intention was to ensure that commercial TV is “stronger and more viable”, even if that meant. a loss of $90 million in licence fees for the government and taxpayers.

And now even more change is underway, because the Fairfax sackings have made it an attractive target for takeover bids. US private equity group TPG is in pre-bid discussions with Fairfax management. If it makes a bid, and it almost certainly will, it will have a good chance of success.

TPG proposes to split up the Fairfax business into separate organisations. Given its performance to date, the Foreign Investment Review Board is likely to give the bid its blessing and if TPG succeeds, the editorial position of the Fairfax newspapers is certain to swing to the political right – that is, if TPG doesn’t just asset strip the company.

The struggle for the truth

In the 18th century, before the advent of radio and TV, the press was described as the fourth estate, because its power rivalled that of the parliament, the government or the judiciary. Although the power of the press itself has declined, the power of the media overall is even stronger than that of the press in earlier centuries.

Fairfax Media is not the only media organisation cutting staff. Rupert Murdoch’s News Corporation, which publishes The Australian, the Daily Telegraph and the Herald Sun, has also announced plans to cut costs by $40 million, a move that will doubtless involve the loss of staff positions.

However, Murdoch will undoubtedly continue to fund The Australian, even if it continues to make a loss, because it enables him to exert tremendous political influence. If Fairfax ceased producing newspapers, the print media in Australia would be dominated by right-wing publications, of which Murdoch’s are the most powerful and ruthless.

Murdoch’s publications are already notorious for their scant regard for truth. They frequently rely on smear and innuendo, and sometimes on blatant untruths, in support of the causes they support, for example the repression of unions or the defence of the fossil fuel industries and the denial of climate change.

At the moment, however, they are constrained in their use of outright lies because of the existence of rival publications with greater veracity and a better political position, including the Fairfax papers, The Saturday Paper and the Australian version of the British paper The Guardian.

But that would change if the companies that produced those publications ceased newspaper production, leaving that area of the media in the tender hands of News Corporation.

More power in fewer hands

The government also wants to abolish the “2 out of 3” rule, under which media barons are not allowed to operate newspaper, radio and TV companies in any Australian state or territory.

That would produce a highly dangerous political environment. The commercial mass media is already under the direct or indirect control of very reactionary political forces, but social media provides an additional threat. An increasing percentage of the population now derives its news from Facebook, which is even more notorious than the Murdoch publications in terms of the accuracy of its news coverage.

The quest of media barons to cut costs is also having a drastic impact on the reliability of their news coverage. As the ABC TV program Mediawatch has pointed out, newspaper, radio or TV news editors frequently republish totally phoney social media news items. Hard-pressed editorial staff are not able, or are not encouraged to check whether they are genuine.

Fake news items are often placed on the internet as a prank, but they can have serious political repercussions. That was demonstrated in the recent US presidential elections, where some voters were influenced to vote for Donald Trump, not just as a result of his fear mongering about Muslims, or his empty promises of a revival of “rustbucket” industries, but on the basis of highly-questionable stories circulated on social media concerning his rivals.

Trump also attacked many of the more reliable news organisations which had criticised him before his election. He accused them of producing “fake news”, and heaped praise on sensational US tabloids which had supported him.

The current threats to accurate news coverage recently prompted the editor of the UK Guardian to write:

“I think we have to face up to the prospect that for the first time since the Enlightenment you are going to have major cities in the UK and western democracies without any kind of verifiable source of news. That hasn’t happened for 200-300 years and I think it is going to have very profound implications.”

The media changes within Australia will undoubtedly result in a reduction in the quality and diversity of the media because of a concentration of power in the hands of a smaller and smaller group of news corporations.

That tendency will be exacerbated by the continuing attacks on the ABC, aimed at weakening its objectivity, limiting its news and current affairs coverage and offering a mouthpiece for right wing political forces.

The commercial mass media is committed to defending and perpetuating capitalism, a political economic system which in essence involves paying workers as little as possible for the value they create, and maximising their hours of work.

But the world now faces insidious new media conditions which could limit the ability of working people to win better conditions from the system, and to protect themselves in an era of multiple threats to human civilisation.

Next article – Test for Palestinian unity

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