Newspaper Nine Queensland
(Image: Unsplash/Bank Phrom)

The Nine owners of the formerly Fairfax metropolitan newspapers came close to declaring victory over media disruption when announcing their half yearly results last week. But a look at the details and the papers themselves tells us it’s a victory based on doubling down on its traditional audience — now overwhelmingly aging retirees with money to spend.

This group drove the profit result through a mix of subscriber revenues (particularly of the print product) and niche advertising targeted directly at them.

This is not the “grumpy old man” demographic buying News Corp papers. As The SMH, itself, said, these are “Baby boomers spending kids’ inheritance on adventure and self-discovery”.

And that’s why the journalism — once the record of the times in their respective cities — is now shifting to match this narrowing audience. Expect a lot more about franking credits, property values, slacker millennials and experience-centric travel.

The company’s anonymous report in its Friday papers quoted Patrick Potts, an Investment Analyst at Martin Currie — a Nine shareholder — who said that the metro division had “well and truly been restructured and is on the trajectory to grow.”

The figures, (revenues up 4%, costs down 3%) entitled the new Nine owners to slap the old managers on the back with a “Well done chaps!” coupled with perhaps a quieter “Thank you” to the thousands who lost their jobs over the past decade.

The big shift of that decade is that the journalism is now a money maker, rather than a cost leader. Almost all the revenues – both subscriptions and the bulk of the niche advertising – is directly attributable to the journalism.

Classified advertising, which used to be thought of as “rivers of gold” have run as dry as the Menindee Lakes. They’re now only a little part of the daily newspaper bundle that they once largely funded.

Now, subscriptions are greater than advertising revenues, producing $114.1 million across print and digital in the six months, compared to $103.7 million in advertising. This “cross-over” has been something of a holy grail for newspapers as advertising has shifted online and out of media as reported in Crikey last week. However, both subscription and advertising revenues remain stronger for print than online, reflecting the older audience.

Content is becoming increasingly niche for the retiree demographic. Take last Saturday’s SMH. Of the 45-odd pages of ads in its 152 page book, about two thirds were for discretionary travel for retirees with money to spend and time on their hands. Another three pages were death notices. Can’t get more niche than that.

As the American Press Institute has shown, readers will only keep paying if they feel that that their values and the values of the masthead align. As Harvard researchers revealed last year in Network Propaganda, this requires mediation through ethical journalistic values rather than simple reinforcement of political views, (for all groups other than for committed right-wing conservatives).

The SMH and The Age risk losing this alignment (and consequently both reader revenues and advertising targeting those readers) as – led by the AFR, and followed by the others – the company has been attempting to re-position itself to the right of centre. This has been expected to accelerate as part of the Nine merger, with the new company chaired by Liberal Party elder (and former Howard Treasurer) Peter Costello.

Yet, in both Sydney and Melbourne, the mastheads are aimed at the more progressive inner city and eastern suburbs (and, in the case of The SMH, the northern suburbs). As the past few elections have indicated, these are moving away from the Liberal Party on climate change and treatment of asylum seekers (and, in the Wentworth by-election, in revolt against the company’s own shock jock, Alan Jones).

The self-funded retirees among these sunny silver nomads benefited from the Costello budget decisions on superannuation tax and deemed franking credits. But a regular reading of the mastheads Saturday Readers Panel would suggest a more diverse position.

They’re not looking for another, softer, News Corp and the Harvard study makes clear there is no market for a left wing equivalent. The comfortable progressive centre and left – the Fairfax papers’ traditional audience – want the journalism they’ve aged with: journalism of fairness and truth-seeking – and about them.

Do you think this is going to be a winning strategy for the Nine papers? Write to boss@crikey.com.au and let us know.