Fairfax Media’s subscription model, ventures such as StreamCo and native ads and events businesses will lead  transformation into a modern media business with diverse revenue streams, chief executive Greg Hywood says.

And he repudiated what “wishful thinking” that Fairfax would disappear. The company was set up for future success after clearing its debt and focussing on its digital business and assets, he told Publish conference delegates in Sydney.

“The number of people reading the Sydney Morning Herald and The Age has never been higher,” he said. “You can look at the Emma data at any time to see this.”

The most recent monthly data showed that the combined multiplatform readership for the two metro titles was around 8.3 million people, and smh.com.au had topped the Nielson online readership ratings for the past three months.

Fairfax’s move into events has been an overwhelming success, and revenues have increased 33 per cent year on year, with estimates that events could be a $100 million revenue stream for the company in several years. Recently the company announced a new music, film, books and arts festival called Spectrum Now that will launch next year, headed by actor Richard Roxburgh.

The company is constantly thinking about “what are the ten, 12 or 15 other revenue streams that we can build from our audience”. Asked about whether the company’s transformation was finished, Hywood said the company would always be reinventing itself, as media was an inherently fragmenting and changing industry.

Despite any changes to its business model and distribution channels the company will remain committed to the public good it provides, he said, citing the work of Sydney Morning Herald investigative reporter Kate McClymont, which is helping “keep our community civil”.

Hywood said that the company had turned over about a third of the workforce as part of a transformation project which had dismantled what was a vertically-integrated legacy model built and broadly unchanged for 150 years.

“There is a lot of stuff that we can do in terms of being vastly more efficient, in terms of sharing services, in terms of outsourcing a lot of functions that, frankly, other industries and companies did years ago,” he said.

“Publishers haven’t done it because they’ve had monopolies or oligopolies and because they were so confident that the streams of revenue that they had, which were hidden behind entry barriers in $200 or $300 million printing plants in each city, they didn’t really need to be as efficient as they could have been.

“What we’ve done is change the business model, we’ve gone digital first while maintaining a newspaper business, not either/or…and we’ve made sure that every job in the place has a link to content, journalism, sales, because that’s what’s important.”

He said that these changes had made the company significantly younger and that there are now an established group of young people that are taking the control of the company and would lead it into the future.

On Fairfax’s joint venture with Nine Entertainment Co. into a streaming subscription video on demand service, Stan, Hywood said that the company’s $50 million investment was significant, but that the decision was obvious.

“If you look at consumer behaviour, why wouldn’t you be in the streaming and online video demand business,” he said.

The recent announcement that Netflix will be launching its video on demand service in Australia in March next year was not an indication that the market would too crowded to capitalise on, Hywood said.

“It’s a big market, I don’t think there’ll be a monopoly and I think there will be content differentiations between us too, especially with our focus on local content.”

–Will Mumford, courtesy The Newspaper Works