Confronting the wave of change

Greg HywoodChief Executive and Managing DirectorFairfax Media LimitedAustralia

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Greg Hywood Chief Executive Officer & Managing Director

WAN-IFRA Conference Kiev, 3 September 2012

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Fairfax is a leading multi-platform media company in Australasia

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External factors

MOBILE

CLOUD

MEDIACONSUMPTIONPRINT

DECLINE

SOCIAL

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Our strategic model

Digital news media & transactions co.

Independent quality journalism & content

Horizontal Media coverage

Print/Radio Online Smartphones/Tablets

Smart TV/IPTV

Cross-platform audiences

Circ/Subs/pay for content

Advertising Digital Transactions

Data, events etc

Monetise audiences through the day

At the core of our strategy is the distribution of our journalism across converging multi-platforms, and the aggregation and monetisation of audiences via multiple

revenue streams

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Fairfax Audience by Media Type% of population (000s in brackets)

Source: Roy Morgan Data March 2012 v March 2007. Fairfax Metro Print = SMH M-Sun net & AGE M-Sun net, GW, SL, TSM, TMM. Fairfax Digital = Any Fairfax site visited in the last 4 weeks. Note: Online audience estimate is regarded as very conservative

(7,173)

30% Growth

30% Growth

Re

ac

h (

00

0s

)

(5,540)

In the last 5 years our metro audience reach has grown by 30% to over 7 million people

38%

33%

Market Total

People who access the Internet at least monthly has grown from 73% to 90% of the population

People who read a newspaper in the last 7 days has declined from 80% to 64%

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New platforms also help us reach new users

Tablet apps - combined SMH/The Age

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

av d

aily

UB

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

cum

ulat

ive

dow

nloa

dsAv daily unique browsers Downloads

1 Sources; AppFigures, Google AnalyticsDue to technical issues with Google Analytics tracking code, complete data for average daily unique browsers for May & June 2012 is unavailable.

2 Source: Frost & Sullivan May 2012Fairfax have estimated this amount based on Apple download figures allowing for estimated removed apps.

1iPads sold in the Australian Market 2

32%

Ipads sold in Australian Market SMH/AGE apps downloaded

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Advertisers can reach our audience throughout the day

First Look Headlines

News in brief on the go

News through the day,

short and frequent

Strong video

behaviours around

lunch

Mid afternoon

break, lighter stories

‘The Overnighter’

strap directing you

to longer content

Catch-up on the day’s

events on the way home

Downtime, longer

content, deeper

engagement

Indulging in some ’me-time’ with inspiring,

longer reads

Late Night Viewing:

Prime Time for Long-

Form Video

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We know that product usage varies by platform across the day

Home Work HomeTravel Travel

Sources: Web/Mobile/Video : Neilsen Aug 2011; Tablet Omniture Aug 2011; Print, Radio Roy Morgan June 2011

Traffic Peaks Through the Day

% o

f pl

atfo

rm t

raff

ic

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Metropolitan newsroom model: around the clock

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Metro problems identified and solutions found

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Changes to Metro Media newsrooms

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Strategic imperatives

MONETISE

BEYOND ADVERTISINGREDUCECOSTS

GROW DIGITAL

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Fairfax of the Future project is transforming the way we do business

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Metro Media: key transformation initiatives

• A digital first editorial model implemented• Removal of ineffective circulation that offers no value to advertisers

whilst maintaining readership market share• Integration of sales across channels

• SMH and the Age to convert to contemporary compact print formats

• Introduction of a digital subscription model for the Metro mastheads

• Closure of the Chullora and Tullamarine printing plants, providing flexibility to convert to a digital only model

By July 2012

From March 2013

By June 2014

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Building required capabilities is a critical first step

Develop deeper understanding of our audiences

Drive performance through aligned incentives and active performance

tracking

Attract, retain and grow talent across the business

Invest in critical technologies to support and enable strategy

execution

• Move beyond historical platform-centric view of our audience• Develop strategic segments to provide focus and direction• Invest in understanding adjacent unmet needs that can be served

• Replace traditional metrics such as circulation• Provide incentives for collaboration across silos• Develop a new ‘language’ for assessing and discussing success

• Commit to understanding and valuing talent across the business• Offer opportunities to learn new skills and take on new challenges• Create an entrepreneurial atmosphere that promotes fresh thinking

• Put systems in place to track and monitor performance• Provide the means for working efficiently and effectively• Centralise and simplify the technology footprint

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Changes to the organisational structure are required to ‘unlock’ whole-of-company opportunities

Edito

rial

Ad Sal

es

Produ

ctio

nCon

tact

Cen

tres

Distrib

utio

n

HR I.T.

Fina

nce

Consu

mer

Sal

es &

Mar

ketin

g

Organised by BU Centralised(no centralisation today)

Centralised(partially centralised today)

Printin

g

Centralised(as is today)

• Maintain ownership of core customer-facing activities in Business Units

• Centralise common activities to enable a whole of Fairfax approach to unlock savings and variablise costs

Produ

ct

Devel

opm

ent

Metro

FRG

Regional

Ags

Marketplaces

NZ

Radio

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In conclusion

ONLINE NEWS

PLATFORMS

GROWING AUDIENCES

COST DISCIPLINES

PROFITABLE PRODUCTS

We’re focused on continued decisive leadership in the development and monetisation of online news platforms

We’re focused on growing audiences – already having the largest news audience in Australia

We’ve got rigorous cost disciplines

We’re continuing to develop profitable products – across print and digital – with a focus on accelerating our online business which is seeing strong revenue growth

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