I would like to thank the Property Council for giving me the opportunity to speak at one of its lunches.

Most people in the Melbourne business community would recognise the growing stature and popularity of this forum in stimulating debate on important issues confronting both this state and Australia generally.

The Property Council is therefore to be congratulated.

There are obvious long standing synergies between the property industry and The Age, both editorially and in relation to advertising. The Age brings property and real estate to hundreds of thousands of our readers. We are clearly the premier property advertising and editorial vehicle in Melbourne.

Advertising revenue helps us to publish an independent, influential, quality broadsheet newspaper to Victorians seven days a week, and to deliver the independent thinking, affluent reader audience to advertisers and industries such as yours.

Today I have been asked to talk about The Age, to canvass the role it plays in the community, and also the future of newspapers in what has become a multi-media world.

A big task indeed.

The Age is a bit like any institution in Melbourne – whether it be the Catholic Church , or the Collingwood Football Club . But in better shape than the latter.

Just as many of you would have on occasion experienced the community’s wrath or adulation in terms of new planning schemes or property developments, The Age also evokes similar passionate sentiments.

Whether it be the property world or the media, the community’s expectations have changed. People are demanding companies and institutions be more accountable to the people they serve directly and to the broader communities in which we all operate.

The Age is certainly no exception.

As a major player in the Victorian community (a large corporate, media organisation) we have a particular responsibility to continually inform, articulate, explain what we do and why.

Whether it be codes of conduct for journalists, admitting we were wrong in relation to certain stories, or explaining and justifying certain editorial and management decisions to external audiences, newspapers will only exist and thrive if they continue to earn the trust and respect of the community - a point to which I will touch on later in my speech.

Communications and information revolution

We have all witnessed dramatic change in virtually every area of our lives.

Whether it be our cultural diversity and gender issues, the nature and rate of technical innovation, the changing nature of our industries, the way we spend our time and money, or the emergence of the global economy, the changes have been and remain, sustained and unrelenting.

Even the most conservative or technophobic among us would recognise that in communications we are experiencing a transformation equivalent to that of the industrial revolution.

But compared to previous generations we are experiencing all this change on a broader front and at a much faster rate.

The convergence of broadcasting and telecommunications has spawned a plethora of new electronic information services.

The advent of digital technology will soon open up hundreds of new distribution channels for screen-based content, new economics for industry, new businesses, and new relationships with customers.

All this activity in itself, poses major questions for existing media forms such as The Age or free-to-air TV.

Because of the frenzied activity surrounding internet stocks - where shares in some cases are trading at 3000 times earnings – some have postulated that newspapers are an endangered species.

But where does the hype end and reality set in ? What is really likely to emerge ?

First, we should all take a cold history shower.

History is littered with examples of wild predictions and coventional wisdom coming unstuck.

It was that great American inventor, Thomas Edison, who said in 1922 and I quote: "the motion picture is destined to revolutionise our educational system and that in a few years it will supplant largely, if not entirely, the use of textbooks".

The same thing happened to the strategists at Daimler Benz in the last century when they predicted that there would only ever be one million cars in the world because only one million people could afford to keep chauffeurs.

Remember the prediction of 20 years ago of the golden age of leisure and, of course, the "paperless office"?

We are now using more paper than ever before.

In the last ten years world paper consumption has increased by 47%.

And in the specific newspaper side, the evidence both in Australia and internationally is also illuminating:

The latest figures reveal that in Sydney and Melbourne, the number of people reading at least one metropolitan newspaper each week has actually grown by nearly 2% over the last three years.

Moreover, instead of newspapers being replaced by internet time, time spent reading newspapers has increased by 1%. It is in fact broadcast TV which is losing market share to the internet. (Fletcher Challenge April 1999). It has also been revealed that :

although use of the Internet (once a week) in Australia has now risen to 22%, the majority of usage is for accessing email and surfing the web. Almost half of internet use in relation to the media is in addition to other media use.

87% of Victorians aged 14 and over still read a newspaper each week.

According to Eric Mayer, a media scholar and online publisher of American Journalism Review (1999), the core audience for online news is around 12.6%, compared to daily market penetration of 74% for newspaper, television, and radio news. Importantly, consumption of online news has only accounted for declined use of traditional (news) media by 0.7%.

This is not to say our business should ignore the impact of the net in the future.

We aren’t.

However, judging from the evidence which is coming out of the U.S., which is ahead of us in terms of internet penetration, the potential impact so far on print circulation appears slight.

People are simply forgetting the lessons of communications history.

The alphabet has served no fewer than 95 generations, the printing press still expands bookshelves and newstands.

Electronic media is just into adulthood. Computers and their usage is still being developed.

Where it all leads to is yet to be determined.

As the Chair of the U.S. Federal Communications Commission, William Kennard, told broadcasters recently on the transition to digital television, the first TV transmission was actually a phone conversation transmitted over copper wires – basically an interactive experience.

He said : "Here we are, 72 years later, and we find ourselves back where we started".

One of the major lessons of the last 50 years is that each form of media has adapted to a new environment.

TV, the internet, the computer, newspapers all have different roles, reach, and value than when they were first on the scene.

Each marvellous communications invention has spawned another and each form settles on what it does best within that new environment.

TV, radio and film did not kill newspapers.

Video has not killed television, nor have computers.

TV has not killed off cinemas, nor have videos.

Despite TV, film, video, and the internet, books are thriving.

The past decade has seen a 10% increase in the book market in the U.K. alone.

Just as one of the best known book retailers, Amazon, has sold books to more than 4.5 million people on the web, the internet or on-line news and services are more the emancipation, not the emasculation of newspapers.

The biggest barriers to newspaper expansion – the cost of additional newsprint, the cost of physical delivery and geographical distance - are gone.

The days of providing information, news, and services once every 24 hours is gone.

The days of the relationship between readers and advertisers and the paper being, largely, one-way and one-dimensional, are gone.

Newspapers like The Age are building a better service for subscribers and advertisers, using print and on-line.

Rather than viewing on-line technology as a threat, The Age like other leading newspapers around the world, is perceiving it as an opportunity, embracing the strengths it has to offer, and focusing more on what the paper can and should do best, what on-line can and should do best, and on what the optimum relationship is between the two.

We see print and on line being complementary, not mutually exclusive.

The Age’s online site already updates news and sport throughout the day and it is not unusual for us to break news on line during the day, so we’re better able to compete with radio, and in particular, TV.

We also provide links to Citysearch online, updates from the stock market, and IT jobs.

We are already connecting our print product with on line services (e.g. the section Drive on Thurday and Saturday, our motoring magazine, with Drive.com.au).

We will be doing the same with employment.

In terms of real estate, line and display ads for residential and commercial property are now uploaded on to Fairfax’s online site automatically.

For a small fee an agent can list residential properties with photographs, floor plans, and 360% views. We offer snapshots of property prices, suburb demographics, longer descriptions of houses, and links to agents.

Over 3,500 people now visit and perform 8,000 searches each day on our real estate site.

We will be doing the same for commercial property.

The Age is developing into a product and relationship with readers and advertisers well beyond a newspaper – expanding on the success of its masthead to satisfy the community’s insatiable appetite for specific news and information and our advertisers demand for targeted markets.

With digital convergence and the advent of numerous distribution channels the demand for content (and accompanying multiple revenue streams) has the capacity to grow exponentially.

There is an irony here too.

As screen-based content becomes multichannel, diverse, and specialised, print media is likely to regain prominence as the medium most suited for mass communication.

The advantages of newspapers are clear.

You don’t need a help desk or a user manual to read a newspaper.

You are not faced with server disconnects or slow image resolution.

Print is portable, it is convenient, it is aesthetically pleasing.

It also plays a very important role as a community billboard which uniquely connects and binds like-minded people – and acts as an important link – in a way any civilised, intelligent, contemporary society should exist and operate.

The Age : Role and Future

So, newspapers are still the dominant source of news and we’re adapting to a changing technological and consumer environment.

But where is The Age positioned journalistically, financially, organisationally on the eve of the new millennium ?

And how does The Age and journalism function in an era when there is a tendency by some media groups such as News Ltd or PBL to commercially diversify well beyond their original base– or when, as some argue, the editorial and commercial sides of newspapers are increasingly and unhealthily converging ?

First, some comments on the structure of the newspaper market in Victoria.

Compared to other cities we have one of the most competitive newspaper markets in the world.

Cities such as Dallas, Houston, and San Diego in the United States, for instance, with populations as big or bigger than ours only have one daily newspaper (apart from the national "US Today" and the financial Wall Street Journal).

Even Washington DC with a population of 7.2 million only has two daily newspapers.

New York with a population of 19.8 million has three.

Melburnians currently have the option of two daily newspapers (four if we include national ones) where the metropolitan population is only three million.

Will that continue in the age of fragmentation and multiple distribution channels ?

We take nothing for granted.

As I said previously, while the internet does not pose as great a threat as doomsayers would have us believe, there is no doubt that competition is intensifying within and between media for the time, money and attention of readers , potential readers, and advertisers.

The fact is that many people today choose to spend $2 for a cup of coffee several times a day rather more freely than they choose to spend on their favourite newspaper.

A newspaper like The Age at $1 a day, $1.70 on Saturday and $1.30 on Sunday, or $5 a week if you take advantage of being a loyal subscriber, is remarkable value for what it offers the reader and the community.

More immediacy, breadth, depth than weekly magazines costing $3 and $4, a video costing $6 for 24 hours, slim books costing $12 and more, or pay TV channels for $12 a week.

In an area where people are having to make tough choices in relation to time they spend on certain things, the commitment to previous "mainstream" habits are being questioned.

If your business or service can’t withstand that consumer questioning, you’re in trouble.

The challenge for The Age is to give people a reason to spend their money – and their minds and their time – with us.

How do we do that ?

It means sustaining The Age’s traditional strengths while continuing to improve editorial content by providing compelling reading and information of value to everyday life.

It also means establishing a deeper, emotional, and intimate understanding and connection with who our readers are, offering new services and information.

Providing more intellectual and emotional value for money.

We also need to broaden our horizons – not simply thinking of newspapers as news and ink on paper, but as a supply of news, information, connections, knowledge and understanding that will be accessible at many levels and in many forms.

There is always a rush to the "new", that is human nature.

There is always an appeal for the "all you can eat"/ "all the channels you can watch" sales pitch.

But choice and quantity is worth less to many people without an accompanying quality and value which lasts.

We all go to the fast food outlets, we probably all try a "$10 all you can eat" Sunday lunch once in our lives, but neither will compete with the depth of the relationship with our favourite restaurant.

Newspapers have been challenged by new forms of communication and social behaviour since Gutenberg in the 15^th century.

But they have adapted and survived.

A commercially successful newspaper, however, does not mean the commercialisation of it.

One of The Age’s great strengths is its history of authoritative, fearless and independent reporting of news and current affairs.

We do not integrate, unlike other media organisations, other conflicting commercial interests with editorial content.

Unlike News Ltd, we are not in the position of having to report daily on matters which affect the company’s national and international interests in areas such as airline ownership, pay TV rights, rugby league, sporting teams and stadiums, book publishing, the entertainment industry, or Hollywood merchandising.

When our readers read the business or sports pages they at least know that coverage is genuinely independent.

They now know that The Age has a code of conduct which gives guidance as to the high ethical standards expected of The Age , how we behave, and how we relate to newsmakers, sources, contacts, colleagues and the public.

When our readers read international news they know usually they have the opportunity to do so through Australian eyes, from an Australian perspective.

The other traditional strength of The Age is its tradition of playing a leading role in debate and community on important issues facing our society.

Whereas most other newspapers in Australia are content to chronicle the turning points of Australia’s social development, The Age draws the attention of thinking people to major issues and engages the community in intelligent discussion on those issues.

Tomorrow night, for instance, over 800 people will be attending our Vision 21 millennium series event on the environment.

As a daily newspaper, as a community billboard of ideas and discussion, as a filter of information and knowledge, as a recorder of where we have been, a translator of where we are at, and a signpost of what is to come, we have a unique role to play.

We don’t foresee all the issues, we don’t always engage the community and we don’t always have as intelligent a discussion as we would like.

We get things wrong.

And too often in the 80’s and much of the 90’s The Age was out of touch with the changing needs of the community and disappointed core constituencies.

The company failed to capitalise on the strength of The Age’s history, traditions, and brand name.

We took the view 18 months ago that if The Age is to retain its place as the only Australian owned quality newspaper in Melbourne against a big F competitor – Fierce and Foreign -with deep pockets and a fundamental desire for The Age not to live up to its full potential, we needed a long term strategy which focused on quality journalism, growth and investment.

Gimmicks or quick fixes such as massive discounting – which The Australian has embraced for the past year– and a strategy which was costing The Age over $8 million a year and which prevented us from investing in quality journalism, are out.

To address these weaknesses, The Age has embarked on an aggressive agenda of reforms organisationally, journalistically, and financially.

Organisationally, our focus has been on ensuring costs do not outstrip revenue growth, improving customer service, providing proper training and development of journalists, introducing new technology, systems and processes.

On the content side, we redesigned and relaunched the paper, boosted our business, international affairs, and sports coverage, invested heavily in investigative journalism, instituted a code of conduct for our journalists, added a raft of new sections to the paper such as IT, Drive, Money, Domain, and new magazines (e.g. fashion, technology, wine).

These new sections are proving popular with readers and advertisers alike.

Finally, The Age is also now again beginning to play the independent leadership role in the community for which it was renowned.

Whether it be our Vision 21 millenium series focusing on the challenges facing Australia in the 21^st century which engages the community in debate, our Artstate ’99 regional arts program, or simply assisting CARE Australia with its refugee appeal, The Age has the opportunity, and indeed, responsibility to play a leading role.

While there is still much to be done there are signs of improvement.

Despite News Ltd’s price cutting in Victoria and what they would like you to believe, our readership is up in key segments (particularly among young people), our circulation is beginning to grow again after washing out the artificial effects of heavy discounting, and the number of committed readers, (home delivery) has significantly increased.

Our journalists are winning more awards than any other newspaper in Victoria.

Advertising - particularly in relation to our key readership audiences - has never been healthier.

There is still a huge demand by industries such as yours to reach The Age’s readership.

We now carry 7 times as much classified advertising as The Australian (nationally) and 3.5 times as much as the Herald Sun.

In fact if one looks closely at the Herald Sun’s performance between 1991 and 1998, its circulation dropped by about 85,000 copies or 13.3% (compared to a decrease of less than 9% for TheAge).

The Herald Sun’s decline in circulation is despite extensive giveaways, promotions, gimmicks, and selling year-long subscriptions for as little as $3 for a full year.

So the outlook for The Age is positive – which probably explains our competitors growing attacks, such as price cutting, in recent times.

So, in conclusion, rather than becoming less popular in the 21^st century, I believe that strong familiar brands such as The Age will thrive in the content-rich environment.

People are drowning in information but thirsting for knowledge.

People are tiring of news which is sensationalist, superficial, and contrived or as one media commentator put it "the worst kitsch and the greatest mendacity".

In the past four years the audience percentage watching the news on the three leading U.S. television networks has shrunk from 60% to 38%. The old formula where 72% of stories were reports on local violence, drugs, robberies, rape and so on, is obviously wearing thin in the U.S. market, and there are signs of the turn-off happening here.

If sociologist, Hugh Mackay, is correct in saying that the most likely development to occur in Australian society in the 21^st century is a reconnection with the community, those traditionally strong media that provide context, understanding, and connection with their community will be the ones that prosper.

As Theodore Roszak wrote in an amusing article on the New York Times web site last month which was entitled "Shakespeare never lost a manuscript in a computer crash":

"Information is worthless if it is not informed by ideas, values, and judgement…As "Shakespeare in Love" reminds us, our cultural heritage comes down to us from men and women who needed no machines to think with, but only the resources of their own naked minds working upon deeply pondered experience and beyond that perhaps a sharpened feather to scrawl those thoughts on any waiting surface".

I think, like Shakespeare, we’ll be using and talking about newspapers well into the 21^st century and beyond.