I’m in Sydney to speak at Digital Directions 11. I’ll post my talk to Slide Share in a bit. The conference is hosted by Fairfax, and yesterday, we got a look at their digital business. There are a lot of news and media organisations that have built credible digital offerings over the last decade without building sustainable digital businesses. Fairfax is one of the exceptions. Fairfax CEO Greg Hywood said that digital is its third largest division by revenue and soon to take over the number two spot. Yesterday, we were told that transactions were 60% of digital revenue. Transactions? They have businesses such as a dating service called RSVP and a holiday home rental service, Stayz.com. They are seeing phenomenal growth in that business. Many of these businesses have been acquisitions, not businesses built in house.

Moreover, the revenue being generated by digital is now driving the ascendancy of digital in the organisation. Recently, Jack Matthews, who had been the CEO of digital, was made the CEO of their metro division overseeing both print and digital. He will drive integration. They are going to integrate their print and digital editorial operations, but the current thinking (and this might change) is that while journalism resources will become a common pool, digital will retain its own editorial independence, Matthews told me. Fairfax has found that print and digital offerings don’t share the same audience. Market research has found that their digital audience is slightly more upmarket than their print audience, and they have decided that they need to maintain digital and print independence to best serve those audiences.

They were ready to admit that integration has often meant print divisions taking over digital. If digital didn’t have such a strong revenue position, I doubt, actually, I’m almost certain, that digital wouldn’t be driving integration at Fairfax. That is not to say that it hasn’t been a battle at Fairfax. I know there has been a battle, and Matthews admitted as much. It’s not to say that the battle is over. However, when digital brings revenue, instead of being pushed aside during print and digital integration, they can actually be in the driver’s seat.