‘If you’re asking me about the future of newspapers, you’re asking the wrong question.’

It was with these words that Fairfax Media’s chief executive, Greg Hywood, began his talk and, in a sense, sought to change the direction of debate within the journalism industry. The University of Melbourne’s Vice-Chancellor, Glyn Davis, alluded to this in his introduction, when he said the journalism lectures of previous years all spoke on the dire condition of the press.

Hywood was taking a stand last night.  Journalism has a future, he claimed, and it would rise like a phoenix from the ashes of newspapers.

‘The “chicken littles” out there worry about the current chaos,’ said Hywood. ‘The future of journalism has never been brighter. Not in spite of the internet, but because of it. The demise of newspapers won’t lead to the demise of journalism.’

The talk, in great detail, outlined the business model of newspapers. For 160 years, they had been based on selling classified advertising, almost subsidising journalism in the process. There was a time when this meant big profits – each Fairfax newspaper would make more than five million dollars profit each Saturday.

But with the arrival of the internet, Hywood knew that things would change quickly.

‘When I first saw the internet, I knew that it was a game changer. The classified ad was there in black and white, but it wasn’t in ink. It was the end of a 160-year business model.’

Fairfax made an early call of launching its mastheads online, starting with the Sydney Morning Herald in 1995, followed closely by The Age.

‘There were questions of who would pay for journalism if we were willing to give it away,’ Hywood said. ‘Did you have to destroy a business to save it? These questions are still being asked now.’

The online audience is one that Fairfax has been engaging with, by making its content available on the internet, on phones and tablets, and on iptv.

There have been benefits that have come with this, giving Hywood a reason to be optimistic.

‘I was never particularly concerned, the power of journalism is the ability to adapt,’ he said. ‘Technology is enabling us to reduce our costs and reinvest in journalism.’

For years, the success of a newspaper has been measured by its circulation figures, which are continuing to decline. For the year to September, newspaper sales in Australia have fallen by 3.8 percent.

It’s a drop that Hywood couldn’t deny.

‘Circulation numbers are outdated. Today, it’s all about readership, and the real statistics tell a powerful story. Thirty years ago we had a readership of two million, today we have 6.7 million. Advertisers want the online audience, and online ads are rising faster than print.’

Not all of Hywood’s lecture was hopeful, as he cast a critical judgment over the ongoing media inquiry, and voiced a concern that it could result in political interference. ‘The government is trying to restrict press freedom,’ he said.

Rather than having a government-funded regulatory regime, Hywood advised that newspapers should be led by those with the best experience.

On the subject of paywalls, Hywood wouldn’t rule out the possibility that Fairfax publications would embrace it. Fairfax newspaper The Australian Financial Review has been operating with a paywall.  News Limited’s The Australian recently became the first mainstream newspaper in Australia to lock up its content behind a paywall.

But Hywood said the key lies somewhere in between.

’85 percent of our revenue comes from advertising, so we don’t want to reduce access, especially with competition just a click away. We want to increase the audience, not limit it.’

The final question of the evening asked, inevitably, for a prediction; how long did Hywood think newspapers would still be around?

‘The average age of our print subscribers is forty-five. I’d say we only have a few years left of print,’ he replied.

‘Who knows what’s next? It doesn’t matter. But the future role of journalism should not be questioned. I have zero doubt about it.’

Greg Hywood delivered the A.N. Smith Lecture in Journalism at the University of Melbourne.

Matt Smith is a Master of Global Communications student at La Trobe University, and is upstart’s incoming co-editor. You can follow him on Twitter: @nightlightguy.