Could Fairfax Media seriously be considering eliminating hard copy versions of The Age and The Sydney Morning Herald, and distributing them only online and to mobile devices?

I doubt it — at least for the next few years. Nevertheless that is the future anticipated by a piece of research from Macquarie Equities, which concludes that an online distribution model could be “significantly accretive” (meaning profitable).

The impetus for this is that the Fairfax Media board has taken receipt of the report it had commissioned from management consultants, who were asked to review the five-year strategic plan put forward by CEO Brian McCarthy.

The Bain and Company report is understood to include a proposal for combining the editor-in-chief for the print and online versions of the key mastheads. Macquarie, however, goes further.

“We believe that a far more far-reaching examination of the Fairfax business cannot be ruled out, including the elimination of newsprint altogether in The Sydney Morning Herald and The Age.”

The report observes that three quarters of the costs for these mastheads are in printing and distribution, and assumes that while going online the papers would be able to hold cover price and advertising revenue steady.

Neither assumption is in the real world, but Macquarie also examines the scenario if only 20% of advertising revenue were retained, and still predicts an increase in profit.

The biggest impediment, the report suggest, is the lack of “an installed base for e-readers”. The suggestion is that Fairfax might be better off giving away 100,000 e-readers at a total cost of $50 million to “seed the migration process”.

Compare and contrast with the approach actually taken by Fairfax with its iPad app. You can only get The Sydney Morning Herald on the app if you already subscribe to the print edition, or live outside the state. Yes, I know, but I am not making it up. Go figure.

Macquarie isn’t really suggesting that online only will take place soon, but they are saying that once e-reader sales reach a certain level, “Fairfax would be in a position to review elements of its print and distribution cost structure with a view to reminding some print runs/truck rolls/shifts etc”.

If the Macquarie scenario came true, The Age and The Sydney Morning Herald would  not be the first print mastheads to become online only, but the record of papers such as the Seattle Post Intelligencer suggests that the move fundamentally changes the nature of the journalism — and still doesn’t make a profit.

The Intelligencer went online because it had ceased to make money — and this is not the case for the Fairfax mastheads, which are still profitable. The problem is the lack of growth.

When I last looked, the Intelligencer still wasn’t breaking even in its online form, had a much reduced reporting staff but was doing some interesting things with citizen-professional collaborations and co-operating with the burgeoning not-for-profit US journalism sector to publish investigative work.

Does the Bain report consider this kind of radical change for Fairfax? Perhaps, as a long-term scenario.

Certainly the report is likely to raise some alternatives to the steady-as-she-goes, gouge the premium position while it lasts approach.

Macquarie expects the Bain report to be released with the company’s annual financial results. I would regard that as optimistic, but if Macquarie is right, it should make interesting reading.

But the real story across Australian newspapers is the lack of ideas, the deep experimentation, the need for a complete rethink — and the fact that nobody has the answers. What the Fairfax board and other media companies are doing is choosing between various best guesses, at a time when standing still is certain death.