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Constant revolution

In these straitened times journalists look for comfort where they can, so let’s take encouragement from the news that advertising revenue at Mail Online is currently rising faster than advertising revenue at the Daily Mail and Mail on Sunday is falling; that the Financial Times now has more readers paying for the paper in online and mobile format than in hard copy; that The Times and Sunday Times have attracted more than 153,000 digital subscribers and, since introducing a paywall last August, The Sun more than 100,000. Perhaps newspaper companies can have a future.

When the internet arrived in homes in the 1990s it took time for papers to recognise that this distressingly effective model for the free distribution of information posed a threat to an industry that did it for money. While some adventurous titles began to put up a few stories on a website – The Daily Telegraph was first in the UK, in 1994 – many in “old media” wished “new media” would go away. When the first dotcom bubble burst in 2000, it looked as if might. Once it became clear it was here to stay and was going to put them out of business, they set about trying to make it pay.

The remarkable thing is that there is so little agreement about the way to do that. The industry is kicking itself for creating unhelpful expectations among its readers by giving away so much in those early days. It should never have listened to those early, presiding spirits who came to work not wearing ties and said internet users would never pay for news and information.

That’s pretty much where consensus ends, for the industry splits over which model wins. Two titles look safe, for different reasons. The Financial Times realised that business people would pay handsomely for information they couldn’t get elsewhere and quickly built a successful subscription model. The Guardian, which understands the mood of the internet better than anyone else, sits resolutely at the free end. It took £56m in digital revenues – £25m of it from advertising and sponsorship – last year, but still lost £31m. No one seems very confident that the figures will ever add up, but the title – now a global brand thanks to the editor’s ambitious news agenda – benefits in having as an owner the Scott Trust, which allows it to follow an editorial rather than commercial imperative.

The brutal clash of commercial models takes place, as so often, between the Rothermere and Murdoch stables, one believing in free, the other in subscription. Mail Online has also built a global brand – some 10 million people come to look at the site every day – and continues an aggressive hunt for readers on the basis that advertising revenue will follow. Revenue figures are rising fast, but so are the costs. Mail Online now employs 500 people, around a quarter of them in the USA, and publishes a huge amount of material that does not come from the paper. Online advertising revenues over the last year of around £46m do not currently pay for all that, though the analysts who follow DMGT, the parent company, seem confident that they will rise fast. The important point about Mail Online, which separates it from the first iteration of newspaper websites, is that it has developed a life of its own, offering a more frothy, news, show business and gossip mix than appears in the paper.

Taking an alternative view, the News UK titles – The Times, Sunday Times and The Sun – have decided an army of readers looking at free websites is worth less than a select audience that pays. The company is prepared to spend – including an estimated £20m on buying the rights to show goals from the Premier League – to attract them. Times readers have just been offered a new incentive – a free subscription to the music site Spotify – in a move that plays to the News UK plan to build a customer base that relies on the company for more than journalism.

Both companies have developed sites that offer different things from their core newspaper titles, yet remain, at heart, newspaper groups. Mail Online is run by a newspaperman, The Times, Sunday Times and The Sun drive the agenda within their organisations and – at least in the case of The Sun and the Daily Mail, make the money. This is despite the fact that no one seems confident that newspapers can last.

So it is fascinating to see what Telegraph Media Group can do with an alternative model, which is to make the newspaper titles only one of the channels of distribution rather than the cultural heartbeat of the organization. The group has put its creative drive in the hands not of a newspaper editor, but a leader from American television. It is a bold plan: could it be the mean a future for journalism but an the end for “newspaper companies”?

Posted by British Journalism Review @ 1.06pm on 1 March, 2014
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