Niche work — if you can get it

There’s a thoughtful comment by James Harkin in today’s Guardian about Rupert Murdoch’s decision to charge for online news.

The cheerleaders of a free, digital utopia want to resurrect the mass market for news by having us chat to each other and our newspapers all day long. But between the fusty old newspapermen who refuse to tweet and the gadgeteers who do little else, there is little evidence that the rest of us have the time to be cogs in an all-purpose electronic machine. Long before the net tore apart its business model, the truth is that many newspapers were looking bloated and fat, as if lifestyle supplements and the advertising which went along with them was all readers wanted.

What they wanted, it turns out, was focused content, written by journalists who know what they’re talking about. The freshest news outlets springing up in the US, for instance, are Politico, the magazine aimed at political junkies which broke the scandal of the Washington Post charging companies for access to its reporters, or TMZ, the well-connected celebrity mag which broke the news of Michael Jackson’s death.

News organisations will, as a consequence, divide into populist monoliths which try to be all things to all people – witness the growth of news aggregators, for example – or, more promisingly, slim down and concentrate on what they know about.

He’s right. As someone who’s written for print newspapers for nearly four decades, I remember well the glory days of print: of national publications that were prestigious, politically influential and indulgently managed — when they were managed at all. There’s a lovely story in a biography of Roy Thomson, the Canadian press baron who bought the Times and the Sunday Times (and whose family later sold the titles to Murdoch). When he was being shown round the ST he and the CEO ran into a blue-overalled chap on the stairs going down to the print room. He was the Father [shop steward] of the NGA Chapel [local branch of the printers’ union]. The CEO introduced Thomson as the new owner of the paper”. “Well”, said the chap, “you may own it but I run it.” And, in a sense, he spoke the truth: as the shop-steward of the print union, he was in many respects the most powerful figure on the paper — because he could determine whether it got printed on a particular evening or not. Management proposed, but the NGA disposed. Journalists of my generation can all remember nights when the print run would stall until Management agreed to some union demand or other.)

Rupert Murdoch changed all that, because he broke the stranglehold of the print union with a breathtaking combination of ingenuity and ruthlessness. He secretly built a new publishing system in Wapping, negotiated a secret deal with another union — the electricians — to run it, moved his entire operation overnight to the new location and changed his distribution system from union-dominated railways to trucks run by his Australian chums at TNT. When the print union tried to shut down the Wapping plant by picketing and blocading it, they found themselves up against the new Thatcherite labour laws (which outlawed ‘secondary’ picketing) and a government determined to crush the unions using the police as a battering ram.

Wapping changed everything for British national newspapers, and for a time it became possible to run them as rational businesses. In the process, they also became profitable — in Murdoch’s case, highly so.

But in fact it was a temporary reprieve. That profitability could only have endured in the information ecosystem of the print era. The print newspaper is a value-chain which links an expensive activity (journalism) to a profitable one (display and classified advertising). If the journalism was suitably sensational, then it brought in lots of low-grade readers, and with them high sales and advertising revenues; if the journalism was of higher quality, it brought in a better class of reader, and with him higher advertising rates. Either way, for nearly a century, the proceeds from advertising greatly exceeded the costs of journalism and newspapers were profitable.

When the Net arrived, most newspaper people misunderstood its significance. They thought that the threat it posed involved online news. What they failed to spot was that the main impact of the Net is to dissolve value-chains. In the old days, the only way to do classified ads was via a newspaper. But the Web is intrinsically better for classifieds because it adds the power of search, so that instead of having to wade through pages of small print looking for that 1963 Mercedes 380SL you’ve always craved, you just enter the text in a search box and — bingo! — there it is, a snip at £15k. So the real threat to the newspaper business was that the Net would dissolve the value chain which made them profitable. And that’s what has happened. Of course newspapers still had display advertising — which doesn’t work on the Web — but that’s a business that comes and goes with the business cycle, and at the moment it’s way down, which is why the crisis for papers is even worse at the moment than it might otherwise have been.

In the post-Wapping era, British newspapers tried to broaden their appeal by expanding their offerings via an explosion in lifestyle and other ‘supplements’, business sections etc. Saturday papers expanded from being the slimmest of the week to being the most bloated. The Sunday Times led the charge to turn itself into the literary equivalent of a shopping mall with a TV advertising campaign which described the paper as “the Sunday papers”. And for a time, it appeared to work — at least in the sense that the new supplements boosted advertising revenues.

But even then, it was obvious to the perceptive eye that there was something wrong. I found it fascinating to watch how people dealt with these new shopping-mall newspapers. First they would tear open the cellophane wrapping and cursorily inspect the contents. Then they would pick out one item after another and dispose of it — until they were left with the one or two sections of the paper that they really wanted. Of course for any individual the retained sections might be different; but the pattern was always the same — people were choosing only what they wanted, and throwing away the rest.

In a bricks-and-mortar world, this kind of carpet-bombing of the consumer may make some sense — it’s a way of ensuring that the advertising message gets through. But it’s incredibly wasteful and inefficient in the same way that manufacturing, burning and shipping plastic disks is an incredibly wasteful way of getting bitstreams from a recording studio to an iPod. Once the Net was invented, there was no going back for the record companies to the business model that had served them so well in the old days. So it is for the newspaper business.

My hunch is that the game is up for the carpet-bombing approach. The era of the all-things-to-all-readers newspaper is ending. That doesn’t necessarily mean, however, that there isn’t a future for some kinds of print newspaper/periodical. Just looking at my own behaviour, I’m happy to pay for certain kinds of high-quality, generalist, content: it’s why I subscribe to the Economist, the New Yorker and the London Review of Books, for example. And why I buy the Guardian. (Full disclosure: I write for the Observer, which is owned by the Guardian.) I’d also pay to read a select number of columnists and reporters — names that come to mind are Paul Krugman, Frank Rich, Vic Keegan, Charles Arthur, Andrew Brown, Martin Kettle, George Monbiot, Robert Peston, Nick Robinson, Rory Cellan-Jones, Bill Thompson, John Kelly. But I wouldn’t pay for any generalist, middle-of-the-road newspaper, online or off.

I said in my Oxford seminar that I welcomed the Digger’s experiment because until someone seriously tries to charge for content we won’t know what its real price is. I meant what I said. Roll on the Autumn!