Irish newspapers: Lagging behind the UK’s anaemic recovery

Posted by Peter Kirwan on 15 March 2010 at 17:31
Tags: Johnston Press

Johnston Press may yet regret not selling its Irish newspapers for a firesale price last year. I say this because of what the company told investors last week about ad revenues at its division in the Republic.

During 2009 as a whole ad revenues at papers like the Leinster Leader and the Kilkenny People fell by a whopping 33% in local currency. Ad revenues at the company’s UK-based newspapers fell by 27%.

Yet as time goes on, the divergence between the UK and Ireland is looking more marked. During Q4, at Johnston Press’s Irish newspapers, print-based ad revenues declined by 21% YOY. During the first nine weeks of 2010, the decline was 23%.

In the UK, Q4 saw print ad revenues decline by 12%. During the first nine weeks of 2010, the decline was 7.6%.

“The improvements in property and motors seen in the UK were not seen in the Republic of Ireland,” the Johnston Press told investors.

No — and they won’t be for quite some time. As it happens, I was in Ireland last week. The figures for GDP suggest that the Republic emerged from recession during Q309, earlier than the UK. But it doesn’t feel that way.

Public spending cuts have been savage, and there’s more to come. The unions are mutinous. In the private sector, wage cuts and longer hours are the norm. The Republic’s banks are still announcing billions of euros-worth of write-offs, mostly connected with property deals.

If George Osbourne and the Daily Telegraph are correct, Britons are living in a fools’ paradise. On this basis, perhaps Ireland offers a taste of things to come if (or when) public spending cuts kick in alongside an anaemic recovery in the UK.

Coincidentally, the outlook seems correspondingly bleak in Northern Ireland. Richard Ramsey, an economist with Ulster Bank, suggests that the private sector in Northern Ireland “continues to experience the most severe squeeze on profit margins of all the UK regions.”

Publishing newspapers is no fun in Britain. In Ireland, it remains a nightmare.

At Trinity Mirror’s nationals, the worst recession in living memory feels like a blip

Posted by Peter Kirwan on 4 March 2010 at 13:08
Tags: Associated Newspapers, News International, Trinity Mirror

Some news organisations have had a half-decent recession. Trinity Mirror’s nationals rank among them.

This morning, Trinity Mirror released its final results for the year to December 2009. Ad revenues at the Daily Mirror and its stablemates fell by 8% during 2009. That’s far less than the chunky double-digit percentage declines that afflicted many broadsheets.

But at tabloids like the Mirror, circulation is more important than advertising. At Trinity Mirror’s nationals, for example, circulation comprises almost two-thirds of overall revenues. During 2009, these revenues held steady at the Mirror and its stablemates, declining by a mere 0.5%.

Add it all up, and Trinity Mirror’s nationals have emerged relatively unscathed from the worst recession in living memory. Overall, revenues declined by just 3.2% YOY to £460m. On the bottom line, operating margins were barely disturbed. In 2009, these declined to 18.2% from 18.7% during the previous year.

It’s hard to call this a recession: it feels more like a blip.

Sly Bailey and her management team will feel good about this performance. The comparison with the Mail and the Mail On Sunday is suggestive.

At Associated Newspapers, home to the Mail and the Mail On Sunday, like-for-like ad revenues fell by 15% during the year to October 2009, and then by a further 11% during Q409. Although it’s hard to make a direct comparison, circulation revenues seem to have fallen more rapidly at Associated, too.

As always, however, there’s a sting in the tail. Readers have stopped buying newspapers during this recession in big numbers.

Between July and December alone, the number of national newspapers sold by Trinity Mirror declined by up to 10%.

Trinity Mirror mitigated these big declines by hiking cover prices. During 2009, the Daily Mirror rose from 40p to 45p, and the Daily Record from 60p to 65p.

But if readers’ willingness to buy newspapers continues to decline at the current rate, an awkward question presents itself.

In a world where the Daily Mail costs 50p and the Sun costs anywhere between 20p and 35p, what’s the most that Sly Bailey can charge for a copy of the Daily Mirror?

BBC Strategy Review promises more, not less, competition for newspapers

Posted by Peter Kirwan on 3 March 2010 at 14:59
Tags: BBC, Media

I love the BBC, but I tend to worry about it a lot.

On p70 of Mark Thompson’s Strategic Review, I found the kind of evidence that supports my fears. The paragraph that gripped me refers to the future of BBC Online. It goes like this:

There will be no specialist content for a specialist audience, such as business-critical information in specialist fields, legal, financial (including trading tools) or other professional content.

Whoa. Trading tools? Specialist legal and financial content? Business-critical information? The idea of the BBC becoming a large-scale B2B publisher is sufficiently bonkers that it should have been suppressed violently the minute it surfaced in conversation at Broadcasting House.

But no: here it is, incendiary to the last, disclosed in an apparently serious document about the future of the BBC.

This is the kind of thing that makes you wonder about how far the BBC’s ambitions ran at the high point of the Long Boom. It also makes you wonder about how the Strategy Review will change the balance of power between the BBC and commercial rivals who largely make a living from the written word.

Much remains to be clarified. But here is what Mark Thompson is promising:

• BBC Online’s budget will be cut by 25% by 2013, “with a corresponding reduction in staffing levels”

• BBC Online will cut “whole categories of online activity such as web search, communications and non-content related social networking”.

• The number of sections on BBC Online ( ‘top-level directories’, in the form of bbc.co.uk/sitename) will be halved by 2012, with many sites closed and others consolidated. There will be far fewer bespoke programme websites.

• “Removing generic content [from BBC Online] in areas such as the Recipe Finder and /film.

• BBC Online will feed more traffic to the nationals: “by 2012, an external link on every page and at least double the current rate of ‘click-throughs’ to external sites”

• Local BBC sites in England restricted to news, sport, weather, travel and local coverage of national projects like Coast and A History of the World in 100 Objects. The BBC “will not provide listings, local guides or similar feature material”.

• “Leaving room for local newspapers and others to develop in a digital world by keeping the BBC’s current pattern of local services, and not launching new services in England at any more local a level than today.”

Potentially, there’s some important stuff here. Yet Mark Thompson’s Strategy Review also contains what diplomats would describe as “red lines”. These are fundamental points of principle from which the Corporation will not budge.

News is non-negotiable. As the BBC’s own research demonstrates, taxpayers want the Corporation to generate news more than anything else. The graphic reproduced at the top of this post –- extracted from the Strategic Review — underlines that fact.

Although the researchers asked respondents what they wanted from the BBC on their television sets, the BBC regards online as an indivisible part of the whole. On p33 of the Strategy Review, directly beneath the graph I’ve reproduced here, Thompson’s document contains the following words: “Content delivered via digital platforms is a vital part of this story.”

Elsewhere, the language is stronger. Consider, for example, the Review’s (eminently sensible) suggestion that the web “may [become] the only platform and delivery system that the BBC needs to fulfil its public purposes”. When it comes to the clash of civilisations between TV, text and audio, the BBC intends to be a fully-committed combatant.

Indeed, if all goes according to plan, the BBC’s Great Reprioritisation should intensify competition with private sector news organisations. Take a look, for example, at these priorities, laid out for BBC news journalism across all media:

• Stronger specialist analysis of science, the environment and social affairs

• More business coverage (local and global)

• More international news

• More coverage of local UK politics (”multiplatform coverage of local government and politics through Democracy Live”)

Specifically, for BBC Online, the report promises:

• “More prominence” for audiovisual content, original journalism, expertise and analysis

• Better quality local news websites

• “Stronger” consolidated “knowledge” output in areas like Nature and Music

• BBC News Online to focus “on a generalist, not specialist, audience”

• Entertainment news to become “more serious and concise” with stronger coverage of the media industry, culture and the arts

That’s some shopping list. Consider, too, the hint (on p50) that many of the redundancies at BBC Online will affect technical staff, rather than journalists. (The job cuts, we’re told, will partly reflect “the growing maturity and commoditisation of web design and technology”).

Notably, too, many of the sub-domains earmarked for closure provide readers with entertainment, rather than news. Rival publishers will find it hard to get excited by the prospect of sites like /robinhood being “consolidated under larger audience-facing propositions”. (p49).

So the basic conflict, sharpened by recession, still exists. It’s unlikely to ever be resolved. On the one hand, commercial publishers argue that the BBC is crowding them out of the market. On the other, the BBC argues that taxpayers want it to provide news more than anything else.

At first, the BBC’s Strategy Review looked like a retreat under pressure. But a steely bureaucratic determination runs through the core of this document. Where it matters most, the BBC will not be moved and may even succeed in upping its game.

Mr Thompson plays a blinder: Outrage over BBC cuts spells trouble for the Tories

Posted by Peter Kirwan on 2 March 2010 at 16:37
Tags: BBC

At both the Guardian and the Daily Mail, readers are outraged by Mark Thompson’s plans to prune the BBC’s output. It might not feel like it, but this is excellent news for the Corporation.

Finally, the BBC has achieved its aim: it has moved ahead of the curve in terms of anticipating a Conservative government’s actions. In doing so, Thompson has incited satisfied viewers and listeners to come out and fight — on message boards, Facebook and Twitter.

In response, Vaizey’s conversion to the joys of 6Music feels significant. His admission that he “strongly suspects 6 Music will be saved” hints that an incoming Conservative administration might also bend in the face of protest.

It’s telling, too, that the main sources quoted in coverage at the Times and Mail today are those of union leaders decrying the job cuts.

Jeremy Hunt, the shadow culture secretary, seems to have adopted a low profile, cropping up merely to insist upon “actions, not words”. Hunt’s tone suggests that the Cameroons are distinctly unamused.

This wouldn’t be surprising. With the NHS off-limits, the BBC had started to look as if it would become a post-election punch bag for the right of the Conservative party. Yet Thompson’s proposed cuts have left a hardcore of anti-BBC ideologues looking isolated.

Late last week, the Times argued in a leader column that Thompson needed to do “much more than axe a few radio stations that no one has ever listened to and websites that few have ever visited”. No doubt the onslaught mounted by Twittering fans of 6Music caught the Times’s leader writer by surprise.

The confusion among the ranks of the BBC’s enemies will prove temporary. But this episode will have reminded them that a significant majority of the population likes the BBC. Last September, for example, 77% of respondents to an ICM poll agreed with the suggestion that that the BBC is “a national institution we should be proud of”. (As Andy Beckett points out at the Guardian, this compares with 68% in 2004).

So far, Mark Thompson has encouraged just a few tens of thousands of these voices out into the open. The effect has been remarkable. All of a sudden, the BBC’s ideological opponents risk being cast in the role of playground bullies — hardly the most desirable meme of the moment.

Weirdly, the BBC and its director-general are playing a blinder.

Manchester Evening News: Did GMG invest in “things that matter”?

Posted by Peter Kirwan on 11 February 2010 at 15:39
Tags: Guardian Media Group, Media, Trinity Mirror

Over at t’other place, newsquestslave casts a critical eye on yesterday’s post comparing GMG and Trinity Mirror as owners of the Manchester Evening News.

(S)he takes issue with my suggestion that GMG invested steadily in its regionals during the late noughties, even as revenues and profits declined.

1) Operating expenditure isn’t everything

I looked at GMG’s track record in terms of operating costs (wages, rent, print contracts etc). But newsquestslave suggests another dimension:

“There is no ‘investment’ as in new capital raised from shareholders - as there hasn’t been anywhere in the regional press for decades.”

The argument seems to be that GMG’s regionals were just as bad as everyone else in this respect.

But newspaper companies generate lots of cash: this is one of the reasons so few have gone bust during the recession. It’s very rare indeed for them to ask shareholders for additional capital. Johnston Press did it in extreme circumstances, to pay off debts. But elsewhere, even the huge investment in new printing presses that’s taken place in recent years has been financed out of cash flow and debt.

In any event, you’d be hard-pressed to locate shareholders who would hand over new capital to finance operating expenditure (in the form of money to hire more journalists, for example).

On this basis, criticising newspaper companies for not raising more capital from shareholders is a red herring.

By looking at operating costs, I was trying to narrow the focus to factors that affect the quality of journalism on a day-to-day basis. It still think this is a valid way of looking at GMG’s track record as a regional newspaper proprietor.

2) What did GMG’s regionals spend all that money on?

Here, newsquestslave offers two arguments:

Given that things like newsprint have gone up in price, and that GMG regional has squandered cash on the Channel M disaster and other ego projects the investment/spending in the things that matter to newspaper readers, ie newspaper editorial, have declined sharply.

On “disaster/ego projects”: yep, it’s certainly possible that GMG chose to spend money on the wrong things. Yesterday, I suggested that this might have been the case. Of course, lots of companies do this. It’s called risk-taking. The question is whether GMG took more risks, or worse risks, for longer than its rivals.

On paper costs, Newsquestslave has a point. Buying paper accounts for 15%-20% of costs at a typical newspaper. So even though GMG maintained operational expenditure between 2004-2009, the rising cost of newsprint probably did squeeze out some investment in journalism at GMG’s regionals. Yet rising paper costs were a common factor for everyone.

That said, Newsquestslave’s points did make me backtrack on the numbers I dug out yesterday. I wanted to see whether I could reinforce my argument.

So today, I’ve got two graphs for you. The first is identical to yesterday’s effort. It shows how operating costs remained fairly static at GMG’s regionals as profit (and revenues) declined between 2004 and 2009.

The second graph shows how Trinity Mirror’s managers responded to declining profitability in a very different way. Trinity Mirror squeezed operating costs in a way that GMG simply didn’t, or couldn’t. On this basis, I stand by the suggestion I made yesterday:

GMG’s exit from the market is worrying for anyone who believes that sustained investment by large companies with deep pockets is the only thing that will save local journalism. The numbers suggest that GMG has been there, done that — and met with little or no success. The notion isn’t yet dead: but it has sustained serious damage.

As I hinted earlier, there’s one proviso. Did GMG’s regionals take too many risks? If more had been invested in “newspaper editorial”, and less on peripheral projects, would things have turned out differently?

Could the Manchester Evening News have remained a viable part of Guardian Media Group? Was Channel M responsible for that not happening? Some, including AndrewT23at Media Guardian, have suggested that this was the case:

As for GMG having to support a regional title, the MEN is still very capable of making money, even for a cash sieve like the Guardian, but saddling it with the basketcase TV channel that is Channel M was just too much.

If you look around the MEN newsroom at present you can see the damage caused by making a profitable regional newspaper prop up a vanity project TV station and, indeed, The (non Manchester or Northern) Guardian.

If you’ve got a view, leave a comment below, or send me a suitably anonymous email here:mediamonied@googlemail.com

Footnote: On the Trinity Mirror graphs, you’ll note a few asterisks. For the detail-oriented among you, here’s what they mean:

* = adjusted retained businesses

** = operating costs assumption for 2009 = 2 x 1H09 operating costs (reality will be lower).

GMG & The Manchester Evening News: “C’est magnifique, mais ce n’est pas la guerre”

Posted by Peter Kirwan on 10 February 2010 at 13:19
Tags: Guardian Media Group, Media, Trinity Mirror

A few kind souls at Hold The Front Page are predicting what awaits employees of Guardian Media Group who will soon start working for Trinity Mirror:

“For those who thought [GMG Regional Media chief executive Mark] Dodson was a ruthless hatchet man, you ain’t seen nothing yet…”

“God help them….If they think they’ve been squeezed in the past, wait til TM get their mitts on them, then they will understand that it is possible to get blood out of a stone.”

Among other things, the perception that GMG’s regionals have already been “squeezed” by a “hatchet man” feeds into the suggestion that the Manchester Evening News and its stablemates have been plundered relentlessly to sustain outsized losses at the Guardian and the Observer.

Ratcheting up the rhetoric a notch or two, Ian King, at the Times, even suggests that “for many MEN staffers, the new owners could scarcely be worse than the old ones”.

The news coverage certainly suggests that cost cutting became endemic at GMG’s regionals during the late noughties. Disputes over job losses flared up repeatedly as revenues declined: in 2006, 2007 and again in 2009.

Yet the numbers in GMG’s annual reports suggest a different picture. Remarkably, GMG held operating costs at its regional newspapers static between 2004 and 2009. Year after year, as revenues and profits declined, GMG carried on ploughing the same amount — more than £100m a year — into reporting, presenting and distributing the news at its regionals.

The contrast between steady investment and the downward trajectory of operating profits during the same period is painful. (In the graph accompanying this piece, I’ve rebased both sets of numbers to 100 as of 2004 to make comparison easier).

GMG’s exit from the market is worrying for anyone who believes that sustained investment by large companies with deep pockets is the only thing that will save local journalism. The numbers suggest that GMG has been there, done that — and met with little or no success. The notion isn’t yet dead: but it has sustained serious damage.

Did GMG simply invest in the wrong stuff? Or were GMG’s regional journalists living in a relative paradise? I suspect that the commenters at HTFP are probably closer to the truth than the deputy business editor of the Times. Working for Trinity Mirror will be a whole lot different.

Bosquet, the French general, famously described the charge of the Light Brigade at the Battle of Balaclava in 1854 in the following terms: “C’est magnifique, mais ce n’est pas la guerre”.

No doubt Sly Bailey, the chief executive of Trinity Mirror, thinks similarly about GMG’s recent track record as regional newspaper proprietor.

£7m for the Manchester Evening News: Carolyn McCall isn’t related to the Barclay brothers

Posted by Peter Kirwan on 10 February 2010 at 01:17
Tags: Guardian Media Group, Johnston Press, Trinity Mirror

For most Britons, the Blair-Brown boom reached a peak in early 2008. Yet as always, the news business was ahead of the game. For most publishers, revenues hit an all-time high during 2004-2005.

One deal, in particular, signalled that we had reached the peak.

In December 2005, Johnston Press bought Scotsman Publications from the Barclay brothers for £160m. This astonishing sum represented 2.5 times the revenue generated by The Scotsman, Scotland On Sunday and the Edinburgh Evening News during the previous year.

Half a decade later, what’s to be said about Guardian Media Group’s decision to sell its 32 local newspapers to Trinity Mirror?

If GMG had sold out to Johnston Press in 2005, it might have hoped for a price tag of over £300m (on the basis that its regionals generated revenues of £128m the previous year).

Today, however, GMG is selling its regionals for £7.4m in cash.

Some will criticise GMG for not persisting with its stricken cash cow. Others will allege an excess of sentimental attachment to the Manchester Evening News.

But let’s not get too aggressive, or too dewy-eyed. It’s worth remembering that GMG’s regionals delivered nearly £90m in operating profits between 2005 and 2008. If we’re going to compare today’s thin-looking deal with what might have been possible in 2005, we’ll need to make allowances for that £90m.

In addition, as part of today’s deal, GMG finds itself relieved of the contractual need to pay £37.4m to Trinity Mirror to print the Manchester Evening News.

This represents a real-world benefit for GMG, which continues to eat through its cash reserves in a manner that calls to mind Morgan Spurlock consuming Quarter Pounders in Super Size Me.

So add it all up: in total, GMG has made a return during the past five years of something like one times its regional newspapers’ current annual revenues (and more if you make allowances for not having to pay MEN’s print bill in the future).

This isn’t the kind of coup that will see the board of GMG elected to the deal-makers’ hall of fame alongside David and Frederick Barclay. But it isn’t that bad, either.

Will the Guardian and Telegraph play nice again?

Posted by Peter Kirwan on 5 February 2010 at 14:28
Tags: Guardian Media Group, Telegraph Media Group

The ongoing spat between the Telegraph and the Guardian has been entertaining. But I wonder whether it might be drawing to a close.

In recent months, the Telegraph has become deeply interested in the Guardian’s financial performance, variously describing this as “grim”, “disappointing”, and “disastrous”.

The Guardian’s apparent inability to impose compulsory redundancies on editorial staff has become a favoured theme. In early December, the Telegraph spoke to one unnamed insider at GNM who described “highly-paid” staff journalists immune to compulsory redundancy as “bed-blockers”.

Another Telegraph story suggested that GNM employs so many editorial staff that “one features writer is reputed not to have had his name in the paper for more than a year”.

To be sure, Telegraph Media Group makes profits and Guardian News & Media makes losses – thumping great big losses. But why is the Telegraph so preoccupied with an unquoted rival whose fate doesn’t matter to investors reading the paper’s business pages?

Perhaps the answer lies in the pages of Media Guardian. In late November, Media Guardian ran a piece that portrayed Tony Gallagher, the Telegraph’s new editor, as the kind of Mail executive who destroys professional opponents after breakfast and eats their body parts for lunch — with fava beans and a nice Chianti.

Awkwardly, the piece suggested that Gallagher, during his long career at the Mail, hadn’t been averse to doing “all the things that the PCC wouldn’t allow you to do now”. One unnamed source told Media Guardian: “I can’t think of anyone in our profession that I would least like to cross the threshold of my home.”

Elsewhere, at the Observer, in early December, Peter Preston offered his best wishes to Gallagher, before going on to argue that the Telegraph’s “perpetual”, “slithering” circulation decline has been a problem since the late 1960s. The implication was that Murdoch MacLennan’s modernization project is pointless.

Sadly, the fun may be about to end. An unnamed source — yes, another one – insists that the Guardian “has no desire to compete in a tit-for-tat way” with the Telegraph.

Is that an olive branch being extended to the Telegraph? Coincidentally, Carolyn McCall, the chief executive of Guardian Media Group, gave an interview to the FT this week in which she suggested that GMG is coming “out of the recession very strong”.

“Yes we have made redundancies,” said McCall, “yes we have got the cost base down to where we want it now. . . They have done it, the GNM management are so on track. The Guardian is in good shape.”

Cumulatively, this sounds like an effort to draw a line beneath damaging coverage of the Guardian’s financial performance.

Whether the Telegraph takes the hint remains to be seen.

Times Online: Supporting the big profits of pay TV

Posted by Peter Kirwan on 2 February 2010 at 23:49
Tags: BSkyB, Media, News International

So Times Newspapers has just hired Paul Gilshan from BSkyB as marketing director. Gilshan was previously head of marketing for Sky Movies and Sky Box Office. At Wapping, Media Week notes, Gilshan will be reunited with his former boss Alex Lewis, who was a director of marketing at BSkyB before moving across to Times Newspapers last year.

Another significant (and much-noted) arrival at Wapping: Gurtej Sandhu, who is joining as director of Times Digital from News Corp-owned Star TV.

Down under, the trends seem similar: Richard Freudenstein, whose CV includes a seven year stint at BSkyB, has just been made chief executive of The Australian.

The influx of pay-TV types is striking. Of course, there’s an existing line of thought which suggests that paywalls around the Times and the Sunday Times will be engineered to boost print sales as much as anything else. (Buy a newsprint subscription and get access on t’internet for free.)

But what if the cordon was thrown wider? Peter Preston may have a point when he suggests that BSkyB could be brought into equation.

Now watch closely as 12 million Sky subscribers get an offer they can’t reasonably refuse. How about beyond-the-wall access to four big British papers (plus an array of tempting other goodies) for as little as 50p extra a month? £6m a month for that is £72m – in a trice the losses on Wapping’s more upmarket offerings are turned to profit. . .

This is an interesting idea. It would certainly enhance the attractiveness of Sky for subscribers who might be lured away soon by cheaper footie elsewhere. In addition, News Corp could bolt on newspaper subscriptions for a triple-play subscription offer (Sky/newspapers/online access).

Sky has been selling consumers a triple-play of its own (broadband/telephony/pay TV) for quite a while: the executives making the switch to Wapping know all about the fiddly mechanics of maximising profits in this kind of environment.

But if News International goes down this route, what price the coalition of national newspapers that Murdoch wanted to assemble last year?

That plan is dead in the water. It’s no coincidence that Murdoch’s thinly-veiled appeals for a concerted uprising against the free web have died away.

The Guardian can’t see how the economics stack up (no surprises there, if the missing ingredient is 12m viewers). The Telegraph has all but ruled itself out. DMGT has maintained a studied silence. Trinity Mirror might follow News International, but only if convinced by results on the ground.

A subscription link between Sky and News International would be designed to limit the risks of a go-it-alone policy. Harnessing the huge popularity of Sky might well make the unpalatable idea of paid content acceptable to the general public. (And for rivals, doing deals with Virgin Media or BT Vision really wouldn’t be the same).

But 50p a month: surely that’s too little? Selling online access to the Times and the Sunday Times at something like that price would cannibalize print copy sales just as rapidly as free access on the web.

Perhaps the low price point owes something to Preston’s inspiration: Newsday, owned by the same company that sells cable TV and broadband to 75% of Long Island’s subscribers. Late last year, Newsday erected a $5-a-week paywall. But it offered free access to customers of the parent company’s cable and broadband operations.

The parallel isn’t straightforward, though. Newsday’s paywall might as well have been accompanied by a suicide note declaring that the paper had no value other than as a gimmick intended to sell something else. Times Newspapers Ltd may be losing north of £1m a week, but its position is slightly different.

Still, leveraging what you’ve got makes sense. Cross-selling TV and news subscriptions would involve giving Murdoch’s newspapers – unloved by investors – a new purpose in life: to support the profitability of pay TV.

Circle the wagons and find some new and unexpected synergy: it’s a classic media conglomerate tactic. If successful, It might even help to convince News Corp’s investors that owning both newspapers and a pay TV platform remains a sensible idea.

Which newspaper bosses will oppose safe harbour for search engines?

Posted by Peter Kirwan on 12 January 2010 at 16:13
Tags: Media, News International, Telegraph Media Group

Our unelected upper chamber is going to work on Lord Mandelson’s Digital Economy Bill, which resumed its second reading in the House of Lords today.

Ralph Palmer, the 12th Baron Lucas and 8th Lord Dingwall (a.k.a. Lord Lucas) has tabled a string of amendments to the Bill. Cumulatively, they suggest ambitions that stretch beyond this peer’s day job as editor and proprietor of The Good Schools Guide.

Most of Lord Lucas’s amendments (and there are a few of them) sound like sensible attempts to blunt the more extreme impulses of the music business.

Lord Lucas has described the major labels as a “powerful, monopolistic” industry that “seeks to punish [consumers] before thinking of how to serve them better”.

Interestingly, the Tory peer is also proposing what sounds like a British equivalent of the “safe harbour” rules that protect search engines from news organisations launching copyright lawsuits in the US.

Specifically, Lucas proposes “a standing and non-exclusive license” that would protect search engines when they “copy of some or all of the content” on web sites and display them in search results.

Here, too, Lucas seems to be siding with the independent little man (in the shape of Google and the web surfing public) against “powerful” (if not quite monopolistic) media barons like Rupert Murdoch and Gavin O’Reilly.

On this basis, we were intrigued to see that the Lords’ Register of Interests lists Lord Lucas as a “significant shareholder” in Archant.

Can we therefore expect that Adrian Jeakings, the recently-appointed chief executive of Archant, will become the first British newspaper boss to state publicly that Google’s use of extracts in search results really isn’t a problem, after all?

Perhaps Murdoch MacLennan, the chief executive of Telegraph Media Group, will emerge to support him.

Certainly, Lucas’s amendment seems to have gone down well at the Telegraph Media Group, which remains famously friendly with Google.

Ian Douglas, the paper’s head of digital production, calls Lucas’s amendment “brilliant”, arguing that it will save “ill-advised newspapers” from spending millions of pounds on suing Messrs Brin, Page and Schmidt.

Equally, if Lucas’s amendment is approved, it remains unlikely that Google-hating newspaper bosses will remain above the fray. The chances of a lawsuit materialising has always been small: but the threat of launching one remains useful.

No doubt this thought has already occurred to lobbyists who ply their trade on behalf of Rupert Murdoch in and around the Palace of Westminster.