'Farewell To The Flesh': A Digital-Only Future for The Independent newspaper?

This week’s takeover of ailing UK newspaper The Independent by Russian oligarch (and ex-KGB man) Alexander Lebedev has certainly got tongues wagging. The parlous state of the newspaper was certainly made all too clear when it was announced that it had been sold to Lebedev for a mere £1.00 (and a £9.5 million ‘Golden Goodbye’ from former owners Independent News & Media, in exchange for taking the paper’s liabilities off its hands).

So what next for the paper? Rumours that it will be given away free like Lebedev’s other newspaper, The London Evening Standard, continue, despite its new owner apparently assuring Prime Minister Gordon Brown that it won’t be.

Yet what will happen? Certainly Lebedev will invest a considerable amount of money in the paper, not least because his media properties back home in Russia have always had both his wallet and his backing to rely on, though presumably avoiding any conflict with him. Yet whether this will translate into a viable – let alone profitable – newspaper remains to be seen.

As a broadsheet (despite being tabloid-sized since 2003), The Independent sells only 183,547 copies a day, its Sunday edition a mere 155,661. Compare this to its closest rival, given their shared centre left outlooks, The Guardian, with 284,514 a day, or the right wing ‘qualities’ – The Times and The Telegraph – with 505,062 and 685,177 respectively. It is perhaps with good reason that The Sun’s* notorious ex-editor Kelvin McKenzie described this sector as the ‘unpopular press’ – certainly even The Times makes a yearly loss, whilst The Guardian continues to haemorrage money.

It may simply be the case that there are too many titles in an already over-crowded and undervalued sector of the press. A cynical observer may at this point argues that Lebedev’s actions are those of a billionaire oligarch who has just bought an expensive toy, perhaps evidenced by his son, Evgeny, being placed in charge of the operation. Yet this misses one important point – quality journalism costs money and may in fact be economically nonviable in today’s climate. Outside of rich benefactors and public bodies, how else is it to be funded?

This brings us to the online angle. One possibility Lebedev could pursue is to simply close the newspaper’s print arm altogether and focus on its online version, much as the Seattle Post-Intelligencer and Christian Scientist Monitor have already done. This does however still pose problems. Apart from the difficulties of making a profit from advertising alone, the centre left web news market has arguably already been colonised, by The Guardian whose site attracts 20,499,858 unique visitors a month versus Independent.co.uk’s paltry 7,215,928. The TV licence-funded BBC News Online also poses a considerable obstacle – not least with its 350 million page impressions a month. It has better resources, an internationally renowned brand and, some critics argue, a left-wing bias that competes with the Independent’s own similar editorial line. What niche can an online-only Independent occupy?

One suggestion comes from an unlikely source. Libertarian politics blogger Paul Staines, also known as ‘Guido Fawkes’, has always been scathing at what he refers to as ‘The Dead Tree Press’. Yet he also seems to have an attachment to The Independent – going so far as to suggest the paper should go completely digital and become moderate conservative, but also embrace technology the other newspapers have so far not explored – namely an application that allows it to be read by iPhone subscribers, an option Staines sees as a possible financially viable future for print media. Though, perhaps simply by dropping out of print altogether, The Independent could both save a small fortune and provide some room for the other broadsheets to expand into.

If not, then there is the possibility that The Independent may simply fade away, as other UK newspapers such as The Daily Sketch and The Sunday Correspondent** have done. A sometimes innovative newspaper’s final legacy may be that it is the first major UK casualty of the post-print age.

* The Sun’s present circulation is 2,972,763 – almost five times as much as The Telegraph, which is the UK’s most popular broadsheet.

** This publication closed down in 1990 with a circulation of 149,241 – dangerously close to The Independent’s present circulation.

The business model for news is and always has been broken and Rupert Murdoch can't fix it

In his remarks to the Federal Trade Commission’s hearings on Journalism and the Internet, held at the beginning of this month, Rupert Murdoch made some characteristically bold statements about his views on the future of journalism.

In Murdoch’s world, the new model of journalism is one where people pay for journalism online.

Murdoch said: “In the new business model, we will be charging consumers for the news we provide on our Internet sites. The critics say people won’t pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don’t get something for nothing.”

Murdoch is right when he asserts that the old model based on classified advertising is a failure, but he is wrong to suggest that people will actually pay for news. They never have paid for general interest news – not really, anyhow – and there’s little to suggest that this historical precedent will change.

Murdoch is sitting pretty because he can charge for specialized content. His mix of financial news brings a product to a specialized audience that couldn’t get this information elsewhere. Other financial news outlets remain similarly well-positioned, such as Bloomberg and Reuters, where information provided really does equal financial decisions.

But general interest news faces a different reality. As far back as Walter Lippmann, writing in Public Opinion, it was abundantly clear that news readers were fickle and not willing to pay for news.

It’s worth noting in-depth the astute observations Lippmann made that are still relevant today.

“Nobody thinks for a moment that he ought to pay for his newspaper. He expects the fountains of truth to bubble, but he enters into no contract, legal or moral, involving any risk, cost or trouble to himself.”

“He will pay a nominal price when it suits him, stop paying whenever it suits him, will turn to another paper when that suits him. Somebody has said quite aptly that the newspaper editor has to be reelected every day.”

Lippmann’s words are increasingly relevant when it is not just newspapers competing for the attention of fickle customers but a wide variety of blogs and aggregators and personalized RSS feeds that scan news. If one newspaper starts charging, another newspaper source can easily be found that does not. The observation that in a competitive news environment, brand loyalty is a misnomer is an important one – especially now.

Lippmann makes some other key distinctions worth mentioning about the attitude between the reader and his news source. First, readers believe that news should be free, “supplied gratis” and that readers “expect the newspaper to serve us with the truth however unprofitable the truth may be.” In other words, don’t look to readers to start paying for expensive investigative stories.

Maybe the dearth of investigative news will continue to inspire public radio-style donations for Spot.us to continue to produce crowd-funded journalism. But Lippmann was careful to note that most people don’t think of journalists in the same category as they do other institutions, such as public schools, law, medicine, religion, or engineering, for example.

In journalism, the business model works like an anti-business as far as the news organization is concerned, since the reader pays for the product below cost. Readers also expect journalism to be held to the ethical standards of journalism is compared ethically along with a church or a school.

But a church is supported by collection and subsides, and schools supported by the taxpayer or tuition fees, so people are paying, in a sense for a product. And, Lippmann argues, you can’t compare journalism to law, medicine or engineering, because the consumer is actually paying for the service.

As Lippmann smirks, “A free press, if you judge by the attitude of the readers, means newspapers that are virtually given away.”

The business model is broken, we know that. And it’s always been broken – as far as the reader has been concerned – no reader has ever paid for their full share of what it takes to actually produce that day’s newspaper. And now we give content away for free.

So therein lies the dilemma – we expect the truth to come for free, but it comes at a price. And without anyone paying for the truth, how will it be delivered to news consumers?

[Editor’s note: OJR will not publish on Friday, due to the Christmas holiday. But we will be back next Wednesday.]

No! to newspaper bailouts

A. Michael Noll is Professor Emeritus of Communications and former dean at the Annenberg School for Communication and Journalism at the University of Southern California. He writes in response to American government: It’s always subsidized commercial media.

There will always be a need for the reporting of current events, but because of the Internet, journalism is undergoing revolutionary change in terms of how news is distributed and accessed. Conventional newspapers are thus in crisis, and there are some who propose a Federal bailout. No way!

Back in the 1980s, a couple of newspapers investigated the prospects for electronic information through a service known as videotex.1 I was involved while working at AT&T with the planning of a trial of videotex jointly conducted by AT&T and Knight-Ridder Newspapers in Florida. AT&T and Knight-Ridder correctly saw the coming of a day when news and information would be accessed and obtained electronically over telecommunication. However, the use of the home TV set for display and the concept of a single large centralized database of information were all wrong – and videotex ultimately failed.2

After the failure of videotex, newspapers became smug and mostly ignored the coming of the Internet. They did not seem to realize that although much of their profits came from classified ads, this was exactly the kind of information that could best be obtained on-line over the Internet. When they finally woke up, it was too late.

Newspapers also seemed unable to determine how to charge for on-line access. Thus many newspapers offer today’s news for free over the Internet, but charge for past articles – thus implying that they place no real value on today’s edition.

Access of music over the Internet – such as the Apple iTunes store and Amazon – proves that consumers are willing to pay, if access is easy and relatively inexpensive. This model is now being extended to books and magazines, using such products as Amazon’s Kindle and Apple’s iPhone. Will on-line journalism soon follow? Will a new breed of electronic on-line journalism evolve? Will conventional newspapers on paper disappear?

The response of many newspapers to Internet competition has been to fire journalists, reduce the size of the paper, and increase prices. At this rate, they will ultimately be printing one paper at a price of a few $100,000.

Technology is one factor that shapes the future, shaped by the needs of consumers and what makes good economic sense. Old industries evolve, and some which are unable to adapt, die. But Federal bailouts of dying industries only delay the inevitable and impede progress.

1 “A Bell System View of Videotex,” (with Dennis J. Sullivan, Jr.), Telecommunications Policy, Vol. 6, No. 3 (September 1982), pp. 237-241 and “Teletext and Videotex in North America: Service and System Implications,” Telecommunications Policy, Vol. 4, No. 1 (March 1980), pp. 17-24.

2 “Videotex: Anatomy of a Failure,” Information & Management, Vol. 9, No. 2 (September 1985), pp. 99-109.