Will the last unindicted Sun journalist please turn out the lights?

February 11, 2012

A News International spokesman tells us Sun editor Dominic Mohan is “not resigning” in the wake of 5 more high-profile arrests of his senior colleagues.

Well, thank goodness for that. Someone has to be there to switch off the lights, and there now seem precious few editorial staff of any standing who aren’t on bail, or facing the threat of arrest.

The climate of fear at The Sun is, it would seem, being deliberately intensified by the police, in the hope of breaking NI’s culture of omerta and persuading more witnesses to squeal on each other. What other interpretation can be placed on police commander Sue Akers’ decision to organise the two waves of arrests, a week apart, as high-drama “dawn raids”, timed to coincide with Sunday newspaper interest? Whatever these men may or may not have done, they are not gun-runners, drug-traffickers or international terrorists. So why the heavy-handed police choreography, if not to a) impress the public that the police are at last getting tough on corruption and to b) create maximum distress among the people at NI?

As the web of alleged corruption spreads to more police officers, the army and the ministry of defence, it has emerged that Rupert Murdoch will be making a special pilgrimage to The Sun offices to personally reassure its staff he will not be doing unto them what he earlier did to their colleagues at the News of the World.

Maybe not, for now. But one thing I suspect we won’t be hearing much of from here on is Son of NoW, the Sun on Sunday. The Sun is a broken brand.

The latest wave of arrests will also put pressure on other parts of The Sun’s ultimate owner, News Corp. It could turn the screw on a Federal investigation into alleged racketeering. And, nearer home, it will surely rekindle calls for an investigation into News Corp being a fit and proper holder of a TV licence. Should BSkyB’s share price be seriously depressed as a result, you can be sure that – for all their stalwart support of James Murdoch up to now – the board will have no compunction in firing him as chairman.

UPDATE 18/2/12: First, some humble pie. “One thing we won’t be hearing much of from here on is the Son of NoW, the Sun on Sunday”. Er, no. Rupert Murdoch has just given his personal assurance that the launch will go ahead “very soon”. Industry experts believe this means some time in April, possibly the 29th.

However, what may play well with demoralised Sun staffers is not guaranteed to be a publishing success. Particularly if more distracting scandal damages the Sun brand in the meantime. And who, given the unbridled brief of the MSC to cleanse the Augean Stables at News International, can say it will not?

Labour MP Chris Bryant, who has been leading the anti-hacking campaign in parliament, neatly expresses the commercial paradoxof an SoS launch: “He (Murdoch) is meant still to be ‘draining the swamp’ and yet the swamp is meant to produce another newspaper.”

As it happens, Murdoch seems to have lost his sureness of touch in the realm of newspaper launches. His foray into the London freesheet market, with thelondonpaper, certainly did financial damage to Associated Newspapers, owner of London Lite and (at that time) the paid-for Evening Standard. But News International lost heavily on the project and eventually had to close it down.

The SoS will be launching into a rapidly declining market. Ad revenue was down over 17% last year (end of January) and – even stripping out the now-folded News of the World – the underlying slide was 11%. Readers are deserting too. And their contribution, in the form of circulation revenue, is even more vital to mass-market tabloids than advertising. The only way in, it would seem, is a price-war. That may well damage the SoS’ prime adversary, the Sunday Mirror. But whether it will create a financially viable Sun on Sunday is a moot point.

Alexander Lebedev’s i-opener

October 19, 2010

Say what you like about Russian oligarch Alexander Lebedev’s approach to newspaper economics, you have to admit that he leaves no publishing model unturned. And knows how to spring a surprise.

With dizzying speed, he has acquired control of The Evening Standard, doubled its guaranteed circulation and turned it into a freesheet – just when everyone else was getting out of afternoon freesheet London newspapers. Then gone on to buy the ailing Independent for £1 while pocketing a £9.5m sweetener. And now he’s hatched i – billed (admittedly by himself) as the first innovation in quality newspapers for 25 years.

i? It’s a minuscule version of the Independent – a bit like The Week: but cheaper, at only 20p, and also daily, from Monday to Friday. There’s no new content apart from “some small unique stuff around the edges”, according to PaidContent. Which will obviously be one factor in keeping costs down; another being that it will be overseen by Simon Kelner, already editor-in-chief of the Independent and Independent on Sunday. On the other hand, keeping costs down is not really what it’s about. A circulation of 400,000 has been suggested; and given that it is a paid-for title, distribution overheads are unlikely to be negligible. We’re also told that a substantial outdoor campaign, devised by Beattie McGuinness Bungay, will back the launch.

So this is no trifling brand extension of the Independent. But what exactly is it? Andy Mullins, managing director of the Independent, tells us “it’s for time-poor newspaper readers, and especially commuters” who “just don’t have the time to read a quality newspaper on a regular basis.” The key words here are “commuter” and “quality”. In other words, Lebedev appears to be bidding for the young, upmarket audience abandoned by London Lite and The London Paper with an offering that does not insult their intelligence.

But do we really need another title targeted at upmarket Londoners? After all, most of the Independent’s readership is concentrated within the M25 area, of which London comprises by far the biggest portion. And, as if this were not enough, surely the free Standard is serving some of those commuter needs?

All right, points can be made in favour of further market segmentation. i will be available in the morning, whereas the Standard is an afternoon read; moreover it purports to be aimed at a slightly higher demographic. But even after making these allowances, cannibalisation of Lebedev’s existing readers seems likely to be the inexorable by-product of his latest launch. Why risk it in the first place?

One theory is that it will provide camouflage for a routed Independent, whose fully-paid circulation has already plunged below 100,000 in the UK and Ireland. Another is that we should take Lebedev at his word: he really does have a passion for newspaper publishing that far outweighs concerns about its immediate commercial viability.

It’s easily forgotten just how unlike any other UK newspaper publisher Lebedev is. It’s not so much his wealth – though that’s substantial enough at an estimated $2bn – as where it comes from that sets him apart. Essentially he’s a financier and industrialist (indirect interests include Gazprom and the aircraft-leasing company Ilyushin Finans) who aspires to be a politician in a way that only a Russian could be. In 2008, for example, he set up the Independent Democratic Party of Russia with former Soviet Union supremo Mikhail Gorbachev (who co-owns Lebedev’s liberal Russian newspaper, Novaya Gazeta). The following year he attempted to run for mayor at Sochi, which will host the 2014 Winter Olympics, but was disbarred. Underlying it all is a tough blend of Yeltsin-era oligarch (one of the few who hasn’t been incarcerated, dispossessed or sent into permanent exile, that is) and Putin-era silovik (ex-KGB officers, who are effectively Russia’s governing class). In other words, Lebedev is a pragmatic survivor who takes the long view.

All of which puts his newspaper interests in little old England into perspective. It would be wrong to define them as a hobby; perhaps they should be seen more as a bolt hole if things go horribly and definitively wrong back home. In the process of building it, let’s hope he’ll discover how to make money out of the contemporary newspaper.

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