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Telegraph Group joins Gadarene rush with folding of Sunday title into 7-day operation

March 13, 2013

Telegraph 7-day operationThe newspaper is dead, and the Telegraph’s decision to merge its daily and Sunday titles into a 7-day-a-week operation is yet another nail in its coffin. Long live the free press.

By “free press” I mean not the plutocratic oligarchy (absent the Guardian and Observer owning Scott Trust) that maintains a diminishing stranglehold over printed national news, but that other sense of free – “free of charge”. The internet, with Google algorithms in the vanguard, is slowly, inexorably, doing what no politician could ever do: it is breaking down the cartel.

No qualitative judgement is made or implied about this being a Good Thing for the advancement of civilised values. Indeed, on balance, it may well be a bad thing. Just as there is no such thing as a free lunch, so there is no such thing as free journalism. If we are all able, in a matter of moments, to find out what is going on by tapping a few words into a search box at virtually no cost who, exactly, is going to pay for the many hours of sweat, journalistic nous and training that went into crafting the news item in the first place?

It’s a conundrum that digital content strategists frequently explain away by reference to the woolly wisdom of “creative destruction”. Darwinian metaphor is highly misleading, however. Paper dinosaurs may well be on their way to destruction. But there is nothing inevitable about the evolution of a genus of fleet-footed digital mammals to take their place. The ways of evolution are multiform, mysterious and rarely linear. While it is entirely understandable that legacy media institutions should present themselves as the natural guarantors of smooth transition, the reality (with the possible exception of such venerable specialist titles as the Financial Times and Wall Street Journal) may be very different. More likely there will be a period of chaotic evolutionary stasis before something commercially semi-vertebrate emerges anew from the economic goo.

I mention all this after briefly reviewing the latest set of national newspaper circulation figures (ABCs). My, how the mighty have tumbled. The Guardian, for example, shed 5.31% in just one month (February) Admittedly this followed a price hike, but the circulation figure is now around 193,586 which – as MediaWeek reminds us – is The Guardian’s lowest headline figure since records began, in 1949. The paper is worried about having breached a psychological barrier, even after sales were pumped by a recent BBH ad campaign. Not so long ago, I seem to remember that psychological barrier was 400,000, not 200,000.

Guardian print circulation may be in freefall, but its trend is by no means atypical. The Sun on Sunday is down nearly 5% month on month, representing a 41% collapse since Rupert Murdoch phoenixed it last year out of the ashes of The News of The World. The Sunday Express has descended below 500,000; The Mirror is barely achieving 1 million; The Sun itself, not so long ago hovering around the 3 million mark, is now gliding towards 2 million. Only the i – a scarcely economic 20p news digest – managed an increase, and that a miserly 1.45% to just shy of 300,000. Those with a head for historical statistics might like to note that its host, The Independent, now boasts a circulation of no more than 75,000. Even The Sunday Times – psychological barrier once 1 million – is now drifting down to 875,000.

In light of this dismal picture, it is no surprise to find The Sunday Telegraph (February ABC: 429,346) huddling closer to The Daily Telegraph (541,036) for warmth. As with the Sun, Mirror and The Independent 7-day operations that have preceded it, the rhetoric of the Telegraph’s transformation is radical and upbeat. The grim reality – and ultimate rationale for the move – is jobs lost. And with them, irreplaceable experience.

Murdoch MacLennanTrue, the headline figure of 80 print jobs out of 550 editorial staff being culled is not the whole picture. It emerges that Telegraph Group chief executive Murdoch MacLennan (left) will offset some of these losses with 50 “new digitally-focused jobs” – including a new position, director of content who will sit over both editors – and inject £8m into his “number one” priority of completing “our transition into a digital business.”

No matter how many time he incants the mantra “digital business”, MacLennan is unlikely – any more than his rivals who have trodden the same primrose path – to extricate his titles from the financial doldrums. The damage to the brand – particularly the Sunday brand – with its more considered, investigative magazine-like approach – is likely to be considerable. The strategic upside, after an initial financial up-tick, on the other hand is doubtful. Expect to see more circulation decline once disappointed Sunday readers reject the graft.

On the face of it, digital global readers, in whose name all this 7-day stuff is being done, look a worthy prize. For a start, there are lots of them. In January, for example, The Telegraph’s website traffic (by no means the most voluminous among newspaper brands) grew 11% over the previous month to 3,129,599 – the sort of circulation figure that no UK newspaper has been able to boast of for a very long time. But it’s fool’s gold. Digital readers are fickle and rather more likely to be driven by search than brand loyalty. Advertisers have recognised this by tightening their wallets. As former Google CEO Eric Schmidt long ago observed, there’s no better way of turning advertising dollars into cents than migrating to digital publishing. Nor, for the aforementioned reason of declining brand loyalty, are paywalls a viable financial alternative. Unlike the customers of banks, digital readers do have a choice. And they’re using it.

On the other hand, senior newspaper management cannot be seen to be doing nothing. They must inject energy and excitement into a task which, increasingly, looks as suicidal as the rush of the Gadarene swine.

How long before The Observer and Guardian – estimated to be losing about £50m a year – follow the same headlong path?

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Bailey Trinity bonanza makes Sorrell’s WPP package look like peanuts – comparatively

May 3, 2012

WPP chief executive Sir Martin Sorrell may not have been best pleased with the publication timing of the latest Sunday Times Rich List.

Just as the awkward information trickled out that he had taken a 60% rise in pay and bonuses last year (£6.18m in 2011, as opposed to £4.2m in 2010), up popped the unhelpful information – tricked out in headline bold – that Sir Martin is the UK’s wealthiest advertising mogul, with a fortune of £174m (up from £148m the previous year) and a personal stake in WPP worth £156m.

A red rag to a bull, you might say. Some of WPP’s shareholders are becoming increasingly cantankerous about such generous settlements, as last year’s hullabaloo at the annual general meeting all too clearly demonstrated. This year’s AGM in June promises similar excitement.

However, Jeffrey Rosen, chairman of WPP’s remuneration committee, can rest easy in his bed. Shareholders, no matter how vociferous, haven’t a prayer of overturning the pay agreement. Sorrell may have an uncomfortable 15 minutes caught in some headline crossfire, but he can adduce powerful arguments he has deserved well of his shareholders. Look at the underlying performance of the company; the bonus element which is in any case increasingly linked to the share price; and – crushing final point – what would shareholders actually do without him?

Alas, Rosen’s oppo over at Trinity Mirror, Jane Lighting – who once headed Five – can expect no such easy ride. Shareholders are baying for her blood after she waved through Trinity chief executive Sly Bailey’s £1.7m pay package, apparently without a murmur of protest.

Why the fuss? After all, £1.7m is financial foothill stuff compared with Sorrell’s £6.18m. But then Sorrell – unlike Bailey – has built a £10.67bn world-leading marcoms business. And  – again unlike Bailey – he has not presided over the systematic destruction of shareholder value these past 9 years.

When in 2003 Bailey joined Trinity, publisher of The Mirror, The People and sundry local newspapers, it was valued at £1.1bn. Today, that valuation is near £84m and dwindling fast. Trinity has not paid a dividend since 2008, and its pension liabilities of £1.7bn now dwarf market capitalisation.

Personally blaming Bailey for the destruction of Trinity would be a bit like blaming Canute for the tide coming in. All said and done, it’s the internet wot done it; and no one else in the newspaper publishing sector has successfully outflanked its effects. But paying her a near-FTSE100 wedge for running a small cap company looks increasingly absurd. All the more so since Bailey has no identifiable long-term solution to Trinity’s plight.

It’s time to move on Sly, maybe to some non-exec roles. I’m sure you’ll be a lot tougher on pay deals than Lighting.

UPDATE 4/5/2012: SLY TAKES THE HINT AND RESIGNS SHOCK! Bailey handed in her notice shortly after share-trading closed last night, once it became clear she faced an unquellable revolt over her pay deal from at least 25% of Trinity’s shareholders. Interestingly, prime among the rebels was Aviva, which is experiencing internal sedition over its own chief executive’s handsome package. It seems Bailey will not exactly be missed by her staff, who have in recent times endured massive cuts to editorial budgets. A journalist at the Liverpool Echo, one of Trinity’s regional newspapers, is reported to have said: “Every time her bonuses were going up we were losing people from the newsroom. We called her the wicked witch of the south.” Apparently, unrestrained whoops and guffaws were to be heard in the Mirror’s offices after the news broke that she was leaving.


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