There’s growing evidence that News Ltd is joining newspaper proprietors in other parts of the world in thinking the unthinkable — and in Australia’s case, I think that may mean taking the company’s metro newspapers free.
Right now, I believe that senior staff at News Ltd are looking at the economics of it.
The evidence is not conclusive — indeed when I put it to Greg Baxter, News Ltd’s director of corporate affairs, last week he flatly denied it.
But four pieces of the jigsaw hint in that direction.
1. The word “free”
Most recently came the comments of News Ltd’s editorial director Campbell Reid, which were broadcast over the Easter weekend. Towards the end of a debate on ABC National’s Saturday Extra programme, he used the word “free”. (It’s worth looking at the transcript, by the way — it was an excellent debate.) He told the audience:
In five years time, newspapers will be significantly altered by the financial pressure of the changing forces in advertising. And some of them will look different, feel different, be thinner, smaller, fatter, wider, come out on different days, be at a different price, potentially be free.
And earlier in the same debate, he said:
I’m not pretending that like the executives at The New York Times, we at News Ltd aren’t lying awake at night thinking about how we get ourselves through not only this economic downturn but a structural revolution, in the way information is consumed.
But can I say this to you: that as we wrestle with these problems at News Ltd, we’ll give up on a lot of things in order to keep our business afloat, but the last thing we’ll give up on is good journalism.
2. The word “reach”
Second, was a conversation I had last week with somebody close to the sales operation of one of the tabloid mastheads. This person’s problem was simple — it’s hard explaining to advertisers why your circulation is 5% less than last year but you want 5% more yield. This person would much prefer to be doing sales on a product that reaches twice as many readers, even if it’s free. For this person, reach will decide the paper’s fortunes.
3. The word “reach” again
Third came last week’s announcement of the mysterious group project director role for Shane Rodgers. Again, it’s possible to over-analyse these things, but chairman’s John Hartigan’s words also included that word reach. The project or projects marked, he said: “significant investment in journalism with the aim of improving the quality and reach of our mastheads”.
So something big is brewing at News. A couple more things to throw into the mix. David Penberthy — the man behind the soon-to-launch The Punch currently has a weekly column in Sydney’s Daily Telegraph. It’s over a generous DPS. It’s a design that could just be testing how the audience reacts to opinion pieces written originally for the web.
4. The bigwig comes to town
And fourth there was this month’s visit to Sydney of Robert Thomson, editor of the Wall Street Journal, on a “holiday” that seemed to be mainly spend in the Holt Street offices.
So let’s take a scenario of how News Ltd’s portfolio might look in five years’ time?
The metro titles — Sydney’s Daily Telegraph, Melbourne’s Herald Sun; Brisbane’s Courier Mail, the Adelaide Advertiser and maybe the Mercury in Hobart and Cairns Post — effectively become one free, locally editionised daily, perhaps updated with an afternoon edition where MX, News Ltd’s freesheet, already has a footprint (Sydney, Melbourne and Brisbane).
They then carry far more comment content, generated by The Punch. Perhaps with a model where there’s a separate news team with an editor in each city, but uniform features content? The streamlining of the News Ltd features desks in Sydney and Melbourne suddenly makes sense.
The audiences on offer to advertisers would dwarf anything that Fairfax’s titles — assuming they remain paid — could offer, potentially pushing them into an ad revenue death spiral. And for Rupert Murdoch, publishing strategy is often simply about hurting your opponents more than you hurt yourself.
Clearly there are obstacles. How would they distribute? Do they pay newsagents to do it for you even without a cover price revenue? Do they need them? If not, are they willing to sound the death knell for the Australian newsagency industry? Intriguingly, I gather that most of News Ltd’s contracts with newsagents are due to expire or be renewed in the next couple of months — so it’s an opportune time for a renegotiation of terms.
And there are unknowns. How would Fairfax respond? If Kerry Stokes had acquired Fairfax by then, what would adding The West into the mix do to the model? Would it unbalance the cosy WA arrangement of News Ltd Sunday Times and Stokes’ The West on weekdays, with neither one pushing too far onto the other’s turf? Does an Asia Pacific edition of the Wall Street Journal enter the mix?
Or could there be a halfway house? In London, the Evening Standard gave away Standard Lite while maintaining a paid edition as a means of giving advertisers greater reach.
What does seem obvious is that News Ltd does not intend to simply ride this out. Something is in the air.
From what I can glean, the conversations at News are at an early stage and decisions haven’t been taken. But if the move to free happened, it would be as dramatic as when Murdoch killed the print unions by moving the printing of his British titles to Wapping overnight (and in the process saved the country’s newspaper industry).
A move to free would be just as risky — and typically Murdoch.
Originally published on Tim Burrow’s media and marketing blog, Mumbrella.