If the financial solution to the embattled newspaper industry is to be found anywhere, then Britain is the place to start looking, says the Economist.
The “savage” competition on Fleet Street forces our newspapers to be the most innovative just to survive, and the Guardian was the paper quickest to catch on to the opportunities presented by the internet.
It set the benchmark with a supreme website that won a glut of awards but its big, free presence online has not served the bottom line well. “It is a measure of how quickly things are moving that the newspaper closest to the cutting edge a few years ago now seems most in need of a new strategy,” says the Economist.
Instead, it’s the owners of the Times, Daily Mail and the Independent that have taken the bull by the horns. But all three are pursuing different strategies.
The Times, owned by News International, is playing the long game. Though its rivals have “gleefully” pointed out that its paywalls have triggered a “drastic” drop in web traffic, the company is not worried. The ever-growing number of ad slots means their value is diminishing. “The firm would rather extract money from dedicated readers directly.”
And that comes from in-house ads in the Times and Sunday Times. For example, some 250,000 people buy from the Times‘ wine club.
“The main goal,” says the Economist, “is to hook readers on a bundle of services”. That means turning the newspaper into subscribed-for product like pay-television or mobile-phone equivalents – “something that hurts to cancel”.
Britain’s “second great innovator,” the Daily Mail, “takes the opposite view”. Advertising still works fine for the paper thanks to its now monolithic website, Mail Online. It’s the second most-read newspaper website in the world and could ascend to first place when the New York Times goes behind a paywall this year. Mail Online’s 50m unique users mean it has left its natural competitors in its wake and now competes with “portals” such as Yahoo! and MSN.
The website’s independence from the traditional publication has been credited for its success; i.e. the endless streams of celebrity pics and gossip, and the Mail “is now steering readers to its iPhone application”.
The underdog in this competition is the Independent, not just because it sells the least number of papers (barely 200,000), but because it has “no compelling websites” and is running “the most counter-intuitive strategy”.
Its owner, Russian tycoon Alexander Lebedev, has also bought and turned the London Evening Standard into a freesheet, and created the i newspaper, a daily 20p digest of the full Independent targeted at a younger audience.
While the Standard is now ubiquitous on the tube and southern rail networks, i is cheap and newsagents make little money from its sales. But it has reinvigorated interest from marketers in the Independent brand. “It costs so little to assemble and may keep alive the newspaper habit, by offering a halfway house between free and premium papers,” says the Economist.
Of the three experiments, “it is highly unlikely that all three will work” and it “may well be that none of them does – but no one can be faulted for lack of boldness,” it concludes.
(Source: The Economist)