Big Bang at the Echo!

Digital media tighten the squeeze on complacent print mediaMichael Sheridan 


Print media face a fight.  This matters because they are an important medium of information and investigation in democracies whose institutions are constantly under pressure from Big Money to censor or distort the Truth.

On top of subversion of their news hegemony by social media such as Twitter, Facebook and blogs, newspapers and magazines face, white and quivering but vaguely defiant too, an alarming decline in advertising and circulation.

Because of the significant delay in printing, by the time they dribble by cover of night in to the shops, newspapers today find that much of their news content is out of date. So bolstering their online editions seems like an intelligent preemptive move.

If only mainstream media had realised this sooner perhaps the cleavage between ‘old’ and ‘new’ media would not have been so defining.

The recent move to embrace digital on the part of most mainstream news outlets, however, follows years of ‘Titanicism’ in Irish print media. No one wants to contemplate the end of a venerable newspaper but the cultures are often contrarian. The possible demise of a newspaper is hardly acknowledged until insolvency shimmers close out of the night. This was true in advance of the Irish Press group’s disappearance in the mid-nineties. In spite of obvious warning signs, no one could cogitate that such an institution would cease to exist. But it did.

More recently, the Sunday Tribune and The Star On Sunday have made their exit. The Examiner group only staved off collapse with a dubious ‘pre-pack’ resuscitation at the expense of their printers – and not a few journalists.

The Sunday Business Post, one of the pearls of the Examiner group, with an emphasis on high-quality content and news is the exemplar. Proselytising, lecturing and advising on business and politics, it was itself primly overstaffed, and sank into a pit of outrageous debt, threatening the livelihoods of its workers. It remains to see who may pull it out but a dream-team deal between the Irish Times and Tom and Ted Crosbie, who are atop the wider Examiner group now, seems to have buckled.

Perhaps a Russian oligarch is needed, in the style of Alexander Lebedev, who bought the British Independent group in 2010 (for £1) and has sustained losses of £80m since.

Costs of newsprint, printing, distribution and the commissions to newsagents are shrouded in a mystique that dates to the hegemony – the word itself hints at a cultural problem – of the printing unions. All need to be analysed.

The two big anomalies are newspapers and magazines. We are still investing 20%, but consumers are spending only 7-10% of their time. That has to change

Convergence of old and new media has been lethargic and fractious. In January, a row between  a righteous and wrong-footed Irish newspaper industry and an equally righteous but rampant online community led by the,  developed over the use of content taken from the mainstream then aggregated, ‘scraped’, and summarised by other sites. Linking, it seems, is acceptable – “the lifeblood of the online world,” according to Hugh Linehan, editor of, quoted on Anything more could be illegal.

Mainstream news outlets such as the Irish Times seem truly wide-eyed (if  purse-faced) at how their role may evolve in the digital era. A quick search of, for example, shows only four mentions of “”, and ten of “”, despite huge readership on both sites. Three times the number of Twitter followers for as for @IrishTimes bespeaks the phenomenon.

In a recent Irish Times op-ed, its former editor, Conor Brady, wrote knowingly: “Politicians like Quinn and Rabbitte are long enough on the road to recognise what is happening. They know that whatever flaws there may be in traditional news media, they discharge an essential function – and it is not yet clear that the new media can or will adequately replicate it”. Broadsheet headlined its disrespectful, but non-larcenous, link to the piece “Who let Grandpa On the Internet?”.

There are risks for traditional newspapers moving into a digital world in which advertising cannot bring in cash. This is in no small part due to the leakage of advertising to new social media, whose service is predominantly free. Indeed the internet culture of ‘free’ exacerbates the problem for old media by suggesting information is a basic right and that payment is an affront.

Quite apart from this worrying reader culture, for marketers, is the reluctance of advertisers to follow from print to digital in an already stagnant market.

Some media, such as buy-and-sell magazines, are ripe for transfer from print to digital, as contact between the prospective buyer and seller, by email, can be teed up on the same medium as the advertisement – the internet.

So, for example, the hugely profitable Trader Media Group will next month print the final edition of Auto Trader, the bible for second hand car sales. The magazine went from a circulation of 380,000 in January 2000 to 27,000 last month. But the online version has posted no fewer than 11 million hits per month. The evolved future is bullish for some.

A notable print bear is Sir Martin Sorrell, chief executive of WPP, a global communications group. Speaking at the Financial Times Digital Media Conference in London, he said that advertisers should seriously consider slashing the amount they spend on newspapers and magazines, and accused Google, Facebook and Twitter of being media owners masquerading as tech companies.

His accusation has been vindicated by Twitter’s advertisement for a head of news. No surprise – the Twitter Feed is constantly quoted in old media.

WPP had found a huge mismatch in the amount advertisers spend on newspapers and magazines compared to the time consumers spend reading them.

This data related to the US, where WPP spends $40bn annually on advertising, but Sorrell contended most of the world was going the same way. WPP spends $73bn globally, so it might be expected to take an interest in the data and the patterns.

TV-viewing takes up around 43% of consumers’ time – perfectly proportionate to WPP’s investment of 43% in TV. Outdoor advertising and radio also broadly match up.

“The two big anomalies are newspapers and magazines”, according to Sorrell. “We are still investing 20%, but consumers are spending only 7-10% of their time. That has to change”.

WPP spends $2.5bn with News Corporation annually, but this is closely followed by Google which snaffled $2bn last year. Sorrell said that by the end of next year Google is likely to outrank the Murdoch empire.

Confirming that techology companies are “media owners masquerading as technology companies”, apart from the huge spend on Google, WPP spent $500m on AOL/Yahoo and $200m on Facebook. Sorrell said that if he was to invest money in stocks for his grand-children, he would buy Google and Amazon.

The US media usually herald the future for Ireland. Data compiled by the Newspaper Association Of America shows that while the industry took in $38.6bn in revenue in 2012, this was down 2% on the $39.5bn taken the previous year, while advertising revenue fell by 6%. More worrying in the context of Sorrell’s remarks, print advertising at 46% remains the highest source of revenue. Sales of print copies contributed 27% of revenue.

Newspapers must now search for new sources of income, and many have turned, in this regard, to digital consulting for local business as well as facilitating online transactions, which now account for $1 of every $10 of revenue. American newspapers, in other words, are transforming themselves in the teeth of this brave new e-world.

Ireland is following, according to the newly-hip Irish Times’ voguishly-titled chief innovation officer Dr Johnny Ryan, speaking at the ‘Open Innovation 2.0’ conference in May.

The newspaper will be making a multi-million-euro investment towards adapting for the digital age, Ryan told Silicon Republic. David Cochrane, founder of (the execrable), will manage online communities, and start-ups are being increasingly incorporated into the newsroom. But the Irish Times has content problems: many of its journalists have lost their verve and it has shockingly losts its ascendancy in Dublin to the Indo. A recent reshuffle of editors, with a boost for quality-conscious Paul O’Neill, signifies a late awareness of the deficiency.

Aside from supposed efforts to embrace ‘new media’, advertising remains a big problem with no obvious solution. INM’s Annual Report for 2012 shows that on the island of Ireland, advertising revenue for the group’s publications declined 11% compared to 2011.

The Irish Times’ financial statement for the year to December 2011 showed that the advertising cliff was less sheer, with a drop of 4.1%, though in a vertiginous  landscape where it has borne total recognised losses just shy of €23m due to an embarrassing expansionist period, led by management but apparently supported by compliant editors. The 2012 report, which at the time of writing has not yet been published by the ‘Trust’, is unlikely to show an improvement in advertising. The Trust, which has  never delivered on its admirable charitable objectives anyway, is vulnerable to a commercial overhaul in an insitution whose commercial side ominously has let it down badly and seems to have no vision for editorial excellence.

Conor Brady called on the Government to consider an agreement with Google to set up a fund to aid the newspaper sector

Meanwhile INM has an infamously precarious share-ownership profile and a lead shareholder, in Denis O’Brien, who seems to be promoting an editorial charter apparently conducive to softening the cough of big-ticket investigations, while he scarifies the wits out of the Ireland’s admittedly rather spineless investigative elite with threats of litigation – suggesting at the least a compromised vision for news.

Significantly, INM is to recruit an editor-in chief to oversee the operations of the three titles. The new role will involve overseeing a reduction in the pool of resources shared between the Herald, the Irish Independent, and the Sunday Independent, and the possibility of bringing all three newsdesks together, though INM management has stated its commitment to maintain the three separate titles. Along with the new supremo, the group is seeking 20 additional voluntary redundancies, likely to be finalised in June – though unlikely for the moment to include O’ Brien’s ‘brave’ antagonist, Anne Harris, ‘brave’ editor of the still soaraway Sunday Independent. All of this will serve not only to tighten the O’Brien grip over the operation, but also to erase the antipathy towards him in-house, an eccentricity of a sort that is unique in world newspapers.

Paywalls have also offered a potential solution, but huge problems remain. The Washington Post, which is soon to bring in an online paywall, is losing upwards of $80m annually and the division of his empire between print and publishing; and television and film does not bode well. The former will no longer be subsidised by the latter, exposing it more openly to the vicissitudes of market forces.

Already the Post is looking for editorial redundancies, as is the Daily News, a trend spreading all over the country and elsewhere in the world. Newsweek has drifted off the shelves forever. After eighty years, the daily Variety ceased its print publication. Publisher Michelle Sobrino explained the conundrum that faces all print media: “We were delivering a print product telling you stories you have already read on our website – financially, it didn’t make sense”.

This is the problem currently facing the Irish newspaper industry. The websites of the leading papers such as the Irish Independent and the Irish Times have recently seen increased investment, embracing more use of videos (including a new sports ‘show’, ‘Second Captains’, reconstituted  from Newstalk’s ‘Off the Ball’ radio feature), blogs, and twitter, for example, in an effort to leverage the strength of their content into new media.

Nevertheless, newspaper and media groups, which are currently facing a crisis of credibility post-Leveson, must now also face the shocking realisation that they are vulnerable to the same market forces as any company – this may seem obvious, but economic reality has evaded this worthy sector for years.

Circulation in the Irish Times was down 8.1% in the six months to the end of 2012 and a further 6% since then. The Indo dropped 5.1% and then 2%. Ready or not, there will be big job cuts in the industry. Industry standard-bearer Independent Newspapers is laden with huge debt built up by the crazy expansionist policies, self-serving inflated dividends and mismanagement of the O’Reilly dominion. INM’s net debt at the end of last year was €422m, and plans were recently announced to reduce this by asset sales, job cuts, asking shareholders to stump up €40m, and debt forgiveness from its alms-giving state-owned banks in the region of €163m. Analysts say it is a big ask, and by no means a given. The Irish Times too is now looking for voluntary redundancies, without the benefits available in previous offers.

It is a truism of the media that however much they target bankers’, politicians’ and civil servants’ salaries, they fail to apply the same level of outrage to their own proprietors, management, top journalists, and indeed new websites. Needless to remark, such hypocrisy does not escape the attention of the public. Perhaps the bombast is a legacy of the megaphone press barons. Combined with the pettily bureaucratic atmosphere handed down by the unions the culture is dangerously dysfunctional for a sector under siege.

In late May, at the launch of the annual report of the Press Council of Ireland and the Office of the Press Ombudsman, Conor Brady called on the Government to consider an agreement with Google to set up a fund to aid the newspaper sector, as was agreed by the French government in February.

The agreement would be based on Google paying around €60m for the rights to list newspaper headlines and short excerpts from articles. Brady pointed to the self-defeating cuts being made across the industry, and the democratic risk involved in reducing newspaper and magazine resources.

Less grandiose is the vision of  Denis O’Brien’s close associate, ascendant board member of INM, Lucy Gaffney who recently stated that the group will have to think as they do in the US and Britain, boosting revenue streams and merging newsroom operations. To paraphrase Marshall McLuhan, the paywall seems now to be the message. It needs less complacent messengers.