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The current issue of the London Review of Books (vol 32 no. 24) contains an excellent article by John Lanchester on the future of the newspaper industry. It’s wide ranging and well researched piece and should be compulsory reading for those of us who are concerned about the future of the press. It also makes timely reading for us in the NUJ as we consider various alternative economic models for the future provision of news, which will be the subject of a conference being organised by the union and the co-operative movement in the spring.

John sets the scene by outlining the decline in income from newspaper sales and advertising which has come about as a result of the loss of readers in the period 2004-2009. He quotes extensively from the recent Organisation for Economic Co-operation and Development (OECD) report ‘The Evolution of News and the Internet’, which showed that in the UK the newspaper industry lost 22% of its readers in that time. In the last 12 months he reports that seven UK broadsheet titles have seen their sales decline by more than 10%. With declining circulation comes declining revenue.

One possible (part) solution to reverse the decline in income which was mooted in the past was the introduction of ‘paywalls’. It’s an option that the NUJ still has not really come to grips with (maybe it will be debated at next year’s delegate conference – it should be, but can’t be considered in isolation without looking at the bigger picture. If like me you still have not made up your mind on the paywalls question, the section in JL’s article covering it is well worth quoting in full.

‘…The fact that newspapers are necessary, however, does not mean that they will survive. Route One – the route down which the press is currently travelling – involves a slow decline in revenue with the papers employing fewer and fewer journalists and containing less and less that is worth reading. Nothing is less likely than some form of bail-out for the industry. If a solution to this slow decline is going to be found, it will be in the form of a market mechanism. No one has found it yet. OECD again: ‘The study also finds that currently no business and/or revenue sharing models have been found to finance in-depth independent news production. This raises questions as to the supply of high-quality journalism in the longer term.’

The one exception to the OECD’s general rule lies in the area of financial journalism, in which both the Financial Times and the Wall Street Journal have been able to make money by putting a paywall around their content. The FT has a staggered system in which the first casual visits are completely free; then you have to register, but the articles are free to read; then when you’ve read more than a certain amount of content, you have to pay. When you ask insiders why this works, they always say the same thing: ‘Because people have a reason to read the FT.’ This immediately raises an obvious question: why don’t they have a reason to read the other papers? Wouldn’t it be a good idea for those papers to be the kind of thing that people have a reason to read, too? Maybe if the papers were less like the stuff you could get for free – celebrity gossip, opinions about knickers, and short news stories – people would have more reason to pay for them? But this is easy to say, and the fact is that the current mix does have lots of readers, more than ever before; it’s just that it’s difficult to work out how to get them to pay without taking a terrifying leap into the abyss. The attempts to get online readers to pay have so far failed. Some papers have tried the model of putting paywalls around bits of their content: the New York Times did that with its op-ed material, but then took the wall down. The apparent reason was that the drop in traffic caused by the paywall was so great that it ended up costing money, because the paper’s internet ads reached so many fewer readers. The new revenue was nowhere near enough to compensate from the ad drop-off. That’s one way of getting it wrong. Some of the other ways of getting it wrong are more straightforward. Newsday on Long Island (which when last I saw it was a pretty good paper) went behind a paywall in October 2009. At that point it was having 2.2 million unique visitors a month. Guess how many people had signed up to pay by January 2010? Thirty-five. A way ahead for the industry, this is not.

The man who is trying harder than anyone else to solve this conundrum is Rupert Murdoch. It is hilarious that Murdoch, who has in many respects been a pantomime villain for progressives, should now be riding to the rescue of the print media – but it shows that the Dirty Digger, for all his flaws, does genuinely love the newspaper business. (It also shows that he owns many hugely valuable franchises in print journalism, but there’s no law saying you aren’t allowed to have overlapping motives.) His dislike of giving his expensively developed content away for free is well known. He owns the Wall Street Journal, which successfully charges for access. His solution: to erect a paywall around the Times and Sunday Times and begin charging for content.

I don’t think I can be alone in having had very mixed feelings about this experiment. On the one hand, I think Murdoch has been a strongly negative force in British life and I don’t wish his enterprises well. On the other, if it did turn out that people were willing to switch from reading stuff for free to paying for it – were willing to hop over the paywall as if they barely noticed it was there – then that would, right in that moment, be the saving of the entire newspaper industry in its current form. If the Times paywall worked, we could all exhale and slap each other on the back and say ‘that was a close one’ and forget that the business had once seemed doomed. But I should say that I don’t know a single internet-minded person who thought that the paywall experiment had any chance of succeeding.

It hasn’t. The first set of figures giving the news on ‘the most important business story in Britain this year’, as several observers called it, said that the Times site had 105,000 paid subscribers. The data lumped together temporary low-cost subscriptions, iPad subscriptions, day-pass subscribers and proper monthly subscriptions to arrive at its headline six-figure count. It did not break down the data into categories and the general view was that if the Times had had to chuck in Uncle Tom Cobley to get the numbers up over 100,000 it would have done so. Traffic to the website in total is hugely down. The Times is saying it’s down by about 90 per cent, but other sources have cited it as being down by 98 per cent. These numbers are not just bad, they’re terrible. The industry rumour is that only about half the people paying for content are actual subscribers. There are, apparently, just 54,000 people shelling out their monthly £8.67, generating total revenue of £5.6 million a year. That is nowhere near enough. I would imagine that the loss in revenue from online advertising, a direct result of the precipitate crash in web traffic, would more than wipe out the revenue from the paywall. In fact I’d be amazed if that weren’t the case. Nobody is going to follow Murdoch down this route.

It doesn’t help that the paywall is so badly implemented. Is there no computer literate person in a position of power at Times Newspapers? If there is, it doesn’t show. I registered with the site to see how it’s working. The short answer: it isn’t, not by internet standards. I have to reregister every single time I want to read the paper. On the net, people can just about stir their stumps to fill out a registration form, if they really really really want what’s on the other side of it. But we will do it once and once only. Making people register every time they want to look at Times content? Daft. For an experiment of such consequence to be executed so badly just shows how big the gap is between the people who own the paper and the digital audience they are trying to reach…’

There is much more in this timely and interesting article and its conclusions need serious consideration. ‘Can newspapers survive in print form’ is the question? The answer seems to ‘only on the net’ and we will have to pay for it. Walls are not the same thing as payment Lanchester argues and time is running out.

Read the full article at:

And let me now what you think.