Enders questions Murdoch’s strategy
There was a clear difference of opinion over News International’s strategy at MediaTel Group’s ‘Future of National Newspapers’ seminar in London yesterday.
Founder of Enders Analysis, Claire Enders, attacked News International’s strategy, accusing Rupert Murdoch of simply following the latest “fashion”.
Taking the audience back as far as the launch of Sky – when the business model was successfully flipped from advertising-funded to subscriber-funded, she said News Corp constantly changes its models and that Murdoch’s current ideas about paid-for online content “will pass”.
News International’s managing director of commercial Paul Hayes was adamant – and philosophical – “People will pay for quality content. Otherwise our business has no future.” He did agree that the traditional newspaper model is “broken” and that the industry needs to evolve. Newspaper groups “need to find new routes to market,” he said.
Enders told a full house of media delegates that newspapers are missing the point and don’t understand the “structural shift” happening in the industry today, relating to the economic downturn and the changes in the way society consume media, which she said is “affecting all print models”.
Tim Brooks, managing director of Guardian News & Media, agreed: “There is a very profound structural change taking place, which has hit all mass media. We need to develop a 21st-century model.”
Pricing also came in for consideration. “Business models vary,” Hayes said, “and elasticity at the top end of the market is different from the bottom end. Price is not the issue at the top end but is at the bottom end, for example with the Star,” which has recently reduced its cover price by 15p to 20p.
In the latest ABC release, the Daily Star enjoyed a significant 18.7% year on year increase, taking its circulation to more than 870,000 copies, its highest level since August 2005 (see ABC National Newspaper Round-Up: June 2009), though Hayes admitted he doesn’t understand how Express Newspapers can be making any money.
He does, however, believe in trialling new models, for example the Times‘ street merchandising, which he said is “working to a degree”.
News International is constantly “trying new things”, according to Hayes, and is happy to admit when things don’t work.
“We’re developing things all the time. It’s a competitive market and that’s the way it should be,” he said.