Posts Tagged ‘the Economist’

Will The Economist’s phenomenal success feed through to Reuters?

August 26, 2013

(This article first appeared on 24.8.2013 on The Baron, a web site covering media trends http://thebaron.info/.)

In appointing a senior manager of The Economist as “chief executive, Reuters, running news and media business from London,” Thomson Reuters has picked talent from one of the world’s most successful news businesses.

Instead of turning to another wizard from America, the company is looking towards a UK-based organisation which has built a powerful readership worldwide including the U.S. The Economist boasts playfully that it is the Voice of God: read its content once a week, and you know all you need about the world.

So what are the keys to success that Thomson Reuters must surely be eyeing in choosing Andrew Rashbass? Some of his colleagues recently briefed journalists attending the Reuters Institute in Oxford:

– The Economist has a circulation of 1.5 million, making 70% of its revenue from subscriptions and 30% from advertising. It is profitable on subscriptions alone. In five years, the ratio is expected to move to 80:20 or more. So much for the myth that nobody pays for news in the digital era.

– Digital publishing grows rapidly, but The Economist finds that print is far from dead. In fact, it tends to be more profitable.

– The Economist employs only a handful of staff journalists. But it draws on a powerful array of expert writers who produce dauntingly thorough series on subjects such as the U.S., China, India, international finance, technology and science.

– It surprises readers by writing about topics they had no idea mattered.

– The Economist does not try to be impartial. It believes readers accept an openly expressed point of view. It is liberal, socially and economically, and sees this predictability as a strength.

– Its journalists don’t write just for the weekly edition. They keep the news flowing in between in the form of blogs. They use feedback from the blogs to adapt followups.

– They see apps delivering news to tablets and smartphones as a more promising business model than web sites with paywalls, because consumers feel they are getting the whole news, not bits and pieces.

Some of The Economist’s lessons will not apply, and Reuters brand already carries authority. But Reuters does not quite have The Economist’s intellectual firepower. It has introduced comment, but it is varied and unfocused. Reuters avoids having “a line,” and in The Economist’s experience that is not a plus.

Look at Reuters web pages, and you see a disparate array of stories – some financial, some global, others lightweight and local. While Reuters has more experience of running 24-hour news, it has struggled to make it profitable. Its web sites have no paywalls.

By refocusing on the name “Reuters,” Thomson Reuters is signalling that it wants to make serious money from news. This has been the Holy Grail for Reuters throughout the ages.

Rashbass, who has been guiding a highly profitable global news brand, has been brought in to deliver.

Government decides on media controls in the UK – but they won’t work

March 23, 2013

In blogs I posted on 23.11.2011and 4.12.1012, I forecast that nothing much would change in the UK media as a result of the Leveson inquiry into journalistic malpractices, triggered by a scandal over popular newspapers hacking mobile telephones.

Leveson has since reported, and the government, backed by the two other major political parties, has decided to set up a supervisory body acting according to criteria set by the politicians. However in practice, much will still continue as before.

The Economist, The Spectator and Private Eye have declared they will not submit themselves to the new body, even though refusal is supposed to expose them to extra-harsh legal penalties if they step out of line. The newspapers owned by Rupert Murdoch, as well as the Telegraph and the Daily Mail, have reserved their positions but all likewise indicated opposition.

The new arrangement will be enacted not by legislation, but by Royal Charter. Not having lived in the UK for some time, I’m not sure what a Royal Charter is. However it’s seems obvious that it is weaker than a law, even if the parties insist it will have “statutory underpinning,” another phrase I don’t really understand.

If The Economist will remain outside, that means nothing essential changes for me, since I only actually read The Economist. It earns most of its income outside the UK, so should have no trouble staying out of range of UK controls.

I once lived as a foreign correspondent in Eastern Europe, where the Communist hold over the local media was absolute. People nevertheless found out what was going on through listening to foreign radios. In the UK today, consumers looking for unregulated news can find it on a host of foreign web sites. No need even for a radio set.

In Portugal, during the 1970s revolution, the radical left nationalised nearly all the media, with the result that they all reported the same versions of partial truth. However one newspaper, Espresso, remained independent. So anything that was not favourable to the regime got published there, and we all knew about it. Espresso became the newspaper to read. Controls which are not absolute have no effect.

So does that mean no joy for the victims of mobile phone hackers? Under existing legislation, hacking phones is illegal anyway, so the police could and should do a better job of enforcement.

Some of the media will doubtless remain rascally, but we have got on with that ever since newspapers first appeared. Even if much journalism is rotten, the world can still roll along.

Why there will be no “Arab Spring” in China

March 8, 2012

Rob Gifford, head of The Economist’s new China section, talked to Fellows of the Reuters Institute of Journalism in Oxford. Highlights:

– In Arab countries people were hopeless. In China, there is hope. People are getting wealthier, and many believe they are lucky to be able to “join the gold rush.” There will be no “Arab Spring” in China.

– Over 300 million Chinese are middle class. But there is a big gap in living standards between the cities and the countryside and this is causing tensions.

– The regime’s unspoken deal is: stay out of politics and you can do what you like. The Chinese people have bought the deal.

– China has 175 million manufacturing jobs. But it can no longer live on being a cheap manufacturer. Skilled labour is so expensive and scarce in the coastal cities that firms are building new factories deep in the interior.

– The current combination of a one-party state and market economy cannot last. State capitalism has done well so far, but is transitional, not sustainable.

– The regime is frozen and unable to plan a road map forward. Communist Party politicians are scared of the chaos which broke up the Soviet Union under Gorbachev.

– China won’t be able to keep up its non-interventionist foreign policy of the the last 20 years, since it has so many Chinese working abroad. China is already helping nations combat piracy.

– Chinese journalists cannot write about Taiwan or Tibet – the subjects are off limits.Chinese know nothing about the crimes of Mao Tse-Tung. The subject is too painful.

– Over the next decade, China is likely to be transformed by the development of a civil society.

– If you are confused about China, you should be!

 

“Sift, crunch, pack” – making money out of news in the digital age

November 23, 2011

Fascinating talk at the Reuters Institute in Oxford by The Economist’s Tom Standage. He says his newspaper’s strength is that it is seen as The Voice of God, telling its readers (and Obama, Merkel etc) what to think.

A few choice views from the oracle, as conveyed by Tom:

– The Economist makes 70% of its revenue from subscriptions and 30% from advertising. It is profitable on subscriptions alone. In five years, he expects the ratio to move to 80:20 or even 90:10.

– The Economist employs 75 full-time journalists – the New York Times some 1,200.

– The Economist’s processing of news can be described as “sift, crunch, pack.”

– Economist journalists now write news in two ways: one for print and the other as blogs. Blogs can test ideas for the weekly print edition, since they attract feedback.

– In the digital age, publication of an article is no longer the end of the process. It is the beginning.

– Impartiality is venerated in America, where local newspapers have a monopoly and don’t want to antagonise part of their readers. The trend is for an openly expressed point of view to be accepted. “Transparency is the new objectivity.”

– Digital publishing of newspapers is not always more profitable than print: advertising in print editions does not necessarily migrate to digital versions.

– Apps have an advantage over web sites in providing news, in that consumers feel they are getting the whole news, not just bits and pieces.

– There is no single new business model for news, but for digital metered paywalls are promising – the reader gets a few news articles per month free, then has to pay.


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