Yesterday we learnt that The Times and Sunday Times are losing a million pounds a week. The New York Times is selling and renting back its own headquarters to stay solvent. Guardian Media Group is losing £83,000 a day and has axed over a hundred jobs. The Indy’s bonds now have junk status edging over to defaulting. The Indy is in the weakest position, it loses money hand over fist, it always has and will continue to do so for as long as it is in the expensive business of publishing dead trees. The newspaper industry is a dead industry walking. It is not a twenty-first century business model: slaughter half a forest of trees, pay NUJ rates for news gathering, sub-editing, laying out, employing friend’s children, transferring ink onto aforesaid trees, then pay people to work all night sending the slices of dead trees around the country in the dark on lorries. Finally when you get to the point of collecting some money, split the sales revenue with the people who take the money. The Indy makes a loss on the whole business every year. That is vanity publishing.
Guido finds it hard to believe that traditional newspapers have a future, yet a surprising number of mediasaurs do continue to stick their heads in the sand. Warren Buffet says the internet will kill newspapers. Would you bet against him?
A back of an envelope calculation suggests that the Indy could abandon the printed edition to go digital only and, for some £20 million, give everyone of its 215,000 average daily readers an Amazon Kindle or iPhone type device. Users would be given the device free with access to the Indy site hardwired in. Users would only be charged for using the device to surf other sites. Crazy? What is crazy is that as things stand the Indy hardly covers the cost of production and distribution. As circulation shrinks the fixed costs associated with producing the newspaper are becoming terminal. The INM annual financial report is not that transparent, nevertheless Guido reckons the paper is not even covering operating, production and distribution costs as things stand – never mind servicing the corporate debts. Going digital will take it out of the costly tree slaughtering business and make it a content producing pure play. Will advertisers go for it? They are already migrating from ink to pixels.
Guido has one more suggestion; there is a glaring broadsheet market positioning gap to be seized by shifting from an editorial stance that reluctantly backs the LibDems towards enthusiastically backing Cameron’s liberal conservativism. With the Telegraph floundering editorially there is a market opportunity. The Indy is never going to capture the ground held by the Guardianistas. The Times is probably going to row in behind Cameron with a heavy dose of skepticism from Murdoch. The Indy should therefore enthusiastically embrace the socially liberal Notting Hill Cameroons, in all their weed tolerating, groovy green glory. Become the modernised news brand that Cameroons are not embarrassed to be supported by…
