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James Murdoch giving the the MacTaggart lecture at the Edinburgh Television Festival complained that organisations like the BBC, funded by the licence fee, as well as Channel 4 and Ofcom made it harder for other broadcasters to survive.

Whilst I have some sympathy for the view, to a point, it is all rather hypocritical and self serving coming from News Corporation just because they racked up substantial losses during a year when advertising revenue fell off a cliff. As the BBC doesn’t take advertising revenue, reducing its income from the Licence Fee would not help Murdock and News Corp one jot.

Not a New Problem

The real issue is what I call “The Man on the Trapeze”, you have to let go of the swing you are on to grab the next one. The current business model concerned with printed news, no longer works because of technical, economic and cultural shifts. The reality is that a lot of people no longer read the news in a newspaper and even before the technology arrived that made it possible to “read the news” via a PC or mobile phone, things had started moving on and sales dropping.

The last time I read a newspaper every day was back in the 1980s and that was when I worked in London and bought the Evening Standard. I then just bought the Sunday Times once a week and stopped doing even that 3 years or so ago. Far fewer people read a daily paper these days and those that do, will tend to be old like my Pop who died at 86 and read the Telegraph every day.

I Read On-Line

Back in 2002 when I had returned from living and working in the US and first had broadband, because of the type of businesses I worked with, I had an on-line subscription with both the Financial Times and the Economist, I can’t remember the cost but because of their target market and specialization, it didn’t seem unreasonable. After a time though, my focus having moved on, I didn’t renew them.

What is significant about this was that I was prepared to pay for a specialized publication but a general newspaper ? Hardly. Although I would be prepared to pay a monthly or annual fee to “access all areas” in on-line news media. Possibly it may well make sense to examine whether this was collected via the Internet Service Providers as an “opt in additional fee” to your service.

Specialist Interests

I only get two magazines a month, PC Pro which is very good computer magazine but strangely having picked up the latest copy yesterday of the other one which is called “Web Designer”, looking at it, I wondered why on earth am I buying a print copy at £6 a time ?

The format of this magazine is “Web Industry News”, Company and Individual web portfolios, tutorials based around commonly used software in web design such as Adobe Photoshop, Dreamweaver, Flash, Illustrator and systems such as WordPress and so on, they also throw in a CD with samples, tutorial references and so on. There is absolutely nothing in this magazine that couldn’t be better dealt with via a web site, an annual or monthly subscription and a personal login which allows me or any paid up subscriber to download material.

Currently I’m paying £72 per year, I would expect that an annual paperless subscription could be around £50 and even PC Pro could be the same because I like the featured writers, need the industry information and access to hardware tests, software reviews but, I really don’t need the paper. The point that I’m making though is very simple, people will pay for specialist interests of theirs be that photography, knitting or Celebrities, they won’t pay for a generalist content publication.

The Complaint

Whilst I have serious gripes with the BBC and most certainly think it needs some considerable reform, I have absolutely no sympathy with Mr Murdoch, News Corporation and all the rest of the printed media, it is all “special pleading” based totally on their lack of vision in creating a new business model and being stuck in the past wanting things to be as they were.

Of course for Murdoch who has announced the intention to charge for news, the BBC is a major stumbling block, he is spitting teeth because it just won’t work in the UK whilst the BBC provides that service for “free”. Of course it is not for free, we pay a licence fee for it and if it delivers news via the web as part of the service it provides, which is tough luck for News Corp.

The conventional media are their own worse enemy, take the idea of an “Access All Areas Pass” – it can’t work, won’t work simply because News Corp and the other newspapers, could never agree on the “revenue split” between them therefore, they are each condemned to bitch, moan and go out of business. In addition and because of the global nature of the web, a “UK Only Revenue Split” wouldn’t really work too well. The other major factor is the increasing diversity of devices the “news” can be received on rather than in print form.

News Corp bitching about the BBC is actually a case of the pot calling the kettle black because whilst the Beeb gets the Licence Fee, News Corp gets the SKY subscriptions which are more than twice the annual TV Licence cost. In fact I believe that as a consequence, their newspapers get a considerable internal subsidy…

A New Business Model Required

In the end, a totally new business model will need to emerge and the changes will involve a complete overhaul of the way the BBC operates as well. Many years ago, the advertising industry consisted of “Full Service Agencies” which did everything from creating Advertising Campaigns, printed material, billboards, buying advertising slots and so. Today that is no longer true.

The business fragmented, there are “Creative Agencies”, there are media buying ones in fact, every aspect of the Advertising Industry has been broken down into independent specialist businesses, most of which are profitable else they die or get taken over by a competitor. The News media need to go down a similar route, there is increasingly hardly any point in owing your own printing presses, that is “another business” separate from gathering news, writing comment pieces or “entertainment” ones.

In the end all any one newspaper will become is a “brand identity” and rather like the Magazine Business today, will employ few full time staff (accountants, web delivery specialists and web designers) and rely on regular free lancers for content. Individual specialist sections (individual sports say) on a newspaper web site may well become “sponsored” by advertisers just as TV programmes are in the US.

For James Murdoch…

The bottom line for Mr Murdoch is that his business model is wrong, both he and the others need to reduce their overheads by cutting back on the related activities. It is not difficult, after all, SKY Movies doesn’t make films nor does SKY own Football Clubs but both are major revenue earners for News Corporation. The BBC could be a vehicle for State sponsored propaganda but as it is mainly staffed by Muddle Class Metropolitan Luvvies, unlikely as they are not that organised. To be honest, a world where News Corporation was the major provider based upon purely commercial clout and the whims of the shareholders, would I am certain be a world that was considerably worse and beyond democratic control.