GMG and News UK lock horns at digital summit
At last week's Digital Media Strategies, the rival publishers' CEOs defended their contrary web models. By Arif Durrani.
Miller (left) and Darcey: The Guardian insists it can be sustainable without a Sun-esque paywall
The battle for hearts and minds among the UK’s diverging press publishing models took on new momentum last week when the vociferous leaders of News UK and Guardian Media Group shared a stage.
Speaking at the Digital Media Strategies event, Mike Darcey, the chief executive of the world’s largest (and oldest) paid-for newspaper operation, and Andrew Miller, the chief executive of the ever-expanding, "open" GMG, pulled no punches.
News UK’s Darcey came ready for the fight, armed with granular knowledge of his rival’s financial details and some illustrations from The Times’ cartoonist David Haldane (in which The Guardian was portrayed as a soup kitchen and Mail Online as shark bait). He reiterated his belief in making consumers pay for content as the only sustainable option for a sizeable publisher of original and investigative journalism. It is a direction he has clearly followed since taking charge of Rupert Murdoch’s UK newspaper business early last year.
Darcey said this had been News UK’s approach "for around 230 years", bar a "brief dalliance with free content on the web". His credentials are bolstered by 15 years’ experience at BSkyB, a company whose paid-for model was dismissed by many in the early years as unrealistic.
The strategy is started to reap rewards, according to the publisher. By the end of 2013, The Times and Sunday Times had 153,000 paying digital subscribers and a further 207,000 print subscribers with digital benefits. Meanwhile, The Sun attracted 117,000 paying digital subscribers within its first four months of erecting a paywall. In terms of financial performance, operating losses of £72 million at The Times and Sunday Times had cut to £6m figure for the year to June 2013.
Darcey then fanned the flames with his rival by embarking on a dissection of The Guardian’s finances – noting "they lost £46 million" last year, although "below-the-line adjustments" and "a curious tax credit of £9 million" reduced this to £31 million.
He added: "This might be fine for The Guardian, at least for a while – they have a lot of money in the bank… but it wouldn’t work for me. Mr Murdoch has been very clear to me: my job is to run a profitable business."
Open is the way the web works
Miller, visibly annoyed by this financial analysis, pledged to focus only on his own business. With the stern sepia image of the formative Guardian editor CP Scott staring down on him from one of his slides, Miller reminded everyone that his job, first and foremost, is to keep The Guardian going in perpetuity.
He was quick to play to the strengths of having an open site with more than five million unique browsers a day by showing live feed data from The Guardian’s bespoke Ophan analytics. The beating heart of the the site's activity, the analytics captured every click and every exit on the site, and provided historical consumption trends at a glance. "Open is the way the web works," Miller said. "It’s about how people consume their media today."
Miller noted how half of the traffic was coming from mobile devices, and two-thirds from outside the UK: "You don’t get that by being a parochial UK brand." The data also highlighted the number of referrals from the likes of Google, Facebook, The Drudge Report and Twitter – "these aren’t our enemies" – and demonstrated how different platforms give new oxygen to stories at different times and in different waves: "This isn’t trawling traffic, this is essential to our business model."
He added that "the old days of us being a linear broadcast platform are long gone" and insisted that GMG’s model is based on following the consumer. But Miller was also keen to stress that "open" should not be equated to "free", with subscriptions to apps and membership services very much an ongoing concern for the publisher, along with ads and branded content. However, on the idea of erecting a paywall at The Guardian, Miller confirmed: "That horse bolted long ago."
He continued: "You don’t have to go behind a paywall to get a large number of subscribers; we’ve got it [4.3 million registered users and 95,000 paying subscribers]. You drive traffic to try your product in whatever format, then drive through to conversion. This is Marketing 101."
Two convincing leaders with two opposing visions of the future. Everyone benefits from such robust debate.
This article was first published on campaignlive.co.uk
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