A national crisis-in-waiting
It was heartening to read the New York Times Company’s annual results for 2018: 27% increase in digital subscriptions to 3.3 million, total subscriber base of 4.3 million (print and digital); 4.4% growth in revenue to $1.75 billion1. The company also added 120 people last year, bringing the total number of journalists to 1,600 – the largest number in its history. Not bad for what Donald Trump refers to as the ‘Failing New York Times’.
However, the most impressive thing about this end-of-year statement was the long-term ambition of the business: Mark Thompson (CEO) announced a new target for the New York Times: “To grow subscriptions to 10 million by 2025.”
A vision like this is compelling to stakeholders, inside and outside the company. It is something that publishers should in Ireland should look to. Although news media here have greater challenges and only a fraction of the scale of the NYT, they must look beyond cost-cutting and diversification for their future strength.
It is critically important for Ireland to have thriving, ambitious, inquisitive, energetic news media. The Irish Government must realise the pivotal role that all our indigenous media play in our culture, values and national identity.
There is a strong, positive link between media consumption and national belonging. We cannot take risks with the health of our news media; the sustainability of independent journalism in Ireland is a national crisis-in-waiting.
Independent review required
Other countries take this matter seriously. For example, the Cairncross Review, commissioned by the UK Government to review the sustainability of high-quality journalism was published in February 2019. It examines the state of the news media market, the threats to the financial sustainability of publishers, the impact of search engines and social media platforms, and the role of digital advertising.
The report found that investigative journalism, public-interest news and democracy reporting are the areas of journalism most worthy and most under threat from the market power of online platforms. It made several recommendations to create a better balance between publishers and platforms, and to persuade the online platforms to use their position in more accountable ways.
These recommendations include:
– Direct support from government to encourage payment for online news content and public-interest journalism
– An investigation into the online advertising market to ensure fair competition
– The establishment of a regulatory body that would oversee the ‘quality’ of online news
– Supervision of the introduction of a code of conduct to govern commercial arrangements between platforms and news publishers
The Irish Government should follow the UK’s example and conduct a similar review here. If sustainability of quality journalism is a serious issue in the UK, with 66 million people, then, with 7% of that population, we are in a precarious position in this country.
A radical solution to preserve Irish journalism
Returning to the New York Times; clearly its key advantage is scale, and it is equally clear that Irish publishers’ key disadvantage is the complete lack of scale. This begs the tantalising question: what if Ireland’s two most significant news publishers – the Irish Times and INM – joined forces to create one powerhouse of Irish journalism: a single commercial entity, united operationally, but with separate editorial boards to preserve the different editorial ethos of each brand?
Before balking at the idea and thinking of all the reasons why it shouldn’t happen, think of the consequences of not doing it. To focus your mind, have a look at the following chart that shows the combined revenue for The Irish Times and INM since 2004:
The declining revenue shown in this chart is driven by the sharp drop in newspaper sales, which have fallen by 52%2 since 2004, and there is no sign of this trend abating. The print product is clearly not the future and without significant investment in digital products for which consumers will pay, the business model for news media in this country is bleak.
Both publishers are doing an excellent job with limited resources, but they are unable to entice consumers to subscribe to their current online products in large enough numbers to make the existing model viable in the long term, and this will not change without some radical intervention.
In Core’s view, the only way to address this situation is to create a business of sufficient scale that can invest deeply in devising and implementing a compelling multi-media content strategy across a suite of diverse brands servicing all strands of Ireland.
These brands have formed a strong, enduring bond with people and built an important legacy that dates back to 1859 and 1905 for The Irish Times and INM respectively. They must survive.
Such a project would be fraught with challenges, the greatest of which would be the ownership structure. The Irish Times is owned by a trust, set up to ensure that it would be published as an independent newspaper with specific editorial objectives.
Any profits must be used to strengthen the newspaper. INM, on the other hand, is a PLC, which has an obligation to generate profit to maximise shareholder value. Clearly, these are competing ideals that would need to be reconciled.
In Core’s view, there is only one way forward; that is the establishment of a new trust that would absorb both parts of the business to ensure that the company has stability, long-term strategic intent and high journalistic ambitions.
INM and The Irish Times are very different publishers, but they both have a one thing in common: they face an uncertain future.
Unless Ireland is happy to settle for a bleak outlook where most media are controlled by global players, we should carefully and enthusiastically consider radical solutions like this that protect our culture, diversity and independence.
1. NYT annual results (2018)
2. ABC average weekly sales for INM titles & Irish Times combined