What newspapers can learn from television

What newspapers can learn from television

Oct 5th 2013 |From the print edition

LAST November Mike Darcey, then a top executive at BSkyB, a British satellite-television company, received a phone call from Rupert Murdoch, the boss of News Corporation. Mr Murdoch wanted him to run News UK (formerly News International), his scandal-plagued British newspaper unit, even though Mr Darcey had never worked in publishing. “Don’t worry about it,” Mr Murdoch said. “It’s exactly the same” as television.Television and newspapers seem to have little in common. The business of flickering screens is thriving while newspapers are shrinking. So Mr Darcey, who took charge in January, is pushing his titles, including the Sun, a populist tabloid, and the Times, a higher-brow paper, to learn lessons from his former industry.

away content to some readers while asking others to pay. The Times learnt that lesson in 2010, when it started charging for online content. TheSun started doing so last August. Both papers, historically more dependent on fickle news-stand sales than steadier subscriptions, are trying to entice subscribers so they can have a direct relationship with—and collect more data on—their customers.

Pay-TV companies lure and retain subscribers by adding features, such as free films and channels. Mr Darcey thinks newspapers should, too. Earlier this year News UK reportedly paid £30m ($48m) for three-year mobile and online rights to clips from English Premier League football matches. They sit behind the newspapers’ paywalls and are thus an incentive to subscribe. If this works, other newspapers may join the bidding for rights to sports and entertainment videos.

Newspapers need the fresh thinking outsiders can provide. Jeff Bezos, the founder of Amazon, an e-commerce giant, will no doubt shake up the Washington Post, which he recently bought (with his own money). Mr Darcey, a tough New Zealander, does not have Mr Murdoch’s sentimental attachment to newspapers. “If you keep saying ‘newspaper’, there’s the risk you constrain your thinking,” Mr Darcey says. “We distribute our branded proposition in several ways, one of which is…on paper.”

But Mr Darcey’s immediate task is to arrest the drop in revenue from readers and advertisers. Since putting up its paywall the Times has increased paid sales slightly, to around 536,000 (as of March 2013); the share of digital and print subscriptions has risen to about half. But the Times is still not profitable and has not been in recent memory. The plan to charge for online access to the Sun, even at the low price of £2 per week, is risky, says Mark Oliver of Oliver and Ohlbaum, a media consultancy. Readers of tabloid newspapers are poorer (the average Sun reader earns one-fifth the income of a Times man). They have not yet been willing to pay for news online.

Mr Darcey will have to read more unwelcome headlines about his own company. In 2011 it was revealed that journalists at the News of the World, a News International tabloid, were hacking the phones of celebrities and others, including Milly Dowler, a murdered schoolgirl. Mr Murdoch quickly shut the newspaper. On October 28th Rebekah Brooks, News International’s former boss, who has been charged with conspiracy, will go on trial, along with seven others. The courtroom drama may not hurt newspaper sales—few readers associate the Sun and the Times with phone-hacking—but it could damage newsroom morale. The Sun thrives on front-page scoops. Journalists may pursue them less vigorously when rivals festoon their front pages with images of their former boss in court.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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