A Perfect Storm for Newspapers
The newspaper industry seems to be in denial about the extent of the crisis it faces. It is in danger of looking like Michael Fish the night before the big storm in 1989. Whilst News International hopes that its managerial blindness to hacking and other immoral practices, will see off the worst of the Hackgate controversy, Trinity Mirror, whose results are published today, has launched a review into it’s own practices. Oddly, and despite the furore around what Piers Morgan may or may not have known about the hacking of Heather Mills phone, there is to be no root and branch investigation into the past. It is claimed that the Heather Mills voice mail was received anonymously. Even if true, I am not sure this resolves the matter. Unless the source was Heather Mills herself, which seems improbable, then the material must have been secured illegally – and Trinity Mirror must have known that. What is the moral difference?
Intellectually this is the same stonewall approach used by News International, for several years. But now the lone rogue reporter defence has been exposed for what it was – forlorn hope that if News International covered their eyes with their hands, when they eventually looked between their fingers the monstrous allegations will have vanished. Let’s hope that Trinity Mirror is not making the same mistake.
Meanwhile The Star, bastion of the fourth estate, is using the cynical tag line “The paper you can trust,” in it’s television advertising. All the tabloids have increased print orders and launched marketing campaigns to capitalise on the closure of The News of the World. The management effort being brought to bear on milking every last drop of commercial benefit from the Hackgate crisis appears to dwarf management concern about their own organisations possible culpability for producing unethical journalism.
Newspaper management teams may judge that their readers will in the end just shrug their shoulders and carry on buying the news, tainted with Hackgate or not. Remember the faux wailing and gnashing of teeth over the behaviour of some parts of the press after the death of Princess Diana? The press has learned that the public moral outrage over the hacking of a dead girls phone will also pass with time.
Meanwhile the economics of newspaper publishing are brought home in sharp relief this as Trinity Mirror updates it’s results. The expected uplift in sales of the Sunday Mirror will do little to disguise the full extent of the challenge facing Sly Bailey, the Trinity Mirror CEO. The share price has dropped by two thirds in the last year. The serial cost cutting that has been the consequence of dwindling revenues has to an extent shored up the profits but it has not disguised the fundamental weakness of the business. Like every other newspaper group in the uk there is no discernible strategy for getting from here to somewhere where shareholder value is increasing.
When readers are losing faith in the integrity of what newspapers do, and shareholders are losing faith in the future of newspapers, when the economy is teetering on the edge of a double dip recession, when technology change is challenging the very essence of how newspapers do business, the conditions for a perfect storm are arising.
The response to this storm will require a new round of fresh thinking. I can’t wait to see what a digital guy makes of it all. What on earth will Ashley Highfield do with Johnston Press?
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