Wolff: Newspapers, embrace digital or resist – USA TODAY
Two dramatically contradictory views by the CEOs of the world’s two leading newspaper companies crossed each other in recent days.
Mark Thompson, CEO of The New York Times Co., once again pledged his company’s fealty and pegged its survival to the digital future. Robert Thomson, CEO of News Corp., the world’s biggest newspaper company and parent of The Wall Street Journal, aggressively attacked the digital world, in particular Google, in essence laying blame for the collapse of much of the newspaper industry at its door.
Mark Thompson is the former head of the BBC who was hired two years ago by the Times Co. proprietor and ultimate boss, Arthur O. Sulzberger Jr., who has tried to make transformation and a kind of dernier cri his hallmark. Thompson’s mandate is to spearhead the long-term strategy for the paper — that is, to try to build a sustainable digital business financed by cash from the newspaper business before newspapers die altogether.
Robert Thomson is a former Financial Times journalist who defected to Rupert Murdoch’s News Corp., first to run The Times of London and then The Wall Street Journal. Reporting to Murdoch, 84 — who has spent his life in the newspaper business, earning billions from it and with billions still to defend it — Thomson heads all the Murdoch papers, spun off from the Murdoch entertainment holdings two years ago. Thomson’s job is to support Murdoch’s hoped-for legacy — that is, to have saved the very idea and business basis of the newspaper.
Both CEOs are trying to thread the finest of needles: to find a way for print news organizations to profit in a world that has undermined the basic business models and relationships that newspapers have always counted on for success, reader loyalty and advertiser interest in those readers.
Thompson outlined The Times Co.’s position recently in an interview with Margaret Sullivan, The New York Times’ public editor, who openly expressed her concern about the paper’s survival. Thompson’s bullish version of the digital future was perhaps more that of a politician than a strategist, and Sullivan was clearly skeptical about his assurances. Despite 70% of the company’s revenue coming from the paper product, in five years, according to Thompson, digital revenue will surpass print — even though there is no model for such a successful transition, digital ad rates continue to fall, mobile (which has even lower ad rates) increasingly dominates the news market and Google and Facebook keep squeezing news content producers.
Things will continue to be difficult, “an emotional roller coaster,” Thompson called it, “until technology and user behavior stabilize,” a view perhaps more wistful than strategic. What choice is there, he seemed to be saying, other than to hope for some new digital business basis to emerge and replace the traditional advertising structure, even if it was not clear what that might be?
News Corp.’s Thomson, on the other hand, speaking at a media awards dinner in Australia where his company controls more than 70% of the newspaper market, delivered perhaps the baldest, most unfiltered and least politic attack by an old-media executive on new-media practices. In effect, he reduced the competitive issues not to changing technology and fickle customer behavior but to the other side’s systematic undermining of intellectual property laws. Powerful platforms used their power to steal other people’s content. What he called “the distributionists,” singling out Google and Facebook, “are helping themselves to” content created by others, “co-opting and corralling audiences and consciously devaluing brands.”
He accused Google of “piracy,” “zealotry” and “kleptocracy.”
In the Times Co.’s view — reflecting the consensus of the digitally elite world — technology can’t be stopped. Hence, the digital world has won, its business basis has prevailed and there is no choice but to make the most of it. The world is as it is. Indeed, the Times, which has tried with some success to build an online subscription business, has recently agreed to let Facebook carry aspects of its content free of charge.
As for News Corp., which has long struggled with the digital world — in both its disastrous acquisition of MySpace and its hapless development of the iPad-exclusive paper The Daily — its view might be dismissed as that of an angry old man. But it is something of a return to a traditional media perspective, wherein it’s wise to remember that someone is always trying to steal your business. In this view, the media do not so much find themselves at a transformational nexus — as the digital world so relentlessly proselytizes — as at a competitive one, where the digital world uses “transformation” as the cover under which it has leveraged an unfair and arguably illegal advantage by ripping off its rivals.
What are the implications of these radically diverging views and paths?
For the Times, despite its stiff-upper-lip optimism, accepting the new digital business basis would seem to lead at best to an inevitably smaller enterprise or to a sale —Thompson rejected this possibility, but Sullivan certainly put it in the realm of obvious options — to someone better able to support the Times’ ambitions.
News Corp, which has resources, anger and aggressive instincts, perhaps is getting ready to join the forces coalescing against Google in many parts of the world, by launching a better-late-than-never epochal law suit and — hardly a first in Murdoch’s career — going for broke one more time.