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Financing the British press – two paths

The financial difficulties faced by the press have been well documented in recent years – but in the headlines today we see two different responses to the crisis.

The first answer to the financial difficulties is the more old-fashioned – get a very wealthy person to support you in hard times. The example is Alexander Lebedev’s purchase of the Independent, a loss making title. Lebedev is a Russian billionaire who already owns the London Evening Standard.  Many will breathe a sigh of relief as the Indy is being saved. In tough times, at least Lebedev is committed enough to prop up a title which the market is not supporting. On the other hand, it is a considerable amount of power and potential influence being handed to one person simply because he can pay for it. There is already talk of whether this will lead to a change in editor and we will wait to see how, if at all, it affects the content of the paper. So while the deal means the Indy survives, there are still concerns about its future. Along these lines, an article in Tribune sees Lebedev as a new Murdoch or Maxwell, while Peter Wilby worries that the paper may be steered away from hard-hitting journalism. Who says the press baron belonged to a bygone era?

The second answer to the press’ financial difficulties is the announcement that the Times will be charging for online access – at £1 a day or £2 a week. While, like Lebedev, Rupert Murdoch has been willing to support loss-making titles in hard times, it is still necessary to find a long-term source of income from the Times’ journalism. Murdoch has not gone for the much discussed micro-payments model, in which readers pay a very small sum to read specific articles. Instead, the £1 a day charge will give the reader access to all the articles in the Times. It therefore requires the reader to commit to that particular newspaper. By contrast, a micro-payment model would have allowed people to read articles across a range of titles at a small cost. The problem is that a micro-payments scheme is likely to work only if a number of papers all commit to the scheme (and if payments are collected in the same way).

The Times is not the first to adopt the subscription model, others such as the FT have already done so. If it is a success, Murdoch’s strategy is likely to be followed by other newspaper sites. Yet it comes with risks for a national newspaper seeking a mass audience. The first risk being that people won’t go for it and will get their news from other free websites. This could reduce the paper’s direct audience. Secondly, the paywall reduces the scope for articles to be linked to by other sites and subject to online  discussion – this reduces the indirect audience (of those who encounter the Times’ content without being a regular visitor to the site). These trends could reduce the number of eyeballs, which in turn makes the site of less value to some advertisers and may curtail the paper’s political influence.

These are just risks and I’m not sure they will eventuate. The Times has a long history and committed readership, so I find it hard to imagine the paper’s influence seriously diminishing. But it is an important experiment which may point the way for future financing of the British press.

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