Archive for September, 2011

Murdoch suffers at the hands of ‘Generation Won’t Pay’

Posted in Media with tags , , , , , on September 29, 2011 by Tom Leatherbarrow

(An excellent blog from my colleague Stephen Graham which I thought was deserving of wider circulation)

It’s been a torrid year for the Murdoch family and Rupert in particular.  The media mogul was ‘humbled,’ during hacking gate, closed his only UK newspaper which actually made any money and was even accosted with a custard pie.  You’d forgive him for thinking that things couldn’t get much worse, but, as they say in old blighty, ‘when it rains, it pours.’

It would seem that Murdoch’s venture into the digital world has not provided the ray of sunshine it may have been hoped to be and I’m not talking about paywalls.  The tablet newspaper ‘The Daily,’ launched in February, is averaging a rather pitiful 120,000 readers a week.  Bearing in mind that when the paper was launched in February it was declared that it would need an average weekly readership of 500,000 to break even, it’s safe to say that so far it has not been a success.

Why?  It would appear that once again News International is falling foul of what is fast becoming a cast iron law of digital communication that, if it is on the web, then ‘Generation Won’t Pay’ wants it for free.  No matter how insignificant 99 cents a week is, against a plethora of quality and more importantly free content online, we just won’t reach into our pockets.

It is hard to over-emphasise how much of a blow this is for Murdoch.  The tablet was seen as a way of extracting revenue from a bust financial model, namely print media.  Now it would appear that it is back to the drawing board unless of course he makes the Times / Sunday Times paywall actually work.

Don’t hold your breath waiting for any readership figures on that though!

Dinner with an American Friend

Posted in business, Media with tags , , , , on September 22, 2011 by Tom Leatherbarrow

At the risk of sounding like a stuck record (now there’s an analogy that will pass the iPod generation by) I feel compelled to return to a favourite current hobby horse, namely the divergence between economic reality, particularly in the manufacturing sector, and economic reporting.

I had the good fortune of being able to catch up with the President of one of my clients’ North American operations at a dinner on Tuesday evening in Hannover. He was in Europe to promote his new valve body production machine at a German trade show and was in good form covering a range of topics.

We started with business performance. “How are things at the moment?” I asked.

“Great,” he replied, “we’ve taken on 200 extra employees this year already.”

Noting the slightly sceptical look on my face he went on: “I know, it’s like there’s a parallel universe between what is actually going on and what the media are saying!”

Well yes quite, I’ve certainly read enough in the Washington Post or New York Times to suggest that the American economy is shrinking at an alarming rate. “Oh I tell my guys not to read any of that stuff. You wouldn’t get out of bed of a morning if you took them seriously.”

He offered as an example, recent reporting of the American version of our Purchasing Manager’s Index. “The Index had fallen from 65 to 55 and it was reported as if the world had fallen in, but 55 is still growth!”

However, my American friend did concede that wider economic problems outside of manufacturing could make life difficult for Obama in 2012. “He’s going to find it awfully difficult to get re-elected because of problems in the wider economy. The big advantage he has is that the Republicans can’t find anyone to rival his political charisma that is also electable. If they do find someone then he’s in real trouble.”

I want high quality, intelligent, thought-through analysis and I want it now!

Posted in Uncategorized on September 15, 2011 by Tom Leatherbarrow

Roy Greenslade, whose blog at the Guardian website should be obligatory reading for those in media land, wrote an excellent piece in last night’s Evening Standard about the strange death of Sunday newspapers which can be read HERE.

Greenslade rightly hangs his article on the ‘lost’ 700,000 News of the World readers that have not gone over to another Sunday newspaper since the demise of the NOTW in June. However, ‘Woy’ points out that Sunday newspapers have been in decline for years due to changing lifestyles (Sunday is no longer a day of calm reflection, you are more likely to be on the golf course, sailing a boat or paragliding apparently) and the demise of the NOTW has only accelerated the process.

The real crux of the matter though is that, in the era of 24 hour news, the agenda has moved on by the time Sunday comes round. It used to be that something would happen on Tuesday or Wednesday and the daily newspapers would report the facts leaving it to the Sundays (the Sunday Times was especially good at this) to provide the in-depth analysis and the behind-the-scenes story.

Thatcher’s downfall in 1992 was reported in this way, with lots of juicy gossip about which grey-suited men had actually gone in to see her and tell her the game was up. Of course the journalists who wrote that analysis would probably have known much of the background on the Thursday or Friday but were able to hold the information back for Sunday’s paper.

Now, in the era of blogging, the juicy details come out much quicker. I suspect if a Conservative Prime Minister was dethroned nowadays the likes of Iain Dale, Conservative Home or Guido Fawkes would be able to tell me who said what to whom that very evening.

That ultimately explains the strange death of Sunday newspapers. If I want good quality analysis nowadays I can get it almost instantaneously from a myriad of sources – why wait until Sunday?

Cutting MPs will shrink the talent pool even further!

Posted in business, Politics with tags , , , on September 13, 2011 by Tom Leatherbarrow

I’ve been reading the second volume of Chris Mullins’ diaries, the former MP who stepped down at the last General Election. Entitled Decline and Fall the diaries chart the final two years of New Labour. Before you ask, yes Gordon’s behaviour was as bad as we have been led to believe!

The book is chock full of lovely little anecdotes about the great and the good, from Gordon punching the headrest of his chauffeured limo in frustration, to a weekend with Prince Charles discussing environmental issues at Highgrove (“of course he’ll make a bloody awful King, he wants to change things”) along with a series of cameos by my own favourite former MP, Alan Simpson.

Anyway, the reason I bring this up is that Mullin was granted the honour of a valedictory speech in the House of Commons before the last General Election. During the course of his speech he said this about Government:

“Mr Speaker, government needs to become a little less frenetic. The practice of annual reshuffles is massively destabilising and confers enormous power on the civil service. There have been eight secretaries of State for work and pensions in the ten years since that department was invented. Of late we have been getting through Home Secretaries at the rate of almost one a year. Goodness knows how many Health and Education secretaries we have had. We are on our tenth Europe minister. Our ninth or tenth Prisons minister. I was the sixth Africa minister, the current incumbent is the ninth. Mr Speaker, this does not make for good government.”

From personal experience I can add to this. During the time of New Labour from 1997 to 2010 we had 10, (count them, 10) Energy Ministers! As one of my clients in the building products sector supplying renewable energy equipment, once said to me, “we get one Minister up to speed and then we have to start all over again.”

Why do I bring this up? Because today our Coalition Government is proposing to reduce the number of MPs to 600 from 650. That means future Governments will be taken from an even smaller talent pool than previously (unlike the American President who gets to appoint a Commerce secretary for example who has actually worked in industry!).

This is bad policy as Michael White points out today in The Guardian. At best it is ill-thought through and populist (after the expenses scandal I suspect it will gather a lot of support in the country), but at worst it is gerrymandering!