Mort Zuckerman: web publishing is 'swapping pennies for dollars'

New York Daily News publisher Mort Zuckerman has told a House of Lords committee that new online business models for newspapers are just substituting “pennies for dollars”.

The House of Lords Select Committee on Communications travelled to New York in September to interview Zuckerman as part of their inquiry into media ownership. The minutes of that meeting were published today.

Zuckerman said that live television news and newspaper readership has declined over the last two decades.

He said that the Daily News has always made a profit but this year it may not, due to the large decline in advertising revenue and the effect of online competitors on advertising. He said he is trying to develop new business models for the web but that this is ‘substituting pennies for dollars”.

Zuckerman said that the new challenges have meant that his magazine US News and World Report has gone from 12 foreign bureaux to none. He said the magazine now focuses on ‘news you can use’such as rankings for colleges and hospitals.

According to the Lords report: ‘A great story on Iraq, or politics makes no difference to their circulation figures but their rankings are of key importance to readers and advertisers. All new providers must find added value: analysis, opinion, parody, something not available elsewhere.”

He said of his main rival in New York, the Murdoch-owned New York Post, that it is a ‘non-economic competitor’– sold cheaply which charges less for advertising.

He said that he never gets involved in the news pages, but that he does get involved in editorials on areas of special interest to him.

The day before Zuckerman met the Committee, he said he had cut a leader on teachers’ pay as he felt it was too sensitive a time for the paper to make comment.

Zuckerman said that be believes some owners get involved in news pages to further their own business interests but that he sees this as contrary to the tradition of American news values.

New York Time publisher Arthur Sulzberger told the committee that they can no longer define themselves by the word ‘paper’and instead are defined by ‘news”.

He said that not only is his paper’s circulation in long-term decline but that over the last four to five years, advertising has also declined. This is the first time advertising revenue has declined while the economy has been growing.

He said advertising revenue on the web may be worth less than on paper but the cost of producing news on the web is also cheaper.

Sulzberger said that like other US papers the New York Times maintains a clear division between news and editorial. The editorial line of the paper is decided by the editorial editor and the proprietor. He said that the proprietor only gets involved in the news agenda when it has national repercussions.

Sulzberger said he sees about 10 per cent of editorials before they are published, for example when they are changing a long held position or making a new political endorsement. He stated he has never had a serious disagreement with an editor. He appoints them and they already have ‘the same world view”.

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