It's no con about the internet - deal with it

Two weeks ago, my former colleague John Duncan used these pages to take what might politely be called a pop at newspaper owners’ investments on the web.

He pointed out that The Guardian’s world-conquering website still had fewer UK users on a daily basis than the paper had readers; that newspaper owners had been ‘conned by the numbers from their web departments’; and that the internet was not ‘a beast’ but ‘a poodle’.

Now, I don’t have a problem with Duncan’s maths about comparative UK readership of The Guardian and Guardian Unlimited. However, I do think it’s pretty irrelevant, and I have a huge problem with the conclusions he draws, his assessment of the UK online market and, perhaps most of all, his assertion that online teams have ‘conned’ unsuspecting boards into making investments.

Before I get going, let me introduce as my first witness Bill Keller, editor of The New York Times, interviewed earlier this month by I Want Media.

‘At present, the print edition of The New York Times supplies most of our revenue and profit. I don’t expect that to change in a hurry. We have a variety of levers we can adjust to keep the print newspaper healthy. We can add features that attract new advertising. We can reorganise for greater efficiency. (One major example: consolidating New York area printing into a single, modernised plant.) We can raise prices. We can trim costs. And so on,’he told the website.

‘But the web audience is growing at a great clip, while print circulation is not. And online revenues are growing faster, too, albeit from a smaller base. If the trend continues, there’s little doubt – eventually – online will become the main business.”

I don’t know Keller, but let’s just assume that he didn’t get where he is today by not having a clue about the future of his industry. What he is describing is the process of evolution and transition that the entire newspaper industry is going through.

Right now, if you want to add up daily readers and revenues, print wins by a long mile. But every piece of research tells the same story. People are spending less time with newspapers and more time online. The trend is, of course, particularly pronounced in people under 30.

What will things look like in five years? What about in 10? And do you really think you can wait until then before you start to take digital seriously? Taking it seriously, of course, means investment in things that will best equip us for the next decade and beyond.

That means investing in journalism, and in our brands. It means investing in engaging with our readers and users and making sure we understand them like never before. It means providing the very best service for our advertisers; and it means making sure that we have the best editorial, commercial, technical and production teams possible.

Sometimes that will mean investing in digital, sometimes in print – and, more often than not, in both.

Does this mean everyone should be able to get what they want? Hell, no! An organisation where there aren’t compromises – often painful ones – either has too much money or too little ambition.

What about Duncan’s assertion that we will have no luck selling advertising? Well, our year-on-year figures would prove the opposite. And so, apparently, would those from the rest of the industry. The Association of Online Publishers’ annual survey revealed that its members – who include pretty much all of the UK’s main media owners, print and broadcast – experienced an average of 63 per cent growth in digital revenues last year; ahead, as it happens, of the online market as a whole.

And this market is, frankly, growing like mad. The current forecasts for growth in the UK market indicate that, on average, digital spending in the UK will grow from a £2bn market to approximately £4bn over the next two years. In other words, there is likely to be some £2bn of new money coming online.

But isn’t much of this going to search engines (particularly, Google)? Well, even if 50 per cent of it is, that still leaves £1bn of new money left for us to fight for.

Of course, that money is not going to be handed to us on a plate. We will face competition from all quarters, from global portals to start-ups hoping to feast on slivers of our classified revenues. This is our new reality. It is our new competitive landscape. There is no shortage of people who want to eat our lunch; and this is precisely why our digital offerings need to be in the best possible shape.

Duncan says that broadband penetration is high, and that UK online audiences are therefore unlikely to grow. Well, yes, growth rates are slowing – hardly surprising seeing as we have had the fastest-growing broadband penetration among the major economies for the past five years, according to figures from the Organisation for Economic Co-operation and Development.

But we are nowhere near saturation point yet. Last month PricewaterhouseCoopers forecast that we will move from 50 per cent of households having broadband this year to 80 per cent by 2011. All the evidence shows that the longer people have a connection, the more time they spend doing things online. So internet use in the UK is set to grow for many years yet.

Don’t get me wrong: print has many healthy decades ahead. But those will be about gentle, and sometimes not so gentle, decline.

The online world, meanwhile, offers smart media owners potential for growth – in reach, reputation and revenue. That’s not a con. It’s a fact. And it’s time to learn to deal with it.

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