No independent future – merger, digital or bust

Someone is sitting around with a slide rule today trying to workout what to do about the Independent. Reports say it is up for sale with a merger with the Evening Standard as one option, outright closure a possibility, and going online only another. But is a digital only future really an option at all?

The Times reported today that Sir Anthony O’Reilly is actively seeking to sell The Independent 11 years after he took control of the title.It follows reports at the weekend of the huge debts that O’Reilly and his fellow investor Denis O’Brien are dealing with.

That means finding a buyer for a title that despite tough cost cutting, is suffering unsustainable losses. This is a point conceded by O’Reilly.

The options are finding investors, find a buyer or close the paper. The strongest current of speculation is that Alexander Lebedev, the Russian oligarch who bought the Standard in January, will emerge as The Independent’s owner.

If he does it seems unlikely he will continue to publish the two papers separately, opening the way for a merger that could create a new stronger more stable paper. It is the kind of reshaping of the landscape that the downturn, the decline of print, seems to demand.

If Lebedev did buy it, but decides to keep it separate, the option is to cut further and to possibly only publish it online.

There was some discussion of this last year when I blogged about it following a post by Roy Greenslade.

It is too early to tell how a newspaper making a switch to online only will fare. Will its traffic surge or will those readers without a print anchor cut loose and drift elsewhere.

There are simply not enough examples or data around and that which we do have is flawed.

For instance, just weeks into life as an online only publication, web traffic for Seattlepi.com (what used to be the Seattle Post-Intelligencer) is down significantly, while former rival the Seattle Times got a big boost in online readers, according to Nielsen Online.

However, Hearst is disputing the Nielsen figures and says they are flawed. It claims its internal tracking service show that Seattlepi.com traffic jumped nearly 10%.

 

Another example we have is a recent Finnish study by Neil Thurman and Merja Myllylahti, from the University’s Graduate School of Journalism. In ‘Taking the Paper out of News’ they looked at Finnish financial daily Taloussanomat, which has also killed its print edition and gone online only.

Their results showed that (and to their surprise) when Taloussanomat stopped being available in print, traffic to its website did not increase compared to newspapers who had kept a print edition. Six and a half months after going online-only, unique users were down 22% and page impressions had fallen by 11% .

Overall, the pair estimated that readers now spend about 75% less time reading the title online than they did when it was in print and on the web. My suspicion is that the Independent would go the same way. In the near term future at least, these publications could wither – that said, I think it is too early to tell.

 

Whatever happens could well happen very quickly and I am guessing that the Independent has little future as a standalone publication.

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  • http://www.penmaen-media.co.uk Carolyn Morgan

    A thought-provoking blog, Gordon. If the Finnish example is correct, then there is a value in maintaining both print and online versions. The challenge is being able to produce the print version at a significantly lower cost than before (say half!). Perhaps the approach is to strip out the unnecessary content from print and focus on what it does best. That worked well for Car magazine a few years back, when taking the news and stats out of the print edition and putting them online actually resulted in higher revenue for the more focussed magazine. See my blog post on developing complementary propositions: http://www.penmaen-media.co.uk/index.php/2009/01/how-not-to-cannibalise-your-offline-brand-with-your-online-activity/ for more details. Carolyn

  • Gordon Macmillan

    The Finnish example is interesting and it could be repeated in Seattle. It seems to suggest if you have a strong rival who has a healthy print and digital operation then they will beat you – in the near term at least.

  • Kevin Gordon

    Hi Gordon,

    A very interesting Blog. Do or die or don’t do or die. That’s how it looks on the outside. There seems several options available. The Independent could sell the paper and not the company. This would mean the new purchasor would not be lumbered with the historic debt. If the purchase price can help relieve the debts and stop them from mounting, it has to be good news.

    Perhaps the governement would like to step in. This provides an opportunity for radical change, debt control, and minimum unemployment (which the government will eventually pay-out to the unemployed). Rather than paying people to stay at home with no income, stuck in a poverty trap that tax-payers end up paying for, they can become part of the solution. Retrained to run the Independent in a totally Independent way that is different to any newspaper, without forsaking news, content, writers, journalists. In fact there is a way this can be done, but it need investment (just as the government has done for the banks). Why not? They can print as much money as they like.

  • Gordon Macmillan

    With today’s news that Independent News & Media reporting a pre-tax loss of €161.4m (£145m) in its 2008 annual results whatever happens I imagine it will happen quickly. You can’t go around losing cash like that for very long.

  • http://www.participationmarketing.co.uk Alastair Duncan

    In isolation, you can’t. The big question about going online only is whether the independent has a strong enough brand to survive as an online proposition only.

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