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In a speech he's due to deliver to West Midlands' CBI this Thursday, Marc Reeves paints a frank assessment of why the news biz is in trouble: "But don't feel too sorry for it."
Here are some highlights…
"I spent the last 15 years of my newspaper career regularly attending industry conferences in which the threats and opportunities of the internet were endlessly discussed and analysed. Pretty much everything that has come to pass was predicted, but what did the big newspaper groups do? Very little that was right, it turns out.
"Saddled by a shareholder base that had grown used to the cash cow returns of a monopoly, the regional newspaper industry in partiular was structurally incapable of adopting the entrepreneurial approach that is the only option available when almost every aspect of your business model is rendered obsolete.
"The internet hasn't fixed the newspaper business model – precisely because it remains the newspaper business model ... Despite all the slash-and-burn cost-cutting of the past few years, the newspaper business is balanced precariously atop extraordinary pensions obligations, massive ongoing capital bills for print plants, and debt that was affordable when cashflow was fuelled by lorry-loads of classified revenues but is now raping the bottom line.
"So even 'forward thinking' online-minded, digitally enabled newspaper groups are trying to fight with several limbs tied behind their backs."
Reeves says News Corp.'s paywall strategy is "such a wrong-headed argument I hardly know where to start to demonstrate to you its folly" because, even in print, "your 70p goes absolutely nowhere to meeting the full costs of what you're reading".
It's not exactly news that the newspaper business is in trouble. Media companies have been among the hardest hit in recent years, even before the recession, and newspapers and other journalism outlets have been paring their staff drastically to compete better in the digital age. Newspaper revenues from advertising have fallen about 45 percent since 2000, according to a report from the Pew Project for Excellence in Journalism cited in the FTC document.
The discussion document does not contain any recommendations endorsed by the FTC, but instead presents a set of suggestions collected by the FTC staff in preparation for a roundtable discussion at the National Press Club later this month.
Other suggestions include a 7 % tax on commercial radio and television broadcast spectrum, a 5 % tax on consumer electronics (already dubbed the "iPad tax" by CUNY journalism professor and Entertainment Weekly founder Jeff Jarvis), a tax on the auction sales prices for commercial communication spectrum, a 2 % sales tax on advertising, and a 3 % tax on monthly Internet service and cell phone bills.
Other proposals include industry-wide licensing arrangements for the news, statutory limits to the fair use doctrine in the Copyright Act, and federal "hot news" legislation to keep various Internet outlets from poaching on the news-gathering efforts of traditional wire services and the like.
By Max Colchester/Wall Street Journal
PARIS — The management of French daily newspaper Le Monde said Thursday it wanted to sell a majority stake in the company, ending nearly 60 years of journalist control.
Le Monde was founded in 1944 on the principles of political and economic independence, and its journalists control a majority stake in publishing company Le Monde SA through a complex shareholding structure. They have the power to dismiss the editor-in-chief and the publisher.
Amid falling circulation and ad revenues, Le Monde last year borrowed €25 million ($30.6 million) to finance its operations. Between 2012 and 2014 it must repay a further debt of €69 million, the newspaper's publisher, Eric Fottorino, wrote in a front-page editorial. The newspaper recently axed 130 staffers.
"A page in the newspaper's history is about to turn," Mr. Fottorino wrote. "Since 1951 the independence of the newspaper has stemmed from journalists' control of its management and editorial line."
Mr. Fottorino said investors were being invited to take a majority stake in the group by mid-June. Lazard banker Matthieu Pigasse, Xavier Niel, the billionaire founder of telecommunications group Iliad SA, and Pierre Bergé, partner of the late fashion designer Yves Saint Laurent, had expressed interest in investing, he wrote.
However, French media and defense conglomerate Lagardere SCA, which owns 17% of Le Monde's publishing company and 34% of Le Monde's website, has said it won't invest further in the company.
The quest to find investors in Le Monde comes two weeks after French media baron Alain Weill gave away a 78% stake in French business daily La Tribune to its managing director for €1, plunging the paper's future into question.
Le Monde is particularly vulnerable to a downturn because, unlike most other French national dailies, it isn't owned by a large business group. Serge Dassault, owner of business-jet and combat-aircraft maker Dassault Aviation SA, controls Le Figaro, the country's biggest daily paper by circulation. Bernard Arnault, chief executive of luxury group LVMH Moët Hennessy Louis Vuitton SA, bought the country's leading business daily, Les Echos, in 2007.
In his editorial Mr. Fottorino stated that the publishers of the paper would require potential investors to guarantee the paper's independence.
That sense of proportion also means that I am totally unconvinced by media visionaries who seem to believe that Jobs will prove to be the saviour of the newspaper industry by bringing us the iPad.
There are five reasons for their belief. First, though people do appear to be reluctant to pay to obtain online news through straightforward subscriptions, the iPad - being so much like a mobile phone - will encourage people to stump up. Second, paying for applications to download material is a more natural act than subscribing for access to a website on a desktop or laptop computer.
Third, the portability of the iPad makes reading text material much more like the newspaper experience. And fourth, the 9.7-inch screen is big enough to make it easy and pleasurable to consume lengthy amounts of text and, just as importantly, high quality advertising content.
Then there is a very different fifth reason for the fervour - the iPad blessing administered by Rupert Murdoch. He said in a speech a month or so ago: "It may well be the saving of the newspaper industry."
As we in the journalism business know well, when the chairman of News Corporation speaks, the media world not only listens, it treats every sentence with reverence. No Apple PR could have come close to securing the kind of positive press reaction that greeted Murdoch's statement.
Publishers and editors, stressed by years of declining newsprint sales and worried by the difficulty of creating a sustainable online business model, lined up to nod in agreement. At last, rescue was at hand. If Rupert says it will work, then it must.
At this point, it is as well to remind ourselves that Murdoch was not talking about newsprint being saved, but the newspaper business itself. The vision is of iPads - or, in fairness, other e-readers from competitors - becoming the reading, listening and seeing device of choice for the coming generation of adults.
That will lead to that moment when printing becomes uneconomic, terminating the need for presses, newsprint, ink and trucking. Content will become so much cheaper to distribute through e-readers. And, of course, it comes with all the benefits of online journalism, such as interactive journalistic participation.
It's fair to say that this vision existed long before the advent of the iPad because plenty of digital gurus argued years ago that computers were the future of news publishing. But Apple's new innovation has convinced Murdoch, and many other mainstream publishers, that they might have found a way to make commercial sense of the inevitable move from print to screen.
In the US, where the iPad has been available since April, app take-ups have supposedly taken news organisations by surprise. Reuters news agency claims that its readers are spending three times as long inside their new iPad app than on its website. Both the Wall Street Journal and the New York Times also report high usage of their apps that allow people to navigate maps, play games and read books. Magazines are said to be pleased with the response too. American GQ, for example, is said to have sold 57,000 apps since it was launched in December 2009 and expects the iPad to boost that number substantially.
So why am I so sceptical about the iPad being the newspapers' saviour? For a start, the numbers don't stack up. As Benedict Evans of Enders Analysis has pointed out, though 10 million people pay for a daily newspaper, at a rough estimate of £30 a month, "there will not be 10 million people spending £30 a month on the iPad any time soon."
Then there's the mistaken notion of what "the iPad experience" really means. There is no doubt that people will enjoy using the tablet, but not necessarily for reading news.
In essence, the iPad changes nothing. Publishers are fooling themselves if they think it circumvents the current problem of persuading people to pay for something they have grown used to getting without paying. Why should anyone except a fanatical Times reader cough up £9.99 a month for access through its app when they can browse the net for nothing on the same iPad?
