Former News UK CEO Mike Darcey predicts paywalls will be the future of serious journalism

The former chief executive of News UK told a Massey University audience at last year’s Journalism Education Association of New Zealand conference that paywalls are the future for serious journalism and paywalled journalism can play a serious and important role.

The keynote speaker for the event held at Massey University in Wellington was Mike Darcey, a Wellingtonian, who, until September 2015, was the chief execuitve of News UK.

Darcey prresided over a return to financial fortunes for Times Newspaper (TNL), the News UK arm, which publishes The Times, Sunday Times, and The Sun, and which announced a 1.7 million pound profit for the year ending 30 June 2014.

Darcey’s three-year tenure at News UK came to an end with the return of Rebekah Brooks, a year after she was cleared of all charges relating to the phone hacking scandal, which led to the Leveson Inquiry of the press back in 2011. 

Darcey told the audience he has seen plenty of upheaval as the media industry has sought to adapt in various different ways but ultimately sounded an optimistic note for  the media industry.

“Branded, bundled, curated journalism has a future.”

As news consumption has moved online, traditional forms of media have had to adapt business models as circulations shrunk and expectations grew that content should be free.

However, Darcey is a firm believer in the paywall which, he said, does not prohibit journalism’s ability to serve as a check on the powerful.

“I think that paid-for editions can continue to play the role journalism has played in the past [now]from behind the paywall.”

Darcey pointed to the Sunday Times reporting on the FIFA scandal, which saw a number of officials arrested on corruption charges and the (sort of) resignation of embattled president Sepp Blatter.

Prior to joining News UK, Darcey had been deployed elsewhere within the Rupert Murdoch empire as chief operating officer for cable TV provider BSkyB and learnt how the subscription model could work even when facing a free competitor.

“You can sell a paid product against a strong free competitor even when that strong free competitor is the BBC [but]to do that you have to have very distinctive content.”

The newspaper market in the United Kingdom differs rather substantially to that in New Zealand in that it’s divided along political lines (the Guardian on the left and the Telegraph on the right) and also distinguishes between tabloids and broadsheets.  

“You choose the bias that you would like to have reinforced.”

At a time when most news outlets are covering the same news, pushing a certain bias could, in fact, be a means by which to offer something unique to readers that they might be willing to pay for. As things stand in the local market, this would be difficult given that none of the major publications are clearly partisan in their approach. To quote Hive News editor Bernard Hickey: “You’ve got Radio New Zealand, RadioLive, Newstalk ZB, NZ Herald, Stuff, 3News, One News. It’s seven flavours of the same story within seconds.”

One clear problem with taking news down the partisan line is that it could potentially obscure the truth in favour of political posturing, but Darcey says the UK system has its merits as it allows for a genuine competition of ideas between these polar opposing representations of the world.

“It does work because of the plurality that exists within the system.”

Many argue a genuine competition of ideas within a pluralistic democracy and good quality journalism, which helps readers make sense of the news is an essential public good but making it pay when there’s freely available material has proved a challenge for the newspaper industry.

However, as Darcey pointed out, the challenge of free competitors is not really a new one for the newspaper industry.

“Free news is not a new idea. The newspaper industry’s been competing with free news outlets in the form of radio and television for more than 80 years and thrived during a lot of that time.”

Darcey says the real challenge lies in how people fill their time these days.

“We’ve got so many other ways to fill those little moments of boredom during the day.”

Darcey told the audience one of the problems publishers face is they lack clarity of purpose.

“There is a bit of confusion or at least a difference of opinion about what is the objective function that we are trying to pursue.”

One of the greatest tensions for modern newspaper is the erosion of the wall between sales and editorial.

In the UK, Darcey said, The Telegraph is widely viewed as the Newspaper flirting most dangerously with this once sacred dividing line.

The Telegraph certainly stands out in the UK market as the most willing to do anything that an advertiser wants. The most willing to blur the lines between what is editorial and what is advertising.”

In 2015, The Telegraph’s tension came to a head when political columnist Peter Oborne resigned saying stories were quashed because of the paper’s reluctance to upset major advertisers. Oborne has since moved to the Daily Mail.

Oborne’s story is fairly dramatic but, Darcey told me, the tension was real during his tenure at The Times.

“I had to referee many fights between my advertising people who would show me what the Telegraph had done this week and [say]‘surely we should be doing this as well’ and the editorial people who would say ‘over our dead body will we be doing that’.”

Instead of focussing too heavily on the fickle revenue of advertising, The Times, Darcey said had emphasised high quality content which was bundled with other benefits.

“We put paid content at the centre of that strategy. You need to invest in good journalism. We emphasise maintaining the bundle and strengthening the bundle.”

The Times has done this at different times by offering additional benefits such as spotify subscriptions and membership to the National Trust.

The limits of the advertising model has been pointed out by the deputy editor of The Economist, Tom Standage who told Nieman Lab, back in April 2015, with the rise of ad blockers, that “advertising is nice, and we’ll certainly take money where we can get it, but we’re pretty much expecting it to go away.”

There is a perception that modern consumers of media flit here and there, dipping in and out but Darcey’s argument in favour of an overall bundle of content is supported by the average reading time of The Times on tablets which, at 43 minutes, is similar to the time people spend reading a print edition.

It pays to hook readers into a subscription model because it is easier to keep subscribers than hunt for those who have committed themselves elsewhere, Darcey said.

“One key lesson from the world of pay television is that consumer inertia is an incredibly powerful force and it is better to harness it and have it working on your side rather than having it being something you have to overcome.”

The Times chose to be format neutral, focus on high quality content and then allow the customer to choose how they wish to consume that content.

“Our job was to take the editorial proposition and create the very best products we could in all formats and allow the customers to choose.”

Darcey’s overarching message to conference goers was that high quality journalism is important for people to make sense of the news and in order for it to have a viable future, it must be financially sustainable—and to him, this will involve paywalls in the future. 

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