It’s Time To Break Free From The Cult Of Free

The future of one of Britain’s most successful newspapers is on the line, and all I can think of is William Goldman’s immortal line about the secret of success. In Hollywood, he admits, there isn’t one because even though he was one of the 20th century’s most lauded screenwriters, ‘Nobody knows anything.

For around 15 years, however, the highly-educated brains that run the Guardian have been convinced that they do know something – a philosophy not shared by its toilers, who are about to become the unfortunate victims of a foolhardy escapade.

Recently it was announced that the Guardian is going to have to cut 20 per cent of its costs – that’s around £54m – because of the tougher business environment. If it doesn’t do so, it could obliterate its £758m trust fund in less than a decade.

There have been so many excuses outlined by the media company’s bosses to explain the £52m operating loss for the year ending March. A decline in the value of assets, a steep drop in advertising profits; the fact that costs are up 23 per cent in five years; investment in an extraordinarily lavish new headquarters in Kings Cross together with the deluded purchase of a nearby 30,000 square foot venue where readers would pay £600 a year to access special events and debates; and of course the costs of supporting 1,960 members of staff. That’s not a typing error. The newspaper and website employs 1,960 people.

Yet no one dares to mention what some consider to be one of the major reasons this much-venerated institution is sustaining such eye-watering losses. No matter how costly the journalistic investigation, no matter how highly-rewarded the member of staff, no matter how many writers are paid to work on a certain day to get the product out, everything produced is freely available. OK, you can buy the newspaper copy if you want, but only 185,000 or so are sold – five years ago it was more than 300,000. Most of the Guardian’s millions of readers worldwide don’t pay a penny. Ever.

Because the company is wedded to a digital-first policy in which, like the US heroin market of the 1970s, stuff has been given away for free so that people would become hooked to the product. The Guardian’s content would, so the argument ran, become so ubiquitous that it would become the market leader and profits would flood in because clicks and eyeballs would allow them to charge higher rates for advertising.

Free was the future, the former editor Alan Rusbridger repeated over and over again every time there was a dip in sales or a profit warning. And yet, as Mr. Goldman so wisely observed, no one really knows anything.

There will be media analysts out there who will ridicule the following assertion but it seems to me utter nonsense that a sustainable business – one which prides itself on quality – can be predicated on giving away the product for free.

We have been duped by the so-called digital gurus who insist that a ‘democratised’ internet demands that information should come without cost. The web is for all and, as the Guardian’s trademarked branding proclaims ‘Comment Is Free’.

The mistake the Guardian has made is insisting upon everything being free. The Financial Times and Telegraph have created paywalls that are erected when a certain number of articles are read a month and The Times insists all its readers/users/viewers pay a fee. MailOnline is free (for now) and phenomenally successful, but it is a very different beast to the Daily Mail newspaper and so does not cannibalise the parent product quite so much as the Guardian’s website does.

I have no doubt that the new editor, Katherine Viner, and her team will find the requisite cuts whilst ensuring the continued high standards of journalism for which the paper is renowned. But they will need to swallow their pride and do two things.

First, expand their content marketing division, Guardian Labs, and sell their journalistic services to the highest bidder (and most ethical one, obviously). It’s astutely helmed by marketing whizz Anna Watkins and in 2013 alone the department’s 120 campaign-led brand initiatives made the company more than £10m.

And second, call an end to the most ludicrous media experiment of modern times. If you want to ensure a quality product and you value that product, you have to stay in profit. Which means you can’t give away what you make because a few bearded geeks in Silicon Valley tell you to.

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