How Will Publishers Survive? (Robert Thomson, CEO at NewsCorp & Zanny Minton-Beddoes) | DLD16

I could see from Zan's reaction that she was shocked that I was a copy boy, because as you know everyone from The Economist is either Oxford or Cambridge and Eton.

I see. Where were you a copy boy? In Sydney?

In Melbourne, yeah. But enough of me. What about you, Zanny?

Oh my lord. Well, I'll start with the magazine and you can tell me about the daily newspaper. I suspect that on both sides there are going to be players who have a troubled future and on both sides there are going to be players who have a very rosy future. And you heard what I said in the first panel. I am really, really optimistic about The Economist's future. And I just want to give you a couple of numbers because we, as I said, the phrase I use is mind-stretching journalism for the globally curious, but we actually did some research, some kind of psychographic research to look at how big the number of, or how many people there were in the world who were kind of potential Economist readers. And we had a series of criteria, you know, outward-looking, forward-thinking, liberal in the English sense, social values, interested in technology. There's a group of five such characteristics and measured on that basis there are about 320 million such people in the world. Now, if you adjust for English skills and so forth, it gets down to about 70 million. We have a circulation of 1.55 million. So, you know, there's a lot of growth potential there. Now, that makes it clear to me that there are a lot of people in the world who would love to read our content if they knew about it and if they became subscribers. And the number of people who can afford to become subscribers is growing very dramatically. And so I think you put those together, the potential is clearly there. We have to produce the kind of journalism that they want to consume. If we do it, I think the future is very rosy.

No, no, I'm waiting for you to ask me a question, or should I ask myself?

I was waiting for you to ask the question, but not quite in that way.

Well, two bits. First of all, newspapers. It looks an exciting time for newspapers. Challenging, yeah, but extraordinary opportunities. But I think the most important thing is something that you were touching on before, that you have to be flexible about your approach but you can't be flexible about your principles. You literally can't. And so some of the arguments around, well, you're a tech troglodyte because you haven't created your website to be a house of ill-repute. And you look at two things in particular...

People just need to know whether... and your point about trust and integrity is very, very important because you can't define good journalism by how quickly you can rip off an Economist story or a Wall Street Journal story and then how cleverly you can exploit search engine optimization and then be found. That is not the best journalism. So we do have a new generation of that which provides a challenge to traditional publishers. And more generally for us, to be honest, you have to use resources in a clever way. We're now, depending on how you count it, we're the world's largest digital property company.

I have a bad back, actually, that keeps me up.

To be honest, it's a combination of both. I think when you look at it, it's right to condemn a lot of publishers for the malaise that descended upon them. For the end of... when I was a correspondent in Beijing in 1985, the Baltimore Sun, the Houston Chronicle, the Atlanta Journal-Constitution, the Christian Science Monitor all had full-time Beijing correspondents. They certainly don't now, and the Christian Science Monitor doesn't exist. Why is that? Clearly circumstance played a role, but incompetent management and hubristic journalists certainly also played a contributory role. So, is it a dangerous time? Yeah, absolutely. But at the same time, it is genuinely a moment of opportunity. We have a brilliant digital team, tech team in New York who are experimenting with all sorts of things and at the same time maintaining the principle of journalistic provenance, because if you lose that you genuinely do become a bordello.

Well, it has been recast. And for us, obviously, we have everything from The Times through to The Sun to many great papers in Australia, the Wall Street Journal, the New York Post. At the heart of all of them now is a digital sensibility. But even that digital sensibility has evolved exponentially because of the rise of mobile. Mobile is a smaller platform, a smaller canvas. How do you use the journalism? How long should a story be? And that's why the institutional introspection is so important because you have to keep reviewing. If you freeze a frame of that evolution, you're frozen in time.

Well, one, smart people around me, as I'm sure you know, and you have a great team around you. Two, you have to have a... people talk about culture and empowerment of employees and, you know, a lot of it is jargon. You know, it's just not true in the way that you see workplaces. People do open plan... well, I mean, we have open plan, but you do have to have at a time like this a dynamic culture where virtually a meritocracy... now, no meritocracy is perfect, but if you don't have an egalitarian ethos around developing concepts, developing plans, projects, ideas, strategies, then you won't get the best out of the range of employees that you have, many of whom have different experiences of content.

Yes. But around a specialist reporter remains a specialist reporter. But the specialist reporter has to be conscious of how the audience has changed. The audience has moved on. What you don't want is a journalist delivering soliloquies. And so it's around that, but also on the business side, experimenting with different platforms and building out platforms. Because we bought a company in the States called Realtor.com. It was the number three property listing. People said, you know, why did you do that? Because we knew that we had very powerful media platforms that would accelerate its growth. It's now the fastest growing in the States. We're the largest property company in Australia, partly because, frankly, Lachlan Murdoch realized the power of the Australian newspapers a few years ago to build up platforms. So one, you have to be very clever, and that requires a clever team, not me, in creating and developing these platforms. And two, you have to understand the complementarity of those platforms.

Well, the rationale is a combination of commercial purpose and social purpose, and that's clear in all the papers, each of which has a distinct identity and a profound role. But one, I think one of the issues... look, I at different times have criticized the role of Google. And it's interesting, at least for this audience, that we've been in discussions with Google about subscription content. You know, how in a search world do you surface great Economist journalism or Wall Street Journal journalism or Sun scoops in a way that reflects the provenance? And Sundar, the new CEO, is obviously open to new ways of thinking about this, which we appreciate, because you have to understand the power of those platforms as well. And they have to respect the provenance of journalism because they are powerful. And just in a different context, you know, I was thinking about thinkers. And so I did a Google search, and we can have a slide now.

Okay, I'm powerless and pointless then, I'm afraid. And so the slide is up, right? So sorry, it's on the right-hand side there. And I was literally, I just typed in Hayek, successes, obviously for a well-educated European audience, Friedrich Hayek. And because I was wondering who in Europe now and in the US is carrying on that tradition. When I typed it in, you got, as you can see, a disproportionate number of references to Google Books. I didn't search for a book. And it shows you that to a certain extent the internet is the intranet. And in fact, this is not the one I did because I, despite being a philistine, I do read the occasional book. So I thought in my software there might be all sorts of cookies. So I got someone else to do the search completely separately, and that someone who I... who's brilliant, but I think the word bookish probably wouldn't be appropriate to describe this individual. So that is what you get, and that is not the worldwide web. It's not the world. It's not wide. Bit of a web, web of intrigue perhaps. But to be fair to Google, I also then did the same on Bing. So the next slide. And we got Selma. So you could... no offense, I'm not sure who her successors are, but still. And so you might refer to Bing as bling. So, but anyway, that's the world, to be honest, that's the world of information. That is what you just saw. There were two random journeys in the worldwide web that if we thought about the internet 20 years ago, is that what we imagined we would find? If we thought about it 10 years ago, is that what we imagined we would find?

No, actually, I'm optimistic because genuinely the new chief executive is engaging with discussions with us that are productive. They're useful. They're positive. He's listening in a way that I think is quite distinct from given our experience. And look, we don't expect Google to fashion itself around our interests. But if we are to be a well-informed society, you have to respect the provenance of intellectual property, you have to respect privacy, you have to respect the quality... there is a hierarchy of journalism. What you read in The Economist is different to what you read on BuzzFeed. The provenance, the quality, the orientations are different. And that is not reflected in Google and others that tend to think quantitatively. Are we a quantitative society or are we a qualitative society?

Well, Google has done a brilliant job. But there isn't much competition now, as you can see from the slide. It is a dominant platform.

Yes. Otherwise it will have ongoing trouble in Brussels and elsewhere.

Well, I think that prospect has to be studied. Absolutely. When you have 93 or 92% of search in Europe, then that's a lot of search. But I think we hopefully are now at a new era in Google. We do have Sundar, who is a very different type of personality. They're listening. And so the word I think of with Google at the moment is optimism about how willing they are to listen, which hasn't necessarily been a characteristic in the past. But look, it's important not just for newspapers, but for the books industry. Actually, Google could be a genuine potential competitor against Amazon, which in itself... I mean, it is no secret that the price of electronic books has gone up in recent times, but it's been written about in public. I don't want to say anything that would get you all arrested by the SEC because we have earnings coming up. But at the same time, one of the fascinating things, and we're talking about the demise of publishing and people tend to think of publishing as print. One of the fascinating things is that the sales of print books have increased because people are now making a qualitative choice about the value of things, and we have to give people a choice.

I think the fire just went out. I think the fire went out. We didn't even ask for any questions because I've had plenty of people ask me questions, but I think we should probably get off the stage and let somebody else get on. So, thank you all very much.