If the job of News Limited and Fairfax Media is to keep investors at bay with rising revenues and profits during a cycle of massive industry upheaval, one of their newest and biggest competitive threats is espousing the opposite.
The Guardian News & Media’s official launch two weeks ago of its Australian presence has come with a message from its international director, Tony Danker: The Guardian will not move to a paywall model anytime soon and investing in its ‘open journalism’ model requires a strategic focus on putting the reader first, not profits or shareholders. They will eventually come – but much later, Danker said.
“We’re not doing it for shareholders,” Danker told AdNews from London. “We’re doing it for readers. And above all, we want to do brilliant open journalism. We’re not really in the business of publishing targets or holding ourselves accountable to shareholders. It’s not the way we do business. I’m pretty confident that if we do great journalism and we focus on engagement, not only will we grow audience but we will grow revenue.”
The Guardian’s ownership model is an aberration in the global media sector – it is owned by Guardian Media Group which in turn is owned by Scott Trust Limited, set up to secure the financial and editorial independence of The Guardian in perpetuity.
Danker said a move by The Guardian here or internationally to introduce paywalls was not on the group’s radar – he said the economics don’t stack up against the associated decline in advertising revenues. And paywalls, he said, would stymie the masthead’s development of open journalism, which The Guardian is moving at pace with to embrace readers’ comments and input into real-time storytelling (check out the The Guardian’s acclaimed ‘Three Little Pigs’ ad from last year for a fast update).
“Look, let’s be clear – nobody’s worked out how to solve this yet. Some think paywalls are the answer. Some don’t. Neither side has been proven right. I think our ownership model is really important at a time like this. It’s clear we’re transitioning from newspaper economics to digital economics and that transition is extensive for everyone.
“It’s really helpful for us at this point in our life cycle in that transition to have an ownership model that is not driven by shareholders or proprietors seeking profits, but allows us to invest through the cycle and behave counter-cyclically to deal with this period. Don’t get me wrong – there are a lot of things we have to do as well. But I think we can do it with our own control and make really important bets through the cycle and behave counter-cyclically. We’re lucky to have a business model that allows us to do that.”
For the full interview with Danker and why branded content still has a place in the masthead, check out the current issue of AdNews.
This article first appeared in the 14 June 2013 edition of AdNews, in print and on iPad. Click here to subscribe for more news, features and opinion.
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