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March 18, 2009

It’s the price of bread, stupid

By Peter Kirwan MM blog

‘The king must die so that the country may live.”
— Robespierre, 1792 

‘I don’t like using the words ‘print is dead’, but it’s not very well.”
— Nik Hewitt, former multimedia manager at Northcliffe Digital, 2009

We might as well be in Paris in 1792. Only the great debate animating society isn’t the future of Louis XVI. It’s the question of what will happen to King Print.

Jeff Jarvis and Clay Shirky, latter-day equivalents of Danton and Robespierre, have called for the monarch’s removal from power. Increasingly, both suspect that King Print must die, so that journalism may live.

Jarvis and Shirky want us to take a leap of faith. They hope to establish a technologically-enabled Republic Of Virtue in which ‘all despicable and cruel passions are unknown”.

As Jarvis suggests, we must focus on what we do well — and link to the rest. A bit of reverse syndication wouldn’t go amiss, either.

There’s much talk of alternative ways of organising things — ways that don’t rely on the top-down fiat of King Print. Among revolutionaries, open APIs are discussed with much fervour late into the night.

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Shirky himself urges that we must allow a thousand technological flowers to bloom — in the hope of finding a route to the ‘democratization’of journalism.

These ambitious thoughts worry those with mortgages to pay. But they’re made plausible by the accompanying whiff of Romantic thinking that led Shelley, a generation after Robespierre, to write Ozymandias.

Both Jarvis and Shirky believe that King Print — like Ozymandias with his ‘sneer of cold command’– will eventually become a ‘colossal wreck”, abandoned to his fate in the desert.

In the future, travellers equipped with mobile broadband will be perplexed by an inscription on the ruins that could have been uttered by Beaverbrook or Murdoch: ‘Look on my Works, ye Mighty, and despair!”

But enough about the revolutionaries. Let’s look at the other side of this yawning political chasm, where we encounter the constitutional monarchists –- figures who resemble Mirabeau and Lafayette.

The constitutional monarchists want a bloodless revolution. Deep down, they can’t envisage life without big corporate structures.

There’s simply too much invested in the current system, including huge recent expenditure on new print capacity and billions of pounds-worth of bank debt and shareholder equity. The edifice is too big to fail.

Temperamentally, the monarchists believe –- like all conservatives -– that the new world cannot be very different from the old.

At the moment, King Print is merely unwell, not dead. So the constitutional monarchists are consolidating their arguments. They are returning to the attack — on two fronts.

Yesterday, Sly Bailey of Trinity Mirror delivered a decent impersonation of the war hero Lafayette, inciting the crowds with a populist condemnation of those ancien regime enthusiasts at the Office of Fair Trading.

Bailey warned that the OFT risks damaging the interests of King Print. Unless it casts aside ‘the language of purist competition theory”, the monarch will face ‘immediate peril”.

And then there’s John Fry, the new chief executive of Johnston Press. Fry clearly has a plan for getting through the crisis and keeping King Print on his throne. He’s emerging as something of a Mirabeau.

At first glance, that plan looks very familiar: cut costs, negotiate with the banks and keep Johnston Press cashflow-positive until the upturn begins.

But unlike King Print’s previous favourite, Fry seems confident that he can achieve these things. There will be no collapse into administration, no Ozymandias moment on his watch.

As it turns out, Fry’s scenario is based on three notions. Last week, after running through the company’s 2008 results with analysts, he named these as follows:

  • The notion that recession will give way to recovery during 2010.
  • The notion that digital ad spend in the UK will ‘plateau’at somewhere around £4.5bn annually between 2011 and 2013.
  • The notion that resurgent revenue growth (presumably mostly in print) will outstrip a declining tendency for advertisers to defect to digital competitors.

Of course, the list of counter-arguments is lengthy. It includes this, this, this kind of thing and this, too.

In the end, the course of the French Revolution was defined by something very palpable: the price of bread. It was the rising cost of a loaf that prompted Parisians to storm the Bastille and to cheer when the guillotine polished off Louis XVI.

What’s our latter-day equivalent? As Fry suggests, it will be the relative growth rates of print and digital advertising during the next couple of years.

Some forecasts exist for both. But so much remains in flux that they’re essentially worthless.

For Wordsworth, witnessing the French Revolution made it “bliss in that dawn to be alive”. Now that everyone from King Print to Robespierre is running on faith, the question is whether you can persuade yourself to feel similarly.

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