News media businesses can no longer rely solely on making money from traditional advertising and must embrace the multiple commercial opportunities from online, according to magazine publisher and broadcaster Andrew Neil.
The Press Holdings chairman, BBC presenter and former Sunday Times editor said the changes sweeping the media industry were “transformative and revolutionary” and that traditional ways of making money had all but eroded as increased competition and the explosion of online media erodes the exclusivity of advertising deals.
Speaking at today’s SIIA Global Information Industry Summit in London, Neil said that the internet was not a threat to the traditional printed media companies, but an “essential” opportunity to diversify and ultimately save them.
“Sensible newspaper and magazine publishers do not see online as a threat or something they have to do because ‘it is the future, so let’s do it and grit our teeth’,” he said.
“Offline publications are still necessary for brand building and because people still like to hold a newspaper or particularly a magazine. But the revenues for that are in decline as search engines make classified ads increasingly irrelevant.”
Neil pointed out that his magazine websites – he is also chairman of ITP Publishing, the Gulf’s largest magazine publishers – were visited mainly by people who also read the print version and visit the site “for the additional material that is only online”.
He said The Spectator, owned by Press Holdings, had achieved great success with its Coffee House network of blogs, which has 200,000 unique users a month and will contribute “20 per cent of the bottom line” this year in terms of revenue.
He also pointed out that the one of the biggest spikes in traffic for Telegraph.co.uk was around 10am every day, when the print readers had finished their Daily Telegraph and wanted to know what else its journalists were doing.
“You now need to use online to do a whole host of things that you just could not before,” he added. “It ceases to be an either-or situation.”
Neil admitted the going was tough for the media in a multi-platform world with complex revenue streams but it was, for him at least, “a lot more fun”.
He contrasted the UK market with the US, in which newspapers are run by big city monopolies that are unused to competition and “run for the journalists and not for the readers”.
In the UK many mainstream publishers grasped the need to diversify early on: “Most trends like this begin in the US but in this trend the British media are particularly much ahead of them,” he said. “British newspapers have always been used to competition: it’s themost competitive newspaper market in the world bar none.”