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November 10, 2022updated 17 Nov 2022 2:15pm

MacKenzie, Murdoch and the hunt for tabloid gold in the digital era

By William Turvill

Tabloid newspapers were not too long ago viewed as reliable cash cows for media moguls like Rupert Murdoch.

News Group Newspapers, Murdoch’s UK tabloid arm incorporating The Sun and News of the World, reported revenues of £654m in the year to July 2011, and an operating profit of £82m.

Last year, News Group Newspapers – now without the News of the World, which closed in 2011, and still bearing the costs of the hacking scandal fallout – recorded revenues of £319m and an adjusted operating loss of £44m.

These trends are not unique to the Murdoch business and appear to afflict most of the titles that once made up Britain’s tabloid class.

With print in rapid decline, British tabloids have built up vast, internationally-significant websites and now reach more readers per month than ever before. But digital revenue gains have been unable to compensate for print declines.

Unlike many of their ‘broadsheet’ rivals, tabloids have for the most part failed to find a way of charging for digital content (The Sun’s punt on a paywall was short lived).

And, arguably with the exception of Mail Online, they have struggled to generate enough digital ad revenues in a market dominated by technology giants Google and Meta.

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Some might conclude that the tabloid news business model does not translate into the digital era. For others, though, there is a big opportunity that has so far been largely untapped.

Kelvin MacKenzie’s throws shade at The Sun

Kelvin MacKenzie, The Sun’s former longstanding editor, is one such optimist. Press Gazette has learned that he plans to launch a news website in the New Year called the Daily Disclosure.

A rolling news site, MacKenzie said it would be aimed at a “centre-right, 40-plus” audience and will be “reasonably populist”.

Explaining the rationale behind the launch, MacKenzie said: “I’ve seen the way that journalism – editors, owners – have all got to dance to the tune of the left.

“If you wanted an example of it, just look at The Sun today, which doesn’t carry any story that looks as though it will be controversial as far as the left are concerned – on issues like race and trans and any form of free speech issue.”

He is concerned that news websites do not cover enough stories on these subjects because media buyers don’t want to advertise next to controversial content.

MacKenzie said he plans to launch the Daily Disclosure initially as a free website and then later introduce a subscription model. He plans to hire and train up four or five young journalists who must be prepared to “work very hard for not much money”.

MacKenzie served as editor of The Sun between 1981 and 1994. During this period, The Sun was a newspaper powerhouse, regularly topping a circulation of more than four million. However, for many his editorship is remembered for The Sun’s controversial coverage of the Hillsborough disaster. Victoria Newton, The Sun’s current editor, recently described its “THE TRUTH” front page as “the biggest mistake in tabloid history”.

MacKenzie, who previously ran Talksport and owns A Spokesperson Said, will initially be funding his project alone. But he added that he will be “rattling the can” after launch.

Asked if he’ll be modeling the Daily Disclosure on any other websites, MacKenzie said: “Well, I’m trying to take a lack of inspiration from The Sun website, frankly.”

What will Martin Clarke do next?

MacKenzie might not be the only-well known (and somewhat fearsome) media executive planning to launch something new into the digital tabloid market.

Martin Clarke, the former editor-in-chief and chief executive of Mail Online, is rumoured to be plotting a return to online journalism when his gardening leave comes to an end.

One friend and former colleague speculated that Clarke would aim for the lucrative United States market, where he established Mail Online as a major force. Clarke has apparently spent much of his gardening leave in the US, including Florida, where he recently learned to fly, according to his friend.

Clarke relaunched the Mail website in 2008 and turned it into the largest English-language tabloid site in the world. He announced his departure in early December 2021 and said he would “remain available” to the company until late this year.

Any new product from Clarke would be taken seriously by the global journalism industry. Under his guidance, Mail Online regularly ranked – and still ranks today – as one of the top ten English-language news websites in the US and the world.

The website’s revenues last year hit £164m, and Mail Online remains the standard bearer of digital tabloid news.

In Clarke’s absence, Lord Rothermere’s company has also been building up a new digital proposition called Mail+, which today stands as a rare tabloid digital subscription product. It reports having tens of thousands of paying subscribers.

British tabloids find an audience in America

Mail Online truly took off as a business after its 2010 expansion into the United States. The website today generates roughly as much traffic from America as it does from the UK, according to Similarweb, and American advertising rates tend to be higher.

The Mail’s success across the pond has encouraged other UK tabloids to follow suit. The Sun launched a US operation in earnest three years ago. Bosses recently told Press Gazette The Sun US now has 100 journalists and is profitable. News Corp’s native US title, the New York Post, is also said to be profitable and growing fast.

Press Gazette reported in September that publishing giant Reach was considering hiring 100 staff to launch the Mirror and Express in the US.

Meanwhile, Semafor recently reported that Jimmy Finkelstein, the founder of political news site The Hill, is planning to launch a digital product that will take inspiration from the British tabloids. The New Statement will reportedly take the form of a Mail Online-Washington Post hybrid.

“The Sun’s done an amazing job relatively recently building its US audience,” said Douglas McCabe, the chief executive of Enders Analysis.

“In a digital world, it nuts for [UK news websites] not to try for a global audience. And in fact they’ve been relatively slow at doing that.

“Mail Online’s built up a big US audience, The Sun is now building up a big US audience. But it’s sort of surprising that the English-language British news media are not going for broke on global – that’s the way to really make your brand fly.”

Can tabloids regain their advantage over the broadsheets?

Amid the struggles of tabloids over the past decade, Britain’s traditional ‘broadsheet’ newspapers have been quietly finding some success online.

Back in 2011, Times Newspapers Limited, the Murdoch-owned publisher of The Times and Sunday Times, reported revenues of £402m and an operating loss of £10m (an improvement on a £42m loss in 2010).

In 2021, the business reported revenues of £327m, down 18% in a decade. But (as illustrated by the graph below), Murdoch’s Times’ revenues have steadied in recent years and in 2021 overtook those of The Sun’s News Group Newspapers. Times Newspapers also reported an adjusted operating profit of £45m, which covered News Group Newspapers’ £44m loss.

As with The Sun in the tabloid market, The Times and Sunday Times are not unique among broadsheets. The Financial Times has established itself as a global leader in digital subscriptions, and the Telegraph is growing fast. Guardian Media Group this year reported its highest annual revenues (£256m) since 2007/08. The online-only Independent, meanwhile, reported record profits of £5.5m last year thanks to revenue growth of 36% to £41.2m.

So, are tabloid news brands destined to be left behind their broadsheet peers in the digital future? Or can tabloids – traditional newspaper brand names, as well as startups from MacKenzie, Clarke, Finkelstein and others – regain their foothold in the market?

Enders Analysis CEO Douglas McCabe, for one, is optimistic for tabloids – in large part because he feels none, with the exception of Mail Online, have found an effective formula.

“What publishers have done is taken a print model and effectively transitioned that into an online environment without really knowing if that works,” he said. “And if you were starting from scratch, you probably wouldn’t have a newsroom with 500 journalists in it creating enough content to fill a newspaper every day.

“What you’d probably do is say: Okay, what is an online service going to look like? What do you need to create for an online audience to consider the experience valuable? Is it a 15-minute experience that can be created by 50 journalists or 100 journalists? And what kind of content does it need to be, and what is the range of content? How do you know that the bundle that was created for physical print is the right bundle for online? I don’t think any of these questions are honestly being asked often enough inside publishing companies.”

He added: “I’m actually quite optimistic. I feel like we’re in the foothills. We don’t really know what’s going to work. But I also feel that nothing’s really been tested in anger yet. So by saying, ‘We don’t know what’s going to work,’ that’s not necessarily a way of saying: ‘It’s all going to be terrible and I can’t see how anything would work.’

“We really just don’t know yet what’s going to work because there’s not enough experimentation in the market.”

Top picture credits: Kelvin MacKenzie (Reuters/Pool), Rupert Murdoch (Reuters:/Stefan Wermuth), Martin Clarke (DMG Media), Jimmy Finkelstein (Charles Eshelman/FilmMagic via Getty Images)

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