Will The Economist's success feed through to Reuters?
Saturday 24 August 2013
In appointing the head of The Economist as “chief executive, Reuters, running news and media business from London”, Thomson Reuters has picked talent from one of the world’s most successful news businesses.
Instead of turning to another wizard from America, the company is looking towards a UK-based organisation which has built a powerful readership worldwide including the United States. The Economist boasts playfully that it is the Voice of God: read its content once a week, and you know all you need about the world.
So what are the keys to success that Thomson Reuters must surely be eyeing in choosing Andrew Rashbass? Some of his colleagues recently briefed journalists attending the Reuters Institute in Oxford:
By refocusing on the name 'Reuters', Thomson Reuters is signalling that it wants to make serious money from news. This has been the Holy Grail for Reuters throughout the ages
- The Economist has a circulation of 1.5 million, making 70 per cent of its revenue from subscriptions and 30 per cent from advertising. It is profitable on subscriptions alone. In five years, the ratio is expected to move to 80:20 or more. So much for the myth that nobody pays for news in the digital era.
- Digital publishing grows rapidly, but The Economist finds that print is far from dead. In fact, it tends to be more profitable.
- The Economist employs only a handful of staff journalists. But it draws on a powerful array of expert writers who produce dauntingly thorough series on subjects such as the United States, China, India, international finance, technology and science.
- It surprises readers by writing about topics they had no idea mattered.
- The Economist does not try to be impartial. It believes readers accept an openly expressed point of view. It is liberal, socially and economically, and sees this predictability as a strength.
- Its journalists don’t write just for the weekly edition. They keep the news flowing in between in the form of blogs. They use feedback from the blogs to adapt followups.
- They see apps delivering news to tablets and smartphones as a more promising business model than web sites with paywalls, because consumers feel they are getting the whole news, not bits and pieces.
Some of The Economist’s lessons will not apply, and Reuters’ brand already carries authority. But Reuters does not quite have The Economist’s intellectual firepower. It has introduced comment, but it is varied and unfocused. Reuters avoids having “a line”, and in The Economist’s experience that is not a plus.
Look at Reuters’ web pages, and you see a disparate array of stories - some financial, some global, others lightweight and local. While Reuters has more experience of running 24-hour news, it has struggled to make it profitable. Its web sites have no paywalls.
By refocusing on the name “Reuters”, Thomson Reuters is signalling that it wants to make serious money from news. This has been the Holy Grail for Reuters throughout the ages.
Rashbass, who has been guiding a highly profitable global news brand, has been brought in to deliver.
Marcus Ferrar is a former correspondent and media marketing manager of Reuters. He is chairman of The Baron Editorial Advisory Board. ■