Murdoch MacLennan: 'Change is the key to survival'
In a rare interview, the Telegraph Media Group's chief executive, Murdoch MacLennan, explains why he's harnessing the digital revolution - and letting his editors get on with it
Monday 05 February 2007
Can the newspaper industry survive and what will it look like in 10 years' time?
We are in the eye of a storm of change - arguably greater than at any time since the birth of the printing press.
But first things first. Let me underline that, however tough it is, we're in a very strong position in the UK to weather it, and turn it to our advantage. In our country, 25 million people still pick up a newspaper each day. Many others look at newspaper websites. That makes us an incredibly powerful medium - with a strong and healthy advertising base - and puts us in an excellent position to face future challenges.
So there is no doubt in my mind that provided we adapt, we can - and will - survive the changes that are now arising from the digital revolution, and harness them to our advantage. Indeed, in many ways, the future of the newspaper industry is a bright one because our market places are now global. That gives us unlimited editorial and commercial potential, a range of new platforms from which to operate and a wonderful opportunity to attract a whole new generation of readers.
It's to meet that challenge that the Telegraph Media Group has been re-engineering its news and commercial operations at our new offices in Victoria since last autumn. We believe the way to flourish - and I suspect our competitors will be scrambling to catch up - is to give our readers the news when and how they want it.
Global coverage and reach is not all good news, though. The downside is that global media companies - not just domestic rivals - are the new competition. And we have to adapt to that. But change can be good for us. It forces us to rejuvenate ourselves, to find new revenue streams and to win fresh audiences.
Where will we be in 10 years' time? It'd be foolish for anyone to try to predict. We'll still be here - and we'll still be providing news, comment and entertainment. The one thing I'd wager is that the media companies which will be in the strongest position will be ones with brands like the Telegraph, to which people will look for authoritative reporting at a time when the number of news outlets will have grown exponentially. I suppose I would say that, wouldn't I, but that doesn't make it any the less true!
You mentioned competition just now. Outside newspapers, who do you see as your principal competitors?
Competition used to be easy to identify. It was your domestic rivals. But today all those equations are changing. At home, I think we are facing new rivalry from the BBC, whose website - funded by the licence payer - is a direct competitor to us. That's even more of a problem for regional newspapers. And then we have the competition from Google, from international broadcasters with their websites, from anyone with access to the web who can become a news provider.
I guess that, for the foreseeable future, we'll continue to be measured - in things like circulation figures - against other UK newspapers. But that's fundamentally to miss what's going on. The competition is changing, it's digital, it's global - and it's getting fiercer by the day.
Technology apart, what are the other main challenges facing newspapers in the UK?
The main battle that UK newspapers have always had is to protect their editorial and advertising freedom. Last year alone, we saw new proposals to jail journalists for breaches of data protection rules, the unprecedented use of anti-terrorist legislation to arrest a journalist for the improper obtaining of information, proposals to ban payments to criminals for stories, restrictive privacy rulings, and pressure for restrictions on food advertising in the broadcast media which could impact on print. I could go on - but I think that makes the point. We need constantly to be on guard - and to fight not just to preserve our freedoms, but try to roll back some of the more onerous restrictions placed on us.
You have been chief executive of the Telegraph Media Group for over two years, what do you regard as your mission?
With 900,000 copies a day The Daily Telegraph is the biggest selling quality newspaper in Britain. Unlike our main rivals - The Times and The Guardian - we make a profit. When the Barclay family bought the Telegraph Group - after a difficult few years for the papers under the ownership of Conrad Black - the first job of the new management team was to steady the ship and develop a strategy to secure the Group's future.
At the same time we had to take a longer-term strategic view. While it may be too early to know the full effect of the online revolution, it was clear that our readers were on the move. We concluded that change was not an option. It was imperative. Our owners have invested hugely in that and given us the opportunity to become the leading digital media company in the UK. I guess my mission is to drive forward that process of change, secure our position as number one - while at the same time ensuring we protect our newspapers' reputation for integrity and honesty.
Why did you decide to move when you did?
Readers are migrating on-line, and advertisers are following them. Traditional display and classified revenues are declining at a rate of approximately 4 per cent year-on-year. Meanwhile, online advertising is growing by as much, in the Telegraph's case, as 9 per cent annually. And younger people are looking to the web for their news. Any responsible management could not ignore these trends.
In short, we had to act. We are now beginning successfully to serve our readers across a variety of multi-media platforms, as well as through our core print products. We are supplying news and information by audio, video, online and traditional methods around the clock.
The Telegraph Media Group is once again blazing the trail; did you feel at any point that things were happening too fast?
I realise that we did push hard to implement the digital changes and to get the new building in central London up and running. It would have been inefficient to run two parallel systems, one for print and one for online, as opposed to introducing one integrated solution.
Of course, change is seldom easy. Changes involving new working patterns and some redundancies cause tension and stress, both to staff and to management. I regret any distress that anyone has had to face, but I think most people recognise we had to change in order to protect and grow our business.
The idea that we have been involved in some cost-cutting exercise, just for the sake of it, is ridiculous. As anyone who has seen our breathtaking new editorial layout in Victoria will tell you, we've in fact been heavily investing in the future.
In retrospect, do you think the redundancies could have been averted if the changes had been introduced more gradually?
We moved quickly for commercial reasons and I admit that some very tough decisions had to be made. It was with regret that we had to lose 54 journalists, but I would not be fulfilling my role as chief executive if I shied away from taking hard decisions for the long-term benefit of the company.
Are you confident that the new editorial system in Victoria is the way forward?
I would like to correct one commonly held misconception. The new system was not constructed by the management, it was designed by editorial people for editorial purposes.It has been operating since last October and is working extremely successfully. It may well need to adapt, but it is a very flexible system.
What is your working relationship with the Barclays like?
I have an excellent working relationship with our chairman Aidan Barclay and his brother Howard Barclay, and with Sir David and Sir Fredrick. They are avid newspaper readers and love both The Dailyand The Sunday Telegraph. They have been hugely supportive of our strategic plans, share our vision and have made a considerable investment in the future - in the introduction of a radically different editorial system, and in new printing arrangements to give us extra colour and greater quality.
And the relationship between management and the editors?
The editors edit and the managers manage. The editors are responsible for all editorial content, and I would not have it any other way.
This is an abbreviated version of an interview that appears in this week's edition of 'Newspaper Techniques', the magazine of the international publishing body Ifra
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