Ian Burrell: High sales. Big profits. Rising user numbers. So why the turmoil at the Telegraph?

The Media Column

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By many metrics, Telegraph Media Group is a model media company. It turns a profit of about £60m a year – remarkable for a newspaper business – and owns not just the best-selling title in the British quality market, The Daily Telegraph, but a digital news operation that is growing audience and revenue.

Why then is it seen by so many in the news industry as a scene of confusion? The answer is there in valedictory words from the many talented staff leaving the famous paper, either voluntarily or in the latest round of job cuts this month.

The company’s management can argue that these people are products of a bygone epoch, refuseniks of digital change in an organisation undergoing exhilarating transformation. The truth is that the latest job losses – reportedly 55 of them – come only 18 months after a clear-out that was itself supposed to be a root-and-branch restructure for the new era.

Surely everybody in the news business now understands that the future is digital, especially at the Telegraph which has announced a “digital revolution” almost perennially since 2006 and employed at least six digital gurus to lead it.

The sight of the latest one, Jason Seiken, being taken off editorial duties and moved upstairs to a new strategic role will not convince staff that the company has a clear sense of direction. The American’s reassignment came a year after he began work as editor-in-chief and chief content officer.

In January he addressed the newsroom with his radical vision for a new way of working, inviting them to participate in a “Telegraph’s Got Talent” competition and develop skills as video presenters. Now Chris Evans, a hard-bitten newspaper man, has been put in charge of the editorial rudder.

Seiken’s supporters could argue that increased traffic to the Telegraph’s website, which has grown to about four million daily unique users with increased use of video and a stronger presence on Facebook, is an indication that he is replicating the success he had repositioning American public broadcaster PBS as a digitally smart organisation.

But that doesn’t explain the exceptional turmoil at the Telegraph – most papers are enjoying online growth (and still limited digital revenues).

Among staff leaving are Ben Clissitt, newlyappointed digital director (visual journalism) at Bloomberg, and David Munk, who was head of world news and is moving to The Guardian’s Australia operation. Not the sort of people to live in the past. Deputy editor and chief political commentator Benedict Brogan left in the summer and foreign editor David Wastell departed last week. Mandrake diarist Tim Walker is said to be next out of the door. In all, the Telegraph has cut nearly 500 posts in eight major culls since 2005.

To the outside world it seems like madness but the Telegraph operates to strict financial targets. Senior management is under pressure to better last year’s £61.2m profit as the calendar year closes. Despite the efforts of its commercial department – run by Dave King and widely admired – that’s a tough ask in a challenging market.

In fact, the Telegraph has been shocked by the summer fall-off in print advertising revenues, on which it heavily depends. Innovative deals are being cut. Blanket coverage of new Hollywood film Fury in the online Arts section, much of it tied to commercial sponsors, followed a wraparound ad for the movie in the paper. The company has built a 40-strong advertorial department, Create.

Meanwhile, daily print circulation, though still a hefty 505,000, is down by 45,000 on last year.

These major concerns explain why Seiken was moved upstairs – to devise a radical plan for sustaining the company long-term by finding fresh revenue streams beyond advertising. Faced with such a task, he couldn’t manage editorial responsibility as well.

He might draw comfort from the fact that digital football venture Project Babb is gaining traction. And that staff, anxious to show willing, are signing up for training in search engine optimisation, data analytics and other skills. Journalists will work in two new shift patterns, one starting at 6am and the other ending at midnight. “Pure digital” specialists are being brought in from beyond the newspaper sector.

But there is a danger that the Telegraph loses touch with its traditional readers. The decision to option Hilary Mantel’s The Assassination of Margaret Thatcher was extraordinary, given the Torygraph’s customer base. Blame was unfairly put on Seiken’s American sidekick Dan Hickey, The Telegraph’s general manager, lifestyle. But having tried to balance a job in London with a home life in Utah, Hickey has also quit.

Some time ago, Patrick Barwise, a management consultant at the London Business School, advised the Telegraph to build deeper relationships with that traditional readership. Using its strengths in areas such as military history, gardening, the Royal Family etc, it could develop events and master classes, as The Guardian does with its specialisms. An American strategic consultant, Dwight Porter, later suggested the company needed to invest £8m in digital initiatives.

Seiken hasn’t that sort of spare cash. But the Telegraph must hit its profit targets. And so the job cuts keep coming. That life at a paper as popular and profitable as the Telegraph should be so chaotic is depressing.

But the long-term problems Seiken  is seeking to address are ones most others in the commercial news business must also answer. I understand that he aims to have a plan ready before the  end of winter.