Stephen Glover: David Montgomery's surrender doesn't mean that the press has lost the war

The other day a very senior and successful Fleet Street figure told me that in 15 years there will only be two national newspapers: The Sun and the Daily Mail. All the rest will disappear under a burden of debt, after years of making losses.

Two newspapers! It is the bleakest assessment I have heard. David Montgomery, the chief executive of the pan-European group Mecom, was also in pessimistic mood last week. He described the traditional newspaper business model as "bankrupt, unviable, finished." He also took issue with Rupert Murdoch's assessment of a "malfunctioning" newspaper industry. According to Mr Montgomery, it is much, much worse.

In this argument between doom mongers and optimists Mr Murdoch lies firmly in the second camp. He thinks newspapers have a future, though he has not yet worked out what that future should be. A few months ago he grandly asserted that "newspapers will reach new heights in the 21st century . ... The form of delivery may change, but the potential audience for our content will multiply many times over. Our real business isn't printing on dead trees. It's giving our readers great journalism and great judgment."

Is he right? Some people – Mr Montgomery, I imagine – think that the 78-year-old media tycoon is losing the plot. He recently spoke of charging people to read the websites of his British newspapers, which many think is a no-no when free suppliers such as the BBC predominate. He is perhaps naively enthusiastic about e-books, which he thinks could help struggling newspaper publishers. It is certainly possible – indeed, I have suggested it in the past – that Mr Murdoch is no longer absolutely on top of his game.

And yet when all is said and done he is the most successful newspaperman of modern times, and in a disagreement between him and Mr Montgomery I know whom I instinctively back. Mr Montgomery assembled a newspaper empire in the good times which is now disintegrating in the bad. He really only has one weapon, which is cost-cutting, which he applies again and again. He is about to embark on another round. I should think he knows more about cost-cutting in newspapers than any man alive.

The trouble is he might as well be dealing in pears or machine tools. I wonder whether he has introduced a single significant editorial improvement to any of the newspapers he has bought. (They are published in languages he can scarcely read). If you regard newspapers as mere commodities to be squeezed for cost savings once, twice and then again, it is hardly surprising if you end up like Mr Montgomery, presiding over a crumbling publishing empire whose eventual demise no one will mourn.

Mr Montgomery lacks vision. If you don't have vision, it is very easy to write a media blog, or hold forth in a pub, calmly prophesying the end of newspapers. Mr Murdoch may be a bit fuzzy about the future – who isn't? – but at least he believes there is one. If he can't see beyond the next impasse, or has too little time left to navigate it, there are others out there who can and will. Mr Murdoch's basic insight is right: in a complicated, changing world people will still want good journalism. He just hasn't figured out a way to make it sufficiently profitable in the internet age. Someone else probably will.

Without vision and conviction and hope newspapers will be doomed. That is not to say, though, that cost-cutting is not important. It just depends what kind of cost-cutting you mean. An Australian publisher called Eric Beecher argues in a piece which you can access via his online newspaper Crikey that "a [new] business model is emerging – the idea of reinventing so-called 'broadsheet' newspapers as high quality niche products targeted at narrower audiences who are attractive to advertisers and fundamentally committed to the idea of reading a newspaper." A few years ago Eric and I had a fancy to launch a new low-cost national newspaper, and it is good to see that he has not abandoned the concept.

The point is that many struggling newspapers employ round after round of salami slicing in which cuts are applied across the board. There is no time, or inclination, to sit down and think: what do our core readers value most of all, and what might they be prepared to do without? Everything is cut evenly, so that the paper ends up as a pale, weaker version of its former sense. There is an alternative – to ring-fence, even to improve, what the paper does best, while conceding that it cannot necessarily do everything.

The recovery in display advertising revenue, when it comes, will have only limited impact on loss-making titles. (Incidentally, we should not forget that judgments made during the depths of an advertising recession are bound to be excessively gloomy.) The Times is losing about £50 million a year. The Guardian, which is probably losing not a lot less, unbelievably employs over 800 editorial staff, a few of whom it shares with The Observer. If these papers want to be to be published in 20 years' time, they will have to make substantial, enduring cuts. These can be done the Montgomery way, which is basically destructive and leads to weaker journalism, or the Beecher way, which is creative, and might even give us better newspapers.


A surprising lack of hysteria over Cameron's wisteria

The Daily Telegraph's amazing revelations roll on, and one is occasionally tempted, in Archbishop of Canterbury mode, to wonder whether it is not time to call a halt. But it is surely better for it all to come out.

And yet the paper has undoubtedly been softer on some than others, leading to speculation that secret deals may have been done. Its star columnist Boris Johnson is still spared. Last January The Independent on Sunday questioned Boris' claim for £2,000 in respect of a hotel bill for himself and colleagues, and it is not inconceivable that he has other charges to answer.

No deal was done in the case of the Tory MP Julie Kirkbride, a former political correspondent on the Daily Telegraph. The paper finished off its ex-employee last Thursday with its splash about her £50,000 taxpayer-funded extension to house her brother. Ms Kirkbride served the Conrad Black regime, and could not count on any protection from the existing powers.

One MP who did get very sympathetic treatment was David Cameron – so much so that one wonders whether his spin doctor Andy Coulson was not involved. On 11 May the Telegraph ran a story whose first paragraph Mr Coulson might have approved: "For most of the past five years, Mr Cameron has claimed only for mortgage interest and utility bills on his Oxfordshire constituency cottage." Only in paragraph three was his £680 claim to remove wisteria mentioned in a deadpan way.

And, of course, he owns a country house in Oxfordshire, not a "cottage". If he had been happy with a cottage he would not have had to raise a £350,000 mortgage in 2002, and charge the taxpayer about £1,700 a month. Obligingly, the Telegraph did not question whether it was right for a wealthy man to claim such expenses, or ask why he needs such a grand house.

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