David Prosser: GMG gambles everything on contrary view

Wednesday 10 February 2010 01:00

Outlook Guardian Media Group's decision to sell its regional media business is yet another indication of its determination to bet the house on all things digital. It has sold a profitable group of local newspapers (albeit with profitability in decline) in order to subsidise its loss-making national newspaper division, which is obsessed with the idea of a multimedia future and, specifically, the view that charging for online content is the wrong way to proceed.

In this view, GMG is ploughing a lonely furrow. Much of the rest of the world's media – both large groups and small – are lined up in the opposite corner, working feverishly on different models for earning a buck from the hugely expensive content they produce for the internet. Rupert Murdoch, for one, describes GMG's view that content must remain free as "BS".

Being in the minority does not, of course, make you wrong. But while GMG has made a strong case for the social value of online journalism, it has yet to produce any evidence that its approach is commercially viable. On the contrary: it has invested ever more in its online vision – including huge sums on lavishly equipped multimedia facilities at a new London headquarters – doubling and tripling the size of the bet on digital.

Sooner or later, the gamble has to start paying off if this dream is not to become a nightmare. Sentimentalists will rue the sale of GMG's local papers – particularly the Manchester Evening News – because such a longstanding link with the past has now been severed.

A more hard-headed criticism is that the media group can only go on selling off the family silver in order to finance unprofitable new adventures for so long.

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