Advertising and the decline of journalism

The Telegraph’s HSBC scandal is an acute case of a malady suffered by all capitalist media, argues William Kane

As if the scandals surrounding Jack Straw and Malcolm Rifkind were not enough, the ongoing furore concerning tax avoidance by the Swiss arm of banking giant HSBC continues to cause collateral damage.

David Cameron, it is fair to say, was at the very least tarnished by his government’s apparent failure to follow up an enormous dossier of evidence of sharp practices, comparing unfavourably with other, more aggressive efforts from Paris to Canberra. His decision to take on god-bothering banker Stephen Green as a trade minister looks, at best, naive - although Cameron has never been notable for digging too deeply into his employees’ shady pasts (most notoriously, convicted phone-hacker Andy Coulson).

Teflon Dave, alas, has only suffered a glancing blow here. Far more serious effects are being felt at the opposite end of British conservatism from Cameron’s Tory Blairism: at The Daily Telegraph, the premier organ of the establishment’s right wing. The Torygraph attracted unwanted attention for entirely ignoring a news story that had spread out from the BBC’s Panorama to The Guardian, and then the Times - enough, normally, to propel an item onto the general news agenda.

When something like this is passed over in silence by other elements of the press, it is generally a good idea to wonder why - as with the tabloids’ (and others’) studied refusal to cover the phone-hacking scandal until they could not avoid doing so without being reduced to a laughing stock. Could the Telegraph’s coyness about reporting the shady goings-on at HSBC’s Swiss arm have anything to do with the bank’s £1 million-a-year advertising account with the paper?

According to Private Eye (February 20), it surely could: the story, according to Britain’s finest muck-rakers, is that chief executive Murdoch MacLennan leaned on the editorial staff to keep schtum - a course of action maintained even as the HSBC files became subject of dramatic cut and thrust in the Commons (parliamentary correspondents and sketch-writers had simply to ignore the best material February 16 had in store for them).

MacLennan finally allowed a short piece to appear at the bottom of page 2, the traditional graveyard slot of a print newspaper, which was not republished on the website. By this point, the Eye was prodding Torygraph staff for comment, and two further pieces appeared, this time, on the website - before the story, again, disappeared entirely from the next day’s print edition.

It was not Private Eye which made this a scandal, however; that award must go to Peter Oborne, until recently the Telegraph’s political editor, whose patience finally snapped. Oborne is a Tory of the old-school - a principled rightwinger, and indeed a talented one; and he penned a lengthy article explaining his decision to leave.1 His statement was scathing; and it propelled the editorial ethics of his former employer onto the pages of its rivals. The Telegraph was now national news.

Its response has not, it is fair to say, played well with the public gallery. Initially, it claimed that the non-appearance of the HSBC files in its pages was purely down to a reluctance to get involved in an anti-business campaign led by ‘lefties’ at the BBC, Guardian and, er, The Times.

It then ran a story claiming that The Guardian had made editorial changes to a story about Iraq in order to appease Apple, which had a significant campaign running on its website at the time. Most controversially, a front-page story appeared alleging that Rupert Murdoch’s News UK operation had suffered a spate of suicides among its commercial staff, whose business it is to sell advertising space, in a move widely criticised as desperate and tasteless.

Getting money

The Telegraph’s travails have allowed its fellow newspapers a rare opportunity to take the moral high ground against a competitor. The Fleet Street injunction that ‘dog must not eat dog’ (ie, that journalists must not examine others of their tribe too thoroughly) is rarely enough ignored that, when one does so, one ought to have a reasonable degree of confidence in one’s superiority.

Yet the prime interest for us is that today’s Telegraph - for all it is in a sorry state - simply presents most clearly the central dilemma facing the traditional media, which is at root an economic one. A bourgeois newspaper is a capitalist enterprise - which is to say, it ought to make money. We say ‘ought to’, rather than must - papers can be run at a loss, but not so much of a loss that those bankrolling them are bankrupted. (In this, they may be compared to premiership football teams.)

There are two major sources of income available. One, obviously, is the cover price. Sell 100,000 copies of The Guardian at £1.80 each; make £180,000 in revenue. This has not been a reliable guarantee of profit for centuries, though, so the second means of supporting publication arises: advertising.

Taking the money of other capitalist enterprises presents a clear risk of conflicts of interest, which have caused some embarrassment, again, for a very long time (the early days of the financial press saw frequent scandals, where publicly traded companies would buy favourable press to inflate their stock price). Die käufliche Presse (literally, ‘the press-for-sale’, or more commonly, ‘the venal press’): such was the term common in the early 20th century socialist movement for the capitalist media of the day.

As time has passed, advertising revenue has decisively supplanted circulation as the primary means of income for newspapers. A crucial moment in the British context came with the price wars of the early 80s; with Rupert Murdoch’s fledgling British paper business in the lead, cover prices were slashed, which had the effect both of expanding circulation (and thereby ad revenues) and making the press more reliant on those revenues.

In the 1980s, a proprietor or editor of a newspaper could be forgiven for taking this situation for granted - ad revenue would always be there to generate profits, or at least reduce losses on prestige outlets (Murdoch’s Times, for example) to a manageable level.

Though its effect on the traditional media is often overstated, the rise of the web as a mass consumer platform has seriously undermined this model. The problem is first of all that, of all the uses to which the web has been put in its 30-year lifespan, it is very well placed to do the job of newspapers: the infrastructure of the web is designed to pass around text. The overheads incurred by purely digital publishing operations are miniscule compared to those who have to run printing presses and other huge fixed capital investments, for a more efficient end product (delivering journalism to people who want to read it, no longer restricted by the reach of distribution networks for hard copies).

More importantly, however, it has seriously shaken up the structure of the advertising industry. Print ads still attract big fees (for now - major media organisations are already preparing for the point at which print publications simply cannot be profitable at all); but newspapers are no longer merely print operations. Online ad-space, unlike print, is typically very, very cheap. Media sites face far more serious competition than ever for advertisers’ money, in the form of social networks and the like. They must attract advertisers’ interest with a little … something extra. More than ever, the press is required to be käuflich.

If you wanted a textbook example of how to screw up this transition, you need look no further than the Telegraph. It is owned by the eccentric Barclay brothers, who, on top of their various ‘traditional’ business interests, own their own Channel Island, and are attempting to colonise another to give it over to a bizarre ambition to start their own vineyards.

Their strategic approach to the Telegraph’s output has been guided by their insistence that the paper should turn a healthy profit. First of all, then, they have tried to shift it away from its traditional patrician Toryism in the direction of the wild populism of the Daily Mail. Secondly, they have become very cagey about alienating big-name advertisers. An earlier investigation into HSBC concerning Channel Island operations led to a year-long withdrawal of subsidy, something both the Eye and Oborne claim was considered absolutely unrepeatable, and held over business hacks covering the banks.

In the last year or two, the populist turn has been exacerbated by the appointment of digital media wonk Jason Seiken to a senior management role, and the later abolition of the traditional role of editor. There has thus been the peculiar sight of the Telegraph trying to reposition itself, online at least, as a lightweight clickbait merchant on the model of Buzzfeed, producing ‘listicles’ (you know the type of thing: ‘17 things you never knew about Jimmy Tarbuck’) and making ad money from ‘native advertising’ (digital agency speak for ‘advertorial’). Oborne alights on the most egregious example of this ‘decline in standards’:

On September 22 Telegraph Online ran a story about a woman with three breasts. One despairing executive told me that it was known this was false even before the story was published. I have no doubt it was published in order to generate online traffic, at which it may have succeeded. I am not saying that online traffic is unimportant, but over the long term, however, such episodes inflict incalculable damage on the reputation of the paper.

Over the long term, indeed: the Telegraph was the laughing stock of Fleet Street minutes after that little treat went live.

If you no longer have much need of journalistic standards, of course, nor do you have any need for journalists with standards. The Telegraph’s editorial staff has been thoroughly winnowed; many have jumped, many more have been pushed. Between a comprehensively bungled digital ‘transition’, the complete supremacy of beancounters and ‘commercial’ types in the newsroom, and the underlying decline of the traditional media’s business model, you might just get a journalistic abdication of duty as shameless as the Telegraph’s HSBC non-coverage.

Everyone’s doing it

By the same token, however, all media outlets are suffering: they merely hide it better. The Daily Telegraph singled out The Guardian’s little mishap with Apple, for example; the latter paper has not responded, which hardly gives one confidence that the story was simply made up. Anyone who has seen the pompously draconian conditions that accompany Apple advertising deals will testify to its plausibility.

Many of the same problems facing the Telegraph newsroom are equally present at The Guardian - staff shrinkage, budget cuts, increasing reliance on lightweight recycled copy (how many headlines are there nowadays that combine a major recent event with the phrase, “Twitter reacts”?). This is the phenomenon Nick Davies calls “churnalism”: an ever-decreasing number of journalists required to fill more space as quickly as possible.

The first casualty of this process is the truth, or even the very rough approximation of the same we could ever get from die käufliche Presse. The second is any clear separation of vulgar commercial and editorial concerns.

These are tensions, again, which have existed in capitalist journalism since its inception. They have been driven to such a height partly by technological progress, but also by another important shift: the decline of its opposite: the media of the organised working class.

There is, unfortunately, no technological explanation for the latter: indeed, the new market conditions barely affect the left press, besides reducing costs, as commercial advertising has always been out for obvious reasons, and our papers and websites have always been produced primarily on the basis of donations and the volunteer labour of freely associated individuals. It is purely an effect of our disastrous showing in the battles of recent decades (and the dreadful quality of what remains of such media, truth be told - from painfully dull union advertising sheets to the ‘agitational’ papers of Trotskyist groups).

“If you want a picture of the future,” Orwell wrote in 1984, “imagine a boot stamping on a human face - forever.” For a vision of the future of the press, absent a political and organisational revival of workers’ media, consider a Photoshopped picture of a woman with three breasts, reported as fact.


1. www.opendemocracy.net/ourkingdom/peter-oborne/why-i-have-resigned-from-telegraph.