Patronage not profit. The future of Irish news media

Posted: August 23rd, 2013 | Author: antoin | No Comments »

As a nation, we are mad for opening up media outlets. We have over 20  daily or weekly newspapers of national scope (see lists for Ireland and Northern Ireland) and countless local and specialist publications. The Internet is a facilitator for new publications and there are plenty there too. This continued expansion seems like the future.

Some optimists in the industry believe new revenue streams will open up as web users get used to paying for their content. (see this report about the Irish Times’ plans and this one in relation to the Independent.)

I think that on the whole, the opposite will happen to Irish media on both scores. There will be little revenue from this new source, and few new players of any scale. The few new players will be completely different from the old ones.

The newspapers’ paywall concept assumes that the media company offering it (a) have something people want and (b) that people can’t get it just as conveniently for free. The problem with this is not (a). Irish people love Irish news. (Think about it, otherwise, why else would anyone ever buy the Evening Herald?)  The real problem is (b). If anything, Irish people love Irish news too much, to the extent that quite a few of them want to write it as well as read it. This is not a new thing. It is the reason why we have so many newspapers on our beautiful but lightly populated island.

It is going to be extremely difficult to get regular news consumers to pay for something like ‘breaking news’ that they can get for free from somewhere else. Maybe the quality isn’t quite as good, or maybe the other sources are a bit biased, but who really cares? It’s just breaking news.

What the players could do is create a paywall for the whole industry, following the Slovakian model. They could structure it so that new players are always better inside it than outside it, thereby reducing the amount of ‘free’ Irish news content available. It is not perfect, but I think it could eventually work and everybody can make a few euros to supplement their advertising income. For it to work though, the uniqueness criterion still applies – there has to be content inside the firewall that you can’t substitute with free stuff -.

The problem is that one major player, RTE, receives a licence fee worth €188m a year and so doesn’t really need the income from a paywall. The government is getting ready to copper-fasten the licence revenue by making it compulsory for every single home, whether there is a TV or not. At the moment, RTE isn’t a big issue for online competitors because RTE doesn’t really ‘play’ in the web space in a big way. It is very much a side show for the station. But that will change as young people watch less telly and advertising revenues fall, and the station needs to move toward the web to justify its public service remit.

For sure, there will be innovation and some smart plays, but privately-owned participants will find it hard to make commercial progress when they have to face off against an organization as well resourced as RTE. Who is going to really invest significant money to compete with RTE?  The only thing that will make a media outlet worth owning is the sway it might hold over public and government opinion.This is a ‘patron model’ where capital is provided in return for influence.

We should not be surprised if  Ireland ends up with a media which is based on patronage rather than business. Restricting private sector media ownership won’t fix it. Capping Denis O’Brien’s interests will just balkanize the sector and make all the small resulting players so weak that none of them will ever compete with RTE on RTE’s terms.

All that said, RTE (together with other Irish broadcasters including O’Brien’s communicorp and TV3) faces serious problems of its own. RTE may have the money and the content, but it having a tough time transitioning into the online market. I will write about that again.

UPDATE: This article by Dylan Collins is always worth reading again.



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