Examination of Witnesses (Questions 480
- 499)
WEDNESDAY 10 OCTOBER 2007
Mr Richard Wallace
Q480 Baroness McIntosh of Hudnall:
In terms of projecting your business model forward what assumptions
are you making about that and about advertising revenue?
Mr Wallace: Ultimately, the bulk of it will
probably be on-line. As I said, we have got some very aggressive
plans for the new year to use the Daily Mirror. We are
not going to be just the Daily Mirror newspaper that happens
to be on your computer, because other papers like the Guardian
and Telegraph, who have spent a great deal of money getting
out into that area and effectively JCB-ing their papers on-line,
are suddenly sitting there saying, "The revenue streams are
not really appearing yet," and that is a heck of a commitment.
Q481 Lord Maxton:
I am fascinated by on-line and what you are saying. Does that
mean that for instance some of your advertising on-line, from
the same advertising as in your newspaper, will be a television-type
advert rather than a picture one? Are you going to have videos
of stories which are in the newspaper and are you going to update
so that if a news story breaks at midday it will be on your Daily
Mirror website at quarter past 12 rather than waiting for
tomorrow morning?
Mr Wallace: This is one of the key questions
that we are answering. My belief is that it is pointless us trying
to compete with the BBC or with CNN, et cetera, on the breaking
news front; we just do not have the resource. If you look at the
figures on that, certainly the BBC are way ahead of anybody else
in this field, so to my mind us with 300 employees trying to compete
with the Leviathan of the BBC is, frankly, not the way forward.
However, yes, we will provide a basic news update service a"
la Press Association, or what have you, but my belief, again coming
back to one of the functions of the paper, is that people want
more analysis on stuff, so there are certain opinion makers and
opinion formers within our newspaper that will certainly have
a much bigger role on-line and perhaps in a televisual way. Certainly
on the advertising issue we will cross-pollinate in the sense
that we will do necessary deals with Toyota or whoever that we
advertise with on-line and in the newspaper. We did a very successful
football transfer window quite recently where we had one of our
football writers on-line every morning from his breakfast table
saying, "In the Daily Mirror today this is going to
be happening. The Sun is saying this ..." Everybody
said to me, "Why are you advertising The Sun?"
I said "I am not, I am saying if you want a one-stop shop
to get all the football transfer news this morning, then Mirror.co.uk
is the place to be". I must stress we are feeling our way
forward. The interesting thing and one of the exciting things
about the digital age, as it were, is that it is a green field,
nobody has the answers here, nobody knows where it is going because
the consumer for once is completely king.
Q482 Lord Maxton:
The Guardian had an article this week in its media pages
on what it called the "newspapers' iPodcast moment",
in other words the iPod telephone which is also much more than
a telephone, you will be able to read the Daily Mirror
or The Mirror on the train on your mobile phone rather
than buying it.
Mr Wallace: Yes, and you would probably go cross-eyed
in the process at the moment. It is about consuming things pleasantly
and I am yet to be convinced that people will be frantically scrolling
down through their Blackberries to read the papers. I have several
news alert SMS things myself, so Sky, the BBC and CNN updates
will get sent to my phone and that is a great bit of kit. I can
often be at my own news desk and say, "What's all this about?"
Those kind of things are great but as far as people reading it
in that kind of form, I just do not see it.
Q483 Baroness Thornton:
How popular is your website and do you know whether the hits on
your website are readers or whether they are new people or what?
Mr Wallace: As I said, we have not gone aggressively
into this market-place yet because there has been a lot of waiting
and seeing rather than let us just pour all the money in and then
find that we have got it wrong. Even now we are getting around
two point one million unique users a month. An interesting fact
on it is that over 70% of our audience is under 45. I have got
a couple of figures here which are actually quite useful. Reading
a paper, under 45s, 41%; over 65s, 27%. Then you go to co.uk and
72% are under 45 and only 4% are over 65. It is a huge growth
market and again we need to understand it and the consumer needs
to understand. For instance, we have quite a degree of older readers
and they used to up until 18 months ago send me angry missives
by letter. Now they email me: "I am 89-year-old Mrs Biggins
from Rotherham and I think blah, blah, blah," and that is
a remarkable sea change in just 18 months.
Q484 Baroness Thornton:
Are you going to try and convert that demographic into readers
of the newspaper?
Mr Wallace: Again it is a personal view, but
I believe that trying to drive one to the other does not necessarily
work. One of the reasons I believe that newspapers have perhaps
not done so well on-line so far is that there is this mind-set
"let's just do what we do here over there," and people
do not use the Internet in the same way. You have got to think
about how people use the Internet. Most people are not sitting
at their desks like we are idly browsing and surfing away. They
are holding down proper jobs, they are living their lives, and
looking after the kids, et cetera. They go to the home computer
to buy a holiday or do their supermarket shop or whatever. They
go for specific things, they are not there idly passing the time
of day, so therefore are they going to turn on their computer
and idly flick through the Daily Mirror on-line? I do not
believe they are. However, I do believe that we can provide other
services perhaps with a more consumer element that can complement
what we do in the newspaper.
Q485 Baroness Thornton:
Which is why the brand trust is so important?
Mr Wallace: Absolutely.
Q486 Lord King of Bridgwater:
The thing we have not covered at all, part of this inquiry is
about ownership and of course you are part of the Trinity Mirror
Group and you said we are just a very small organisation, we have
only got 300 chaps. You have got the Sunday Mirror, you
have got the People, you have two Scottish national papers,
you have 100 regional and local titles as well; to what extent
does that have significance for you in terms of news and a synergy
of being able to draw on the resources that all those organisations
have? Do you know how many journalists there are in the Trinity
Mirror Group?
Mr Wallace: I think it is around 1,500 but I
do not know for sure.
Q487 Lord King of Bridgwater:
Which makes it quite a big organisation?
Mr Wallace: I think there are different demands
at local level that local newspapers need to deliver compared
to national newspapers.
Q488 Lord King of Bridgwater:
So you have no real input? You do not say, "Look at this
story breaking in Birmingham"—although you do not have
the Birmingham Mail, is that right, it has been sold?
Mr Wallace: We still have it.
Q489 Lord King of Bridgwater:
A story breaks in Birmingham, surely they are the boys on the
ground?
Mr Wallace: On that basis, yes, we have Liverpool,
which is one of our heartlands, and obviously we have the Echo
and Post up there. Yes, we have good relationships.
Q490 Lord King of Bridgwater:
And do you use their journalists?
Mr Wallace: Not their journalists but we use
their material. We are not swilling around with staff, as it were,
we are quite a lean, mean machine, so a lot of those particular
organisations are needing their guys to do their work.
Q491 Lord King of Bridgwater:
You see yourself as very much a completely separate organisation
and the fact that you happen to be owned by one group does not
affect you?
Mr Wallace: As I said, we use each other's resource
in the sense that if the Liverpool Echo has got a great
set of pictures of what have you then we can make that phone call
and get those pictures, whereas if I was from the Daily Mail
and made that phone call then I would probably have to pay a premium
price for those pictures, and they might not even want to make
them available to me. On that ad hoc basis, yes, but as far as
formal channels or what have you, no.
Q492 Baroness Howe of Idlicote:
I am a little bit puzzled, if I may say so, about the reasons
which I do not think you have fully gone into as to why your own
circulation has dropped as much as it appears to have dropped
and whether it worries you particularly or whether you are concentrating
now on the future. Coming to my second point and stargazing into
the future, say the next 10 years, you have given us some ideas
and you are playing around with a lot of ideas and how you are
going to meet the competition and meet the desires of your readers
and so on, but how far ahead are you looking: 10 years? What are
you predicting for your own paper and for newspapers generally?
Are there really going to be no newspapers around at all other
than on the Internet?
Mr Wallace: I do not think that. Addressing
your first couple of points, the reason that I believe we were
declining faster than our competitors was because of these bulk
sales I mentioned, either giving away papers free or cut price.
I believe The Sun is 15 pence in Scotland at the moment,
which is obviously considerably less than we are, and these DVD
give-aways, they do drive sales. The Daily Mail recently
did a serious on the World at War and I think it sold something
like an extra three million papers, and that is a heck of a lot
of papers for giving away a DVD. If I am a Daily Mirror
reader and I am going into the shop and I am suddenly seeing a
DVD being given away with it, I am kind of inclined to go there.
These kinds of things over time, you are being slugged round the
back of the head on a fairly regular basis then, yes, it is difficult.
I am absolutely optimistic of the survival not only of the Daily
Mirror but of newspapers. As I said, I believe we will get
to a plateau. I think there are all sorts of social factors that
come into play. Age is a key one. Somebody once said to me that
anybody who buys a Daily Telegraph before they are 38 and
a half is obviously a little bit odd. I am merely reporting what
was said to me!
Q493 Lord Maxton:
Not if you are a young Tory, it is not!
Mr Wallace: As far as the digital question,
yes, this has been coming down the pipeline for the last five
or 10 years, but it is here now and it is not going to go away
so we have to confront it head on.
Q494 Baroness Howe of Idlicote:
And the newspaper industry generally will be all looking in this
sort of way?
Mr Wallace: Absolutely. As an industry we have
a great habit of navel-gazing and shooting ourselves in the foot
a lot and bashing each other up, but I am very bullish about the
future. I think there is a great press tradition in this country
which we can maintain not only off-line, as they call it in newspapers,
but on-line. Yes, I would imagine what the Daily Mirror
does in 10 years' time might be very different to what it does
today, but I think the essence of it will remain.
Q495 Baroness Eccles of Moulton:
Mr Wallace, I was wanting to turn to the question of the journalists
who work on the newspaper and over the last 10 years, as the circulation
has declined, what effect this has had on your ability to continue
to employ top-quality journalists and therefore your news-gathering
being maintained at the same high standards?
Mr Wallace: We actually employ about 25 more
journalists now than we did 10 years ago because of obviously
our digital expansion, et cetera, but we have seen from other
newspapers that if you do not have the necessary journalistic
resource you go downhill very, very quickly and the consumer is
very, very quick to catch on to the fact "Do you know what,
this is just rubbish", so therefore there is an understanding
throughout our business that maintaining the levels of staffing
and quality of journalism is absolutely essential, because that
is one—to use a buzz word—aspect of our brand. There
is a certain integrity associated with a newspaper and that comes
out of its staff and the way we report the news and other things.
Q496 Baroness Eccles of Moulton:
And are you finding it any more difficult or easier to actually
maintain the standards? Are the journalists coming on-stream and
coming into the industry getting better?
Mr Wallace: It is getting more difficult because
again it is another competitive issue, it is a lot more attractive
to go into the bright lights of television and the digital world,
and therefore there is not the great pool that there previously
was. However, there still is a pool and I think it will remain.
Being a journalist, certainly a newspaper journalist, is a vocation
rather than anything else because you do not go into this business
to earn your fortune and people are born with the itch. Thankfully,
there still is a pool and we have a very successful graduate trainee
scheme which has brought through a lot of very successful young
journalists not only who continue to work for us but elsewhere,
and I remain optimistic about that.
Q497 Baroness Eccles of Moulton:
As far as foreign news gathering is concerned, which presumably
is the more expensive end—?
Mr Wallace: Indeed.
Q498 Baroness Eccles of Moulton:
Have you had to resort more to agency sources or are you able
to maintain your foreign news corps?
Mr Wallace: We cut back on our foreign bureaus
10 or 15 years ago purely because the technology enables one to.
In New York 25 years ago, we had nine people stationed there,
which is mind-boggling now, so the nature of the way technology
has been brought on has meant that we can scale down. Nevertheless,
we maintain American staff but our only staff link, as it were,
is in America. There are good agencies throughout the world now
and individuals who have formally been on Fleet Street have moved
to Moscow and just set up shop.
Q499 Baroness Scott of Needham Market:
My questions are on the same sort of lines really which is based
on evidence which we received from the Chartered Institute about
how the practice of journalism is changing as a response to budgetary
constraints, so journalists do not get out and about because there
are fewer of them, they rely more on the telephone and the Internet
and there is a sense that what you get is an iteration of what
is already there, not properly checking facts, not really thinking
afresh; how do you respond?
Mr Wallace: To be honest, this is where we will
be very careful about how much we get our journalists to actually
contribute to the on-line thing, because I know of some of the
problems in other organisations where journalists have said to
me, "They want me to do a blog in the morning, then they
want me to do a news story for on-line, then we want me to update
my blog, then do a podcast, and then do my story for the paper.
When am I actually going to do some reporting here?" There
are demands on the journalists' time but again it is finding that
balance. I am a great believer if I am seeing a load of people
sitting around the office then we are having a bad day. People
need to be out and they need to be meeting people because that
is how it happens. The slovenliness for instance of using Wikipedia—and
there was an incident quite recently involving Ronnie Hazlehurst
the composer, and okay, that was an amusing mistake in the end
but it is a great danger. We warn our journalists all the time,
just banging in Google and then turning up whatever it is does
not make it right. It is a concern but I think it is something
that everybody has become conscious of now, that you cannot do
it the lazy way just because you can access the worldwide web.
Chairman: Mr Wallace, thank you very
much. You have given some very important and interesting evidence.
Perhaps if we have got any other questions to follow up we could
drop you a note and ask you about that. Thank you very very much
indeed. We will all look in to ITV tonight.
| 
