Examination of Witnesses (Questions 520
- 539)
WEDNESDAY 10 OCTOBER 2007
Mr Peter Wright and Mr John Wellington
Q520 Lord Maxton:
Except for sport?
Mr Wright: Yes, sport is where we score on news
on a Saturday.
Q521 Baroness Bonham-Carter of Yarnbury:
In a more general sense what do you think is the purpose of newspaper
journalism?
Mr Wright: First of all to inform and to tell
people what is going on in the world, but we increasingly see
our newspaper as a much wider thing than that. I think it is a
cultural package and so some of it is entertainment, you carry
book serialisations, interviews, you deal with fashion. We now
have a magazine that is aimed primarily at men and it deals with
gadgets and adventure sports. We try to provide readers with a
window on anything and everything that they will find interesting.
Q522 Baroness Bonham-Carter of Yarnbury:
But what about the fact that in the actual body, in the actual
newspaper, there is an increasing overlap of news and comment?
How do you respond to the Chartered Institute of Journalists'
assertion that it is now virtually impossible to distinguish between
news and comment?
Mr Wright: Well, they must have been reading
The Independent which prides itself on being a "viewspaper",
whatever that means. We try to make it clear which is news and
which is comment. We carry some comment on our news pages because
we think it is convenient for readers, but we label it, "analysis"
is the term we use, and I hope readers are able to distinguish
between the two.
Q523 Baroness McIntosh of Hudnall:
Mr Wright, going back to the point you made earlier about the
generation of advertising revenue, you said that when you had
the issue that carried the Prince CD that the advertising revenue
went up. What is your reliance within your business model on advertising
as against other income streams, and how do you see that changing
in relation for instance to the amount that is carried in the
newspaper itself and the amount that is carried on the website?
Mr Wright: Our income comes pretty much 50/50
from advertising and circulation revenue. I do not have the figures
with me but at the moment the amount of advertising we take in
the paper dwarfs website revenue by a very, very big degree.
Q524 Baroness McIntosh of Hudnall:
Can I just stop you for a moment there. I was quite surprised
when you said a few moments ago that the total pagination of the
paper was now at 160.
Mr Wright: That is the maximum.
Q525 Baroness McIntosh of Hudnall:
Of that total, what physical proportion of those pages will be
advertising?
Mr Wright: 50%.
Q526 Baroness McIntosh of Hudnall:
So it is 50% of the physical content.
Mr Wright: It is a 50% maximum. It is not always
50% because the advertising does not always fall where you want
it to, but I limit it at 50% because I think that is as much as
is sensible in the paper.
Q527 Baroness McIntosh of Hudnall:
Sorry to interrupt you.
Mr Wright: No, that is fine. We were talking
about advertising in the newspaper and on the Internet. At the
moment, I would imagine—and I can find these figures and
supply them to you—97-98% of our advertising revenue comes
in print form.
Q528 Baroness McIntosh of Hudnall:
But do you see a trend that tells you in five or 10 years' time
that will not be the case?
Mr Wright: The advertising revenue on the Internet
is growing very quickly from a base of nil. Whether advertising
actually migrates directly from print to Internet I think is very
open to question.
Baroness McIntosh of Hudnall: I could
hear my colleague on my left muttering that Sunday newspapers
are different; is that the case as far as advertising is concerned?
Q529 Baroness Thornton:
I was just wondering, are Sunday papers different?
Mr Wright: Yes, daily newspapers rely very heavily
on retailers for advertising. We carry more of what you might
regard as brand advertising, car manufacturers for instance. The
markets are different and different categories behave in different
ways. If I can give you an illustrative example. We traditionally
carry a lot of travel advertising. The classified area of this
over the years was predominantly discount flights. That has reduced
in volume over the last four or five years because of the rise
of airlines like easyJet and Ryanair who sell their tickets over
the Internet. However, they advertise heavily but they advertise
in the front of the paper as display advertisers, so the advertising
has not actually gone, it has gone in a circle and come back again,
but things change and we have to adapt.
Q530 Chairman:
When you lose advertising to the Internet, even if it goes to
the Mail website, you are not going to get the same rate
for advertising on the Mail website as you are in the paper?
Even if you manage to keep the advertising volume you are not
going to keep the revenue?
Mr Wright: This is why the revenue on the website
is small at the moment because if you are an advertiser and you
want to really make an impact, at the moment you have to advertise
on television, you have to advertise in print, and you will probably
experiment with the Internet as well, and we have research which
shows that advertisers who use television and print will get a
much better result than advertisers who spend their money purely
on television. I do not think the Internet has grown to the point
where we have done that research there, but I think the same thing
would apply. Internet audiences are still very small, they are
fickle, they do not spend a very long time looking at things,
and I think it is quite hard to reach people through the Internet.
We have used Internet advertising ourselves a bit. It is very
hard to quantify whether you get any result from it.
Q531 Baroness McIntosh of Hudnall:
Could I ask a question that has just occurred to me maybe for
Mr Wellington, as between what you spend on staff, how much you
spend on generating that advertising as compared to what you spend
on journalism?
Mr Wright: You are asking—
Q532 Baroness McIntosh of Hudnall:
Very crudely, I am saying how many people have you got generating
advertising and how many people have you got out there gathering
news or processing news?
Mr Wright: I can tell you how many people we
have got gathering news. I do not run the advertising department
and nor does Mr Wellington. We could probably find the answer
and supply it to you.[1]
Chairman: Perhaps you will do that. Lord
Maxton?
Q533 Lord Maxton:
Could I briefly ask you firstly about volume sales. When I go
to my gym on a Sunday the only newspaper I can read when I am
having a cup of coffee is a free copy of the Mail on Sunday,
which presumably the organisation buys from you in bulk. The
Mirror says that they do not do any of that. How much of your
sales are bulk sales of that nature?
Mr Wright: I think at the moment it is about
130,000. I do not have the figures with me but again I can supply
them to you. Last weekend we sold 2.5 million. We think some bulk
sales are useful to us. Most of our bulk sales go on airlines
where you have a good market for advertisers and people are very
likely to read the newspaper. If you see one in a gym I think
that is a fairly small contract.
Q534 Lord Maxton:
They are quite a big chain of gyms. Can I now move to the Internet
which you are combining with the Daily Mail, so it is not
your own?
Mr Wright: Yes.
Lord Maxton: How innovative is that?
Is all you are doing reproducing the newspaper?
Baroness Thornton: Downloading it?
Q535 Lord Maxton:
Are you doing updates all the time, are you using video, both
in terms of stories and in terms of advertising, or is it just
a matter of a straight replication of the newspaper, with easy
access to the stories that people want to read of course? That
is why I use the Internet—to read a newspaper—because
I do not have to flick through 10 pages, there is a list of stories
and I just click on the one or two I want to read.
Mr Wright: It is a bit of both. We do update
during the day. We are very active in trying to find video. We
had a rather wonderful video of a South American footballer at
the weekend who scores goals by balancing the ball on his head,
which is very popular with readers, so it is a bit of both. It
is not the same as the newspaper, it is complementary. The other
thing you can do with the Internet, which is sometimes very useful
indeed, is if you have a big tabulated set of information which
you simply cannot fit on a newspaper page but readers may be interested
in, you can do a news story in the newspaper and then you can
refer to the website where you can see the full list of school
A level results, or whatever it is, so one complements the other.
Q536 Lord Maxton:
Would you consider doing arrangements with, say, Sky Sports or
BBC Sport to show next Sunday's highlights of England beating
France in the World Cup semi final?
Mr Wright: We would; whether they would I do
not know.
Q537 Baroness Thornton:
When we were in America, and certainly other people have spoken
to us about this, they are much more concerned about the Internet
and its use, particularly because of the demographic implications,
which is that this is how a lot of young people get their news.
They do not read your newspaper, they do not read any newspapers,
and you seem, I would not say complacent, but are you not concerned
that this is something that you should be thinking about?
Mr Wright: Yes, that is why we have a big and
very active Internet site. That is absolutely the case and we
want to maintain it. Should it be the case that 20 years from
now nobody wants their news in a print format and they all want
it in digital format, we are doing everything we possibly can
to ensure that we are the people who supply it to the groups of
people who enjoy our newspaper at the moment.
Q538 Baroness Thornton:
Are you getting new people on it? Do you know who uses your Internet
site? Is it your readers, is it new people, is there a transfer
between the two? Do you know that at all?
Mr Wright: Not as scientifically as we would
like to. All Internet sites have a lot of foreign traffic which
is really not of much use to us as a business, and that is true
of all newspaper Internet sites. Just returning to your point
about young audiences, it has always been the case that the newspaper
habit tends to form when people set up a home. People who are
students or young people who live a more peripatetic existence
have never read newspapers as heavily as people who live together
as a couple and have a home. And that is a process which is happening
later in life. I do not think, and particularly for a Sunday newspaper—and
we offer two magazines, a newspaper, two supplements—you
are going to get all of that material together in a convenient
form at the moment digitally. In the future you may do and we
will have to make sure we are there.
Q539 Baroness Howie of Idlicote:
Just thinking into the future, you are a Sunday newspaper, and
you have said you set up your magazine as appealing to women.
Presumably there is a Sunday element to all this—more time
to do all these things on a Sunday, but thinking into the future
10 years on and your projection of whether things will have changed
and how, both for the Sunday papers and for the newspaper industry
generally, let me just give you one or two thoughts. You were
talking about advertising revenue on the Internet being pretty
low. There may be a huge change in all of that over that period
of years. If one looks at the younger generation, they again may
be much more clued into the Internet if you provided what they
want. If you look at the working week, maybe it will have spread
over seven days with flexible working and much more done at home
and there is no particular extra time on a Sunday. Do any of these
things come into your thinking when the newspaper is looking 10
years ahead?
Mr Wright: They absolutely do. You are completely
right, when I entered journalism in the late 1970s London on a
Sunday was dead; there were virtually no shops open; there was
nothing to do; and people would buy two or three Sunday newspapers.
Now the traffic is appalling, people go shopping, pubs and restaurants
are open, and they have much less time to read newspapers, and
I am afraid they buy fewer Sunday newspapers. We have to make
sure that we offer things which make us still worth buying. It
is a very, very, very competitive market and it is not just other
newspapers you are competing with, you are competing with all
the other things that are there for people to do. People lead
very, very busy lives and we offer them an awful lot to read (450-500
pages) this time of the year.
1 The Mail on Sunday subsequently confirmed that "at
the end of October 2007 The Mail on Sunday employed 197 editorial
staff (including magazine staff) and the advertising department
employed 74". Back
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