Examination of Witnesses (Questions 1380
- 1399)
WEDNESDAY 9 JANUARY 2008
Mr William Lewis
Q1380 Baroness Thornton:
I must go and look at it, I apologise for not having done so.
Mr Lewis: That is very nice, that is another
one we can record to say you watched. We need lots of people in
there now and so we have shifted some resource internally but
we have also had to access resource from outside, get specialists
in that area. There has therefore been quite a rebalancing of
where we have our people and, broadly now, the right people are
in the right places.
Q1381 Baroness Thornton:
Have you increased your use of news agencies?
Mr Lewis: Not really. I am a big fan of agencies,
I am a huge respecter of the work that Reuters do in very dangerous
parts of the world, AP, Bloomberg is a world class partner for
us in business where there is such reliance it is like having
another arm of your operation, but there has been no material
uptake in our use of agencies. I suppose if I was to refine the
question, do I regularly ask the question are we better off deploying
our resource there or working on our own added value scoop material
over here, I am always going to ask the journalists to try and
come up with our own material rather than redo a report that has
already been done by someone at Bloomberg to a very high quality.
If there is, it is entirely my responsibility, but it is for the
best of motives.
Q1382 Bishop of Manchester:
There have been two occasions this morning when you have used
the word "partner", earlier on in relation to independent
television and you have just used it again in relation to Bloomberg.
I wonder if you could just clarify, you may be using the term
quite loosely.
Mr Lewis: Yes.
Q1383 Bishop of Manchester:
Could you just say exactly what you mean?
Mr Lewis: Absolutely. One of the big recognitions
of our resources is we know what we are good at but, much more
importantly, we know what we are not good at, what our skill set
is not. The idea that when we set up our television business—to
take the ITN example—we would know about how to film properly
to the same quality as ITN was an absurdity, so throughout our
operation we are trying to look at who is already doing this brilliantly,
who can we partner with? It is particularly important in the IT
area; we are doing a lot of IT stuff ourselves but there are some
really bright people out there already doing what we could do,
so we have looked to partner with some of the best people in every
area of our business and learn from them and see where that relationship
goes.
Q1384 Bishop of Manchester:
Is that a financial arrangement?
Mr Lewis: The ITN thing is a cultural thing
but also a financial arrangement where we would pay them for that
arrangement over a certain period of time.
Bishop of Manchester: Thank you very
much.
Q1385 Lord Inglewood:
I liked your phrase "Telegraph folk" as being your target,
your supporters club or whatever you call it, and one can actually
think that Arsenal support in Africa is part of it.
Mr Lewis: Absolutely, very much so.
Q1386 Lord Inglewood:
But obviously you have got a brand and you are working within
the framework of the brand.
Mr Lewis: Yes.
Q1387 Lord Inglewood:
But at the same time within the brand—I know from personal
experience of newspapers—if you get the right story you
increase sales and that will increase audience. Have you had to
re-orientate that focus in order to maintain and increase sales
and audience?
Mr Lewis: I suppose that firstly I would say
one of the great joys when a big news event happens, if you look
at the statistics—and I do not know if you have had these
given to you—we benefit more than most other newspapers
when a big news event happens. People who do not regularly buy
newspapers, when a big news event happens—and the most recent
example would be Benazir Bhutto's assassination—the next
day we had quite a sharp uplift in people buying the Telegraph
because part of the brand is that people know that even though
you may not agree with what we stand for, and we are not shy about
what we stand for, you still know that our news is fair, balanced
and straight and you can read our news operation regardless of
who you vote for or what you believe in. We are very appreciative
of the fact that that happens; people still think big news event,
must buy the Telegraph.
Q1388 Lord Inglewood:
Can I just interrupt there? Do you think that you are, on a daily
basis, taking readers from somebody else? Are these readers from
out there who are not normally buying the Telegraph?
Mr Lewis: I certainly hope so, absolutely, there
is an extra element of joy to say they would have been buying
something else. I suspect these are probably the more irregular
purchasers of newspapers who otherwise would get their news from
listening to the radio and might buy the Saturday Telegraph
for the weekend to catch up generally speaking. Life is fast now,
is it not, there is less time for reading. Our average time spent
reading the Telegraph is 53 minutes, it is a long time
people commit to reading our paper every single day, Monday to
Friday, and it is 90 minutes on a Saturday. That is a tremendous
commitment that people make; some people have not got that time,
but they know that they need to know everything about Benazir
Bhutto's assassination and they will get that from the Telegraph.
Big news events are therefore really important for us and we have
to do them very, very well. Similarly, off that, if we get exclusive
information, if we get a political scoop or a business scoop or
a scoop of some other nature, there is a noticeable impact on
circulation, not just in the newspaper but also on-line; people
are attracted to knowing something they would not otherwise have
got had they not clicked on the website or bought a newspaper.
It is a fact, it is also a beautiful thing, that is our business,
it is what we exist to do. Yes is the answer.
Q1389 Lord Inglewood:
You also said in terms of boosting your product you have flanking
measures—I bought some wine off you, I think.
Mr Lewis: Yes, thank you for that.
Q1390 Lord Inglewood:
Thank you, the wine was all right.
Mr Lewis: It is a very good service.
Q1391 Lord Inglewood:
What have you found is most effective in that regard?
Mr Lewis: Really a range of products and services.
The paper is full today of things from lily pond cleaners through
to an armchair—which I purchased myself recently, which
is a particularly excellent armchair—wine is very good for
us, there is a range of products and services that you can now
get. People quite enjoy meeting other Telegraph people, the Telegraph
folk, so when we do something like a night at the theatre it is
incredibly popular for people because not only do they get the
experience of the theatre, they get to mingle with other people
who otherwise they would not meet with; we do discounted restaurants
which people appreciate enormously. Going back to that subscriber
base, if you have got 340,000 people who are paying upfront each
year a considerable amount of money, we work very hard to give
them other things to make them feel good about the Telegraph.
There is a range of stuff that we do.
Q1392 Baroness McIntosh of Hudnall:
Can I just jump in on this; all of that selling is selling other
people's products essentially, you are not the main retailer.
Mr Lewis: Sure.
Q1393 Baroness McIntosh of Hudnall:
What percentage of your ancillary income, as it were, does that
kind of selling on represent?
Mr Lewis: I would use the phrase a considerable
amount.
Q1394 Baroness McIntosh of Hudnall:
So if I buy, shall we say, a case of wine or an armchair, a significant
bit of that price goes to the Telegraph.
Mr Lewis: Yes. It is a core part of our business
model and how we make more than £30 million a year.
Q1395 Baroness McIntosh of Hudnall:
When you say "a core part", as compared with conventional
advertising, say, where somebody is appealing directly to me to
buy their products somewhere else, what does it represent?
Mr Lewis: Of our overall revenues advertising
is more than half and will be for the foreseeable future, but
an increasing amount is coming from that and from other revenue
areas, so that is probably what I should say on that. I ought
to say that part of that is that we have our own call centre in
Chatham, which is a crucial part of what we do. We get an amazing
20,000 calls, letters and e-mails a week from our readers and
customers, it is an incredible kind of opportunity for us to get
to know these people. The reason I would argue we know our readers
and customers better than any other media group is entirely because
of that, so all day long—it is a great place to go actually—you
have people who know and talk to the Telegraph readers
all day long who may have bought an armchair and it was not quite
the right colour, but feel better about the Telegraph because
they are having a better experience about being served with the
armchair. For us, the newspaper, the website, our words and pictures
are the core part, but with that we are able to provide other
products and services.
Q1396 Lord Inglewood:
Can I move on with that because these were described initially
as part of the strategy to boost your sales. Is the real point
of this to make money, or is the real point of it to underscore
or underpin the product as the Telegraph?
Mr Lewis: Both, simply. We have a very large
customer base now, many millions of people, and it has got to
the stage now where they expect us to be providing them with ideas.
I must stress that it has been going on for some time this, we
are just improving it and trying to take it to the next level
now.
Q1397 Chairman:
You said a moment ago that advertising provided more than half
your revenue.
Mr Lewis: Yes.
Q1398 Chairman:
How much does circulation provide?
Mr Lewis: We do not tend to break down the exact
details of that, being a private company.
Q1399 Chairman:
In other words you know it but you are not going to say.
Mr Lewis: No, if you forced me to say it I would
not know it now. I do not know it, but what I do know and will
say is that more than half comes from advertising.
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