Creative destruction, Rupert Murdoch and the rise and fall of the Independent

Could the Independent, in going digital, be showing the way for the rest of the industry? Sadly, I think it's safer to put your money on Murdoch.

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The miracle of the Independent, which will stop publishing in print at the end of March, is that it survived into its 30th year. It was among several newspapers that launched in the late 1980s, that false golden dawn when, after Rupert Murdoch sacked thousands of printers and moved operations to his Wapping fortress, it seemed that anybody with a bit of seed capital could set up and run a profitable newspaper. Murdoch had supposedly served democracy and free speech by breaking the printers’ centuries-old monopoly and moving, as one journalist put it, “from the equivalent of steam to the microchip in a week”. Thanks to his creative destruction, the costs of publishing newspapers had fallen to a fraction of their former levels, allowing papers of all political shades to flourish. The main exponent of this utopian view was Murdoch.

In reality, most of these launches folded quickly – some, such as News on Sunday, a left-wing tabloid run by a workers’ co-op and co-founded by John Pilger, within months. Leaving aside regional launches, that generation’s only survivor, once the Indie goes,
will be Sunday Sport, a tabloid that once ran the headline: “World War 2 bomber found on moon”. So much for the thousand flowers Murdoch promised. As gardeners know, the weeds cling most tenaciously to life.

 

Bliss was it in that dawn

The idea of the Independent was that it should be independent not only of party-political allegiances but also of a dominant proprietor. It sought investors interested in a decent return, not in editorial influence. Control was to be vested in the three journalists who set it up. It was a model of how capitalism, according to capitalism’s supporters, should work.

In the Independent’s early years – I joined at its foundation in 1986 – everything went sensationally well. The paper seemed to revive the spirit of serious, radical inquiry, uninhibited by political preconceptions and unafraid to challenge conventional wisdom, that animated Harold Evans’s Sunday Times before Murdoch took it over. Although its founding editors were strongly in favour of free markets, specialist correspondents on, for example, health, education, industrial relations and law were allowed – indeed, encouraged – to develop their own, sometimes radical, agendas. Many of us were refugees from Wapping. We felt liberated.

Circulation soared; at one point it was briefly higher than that of the Times. The Guardian was rattled. Andreas Whittam Smith, the Independent’s then editor and main founder, talked about a takeover bid for the Times. Somebody should have told him not to be so silly. But we were so drunk on success that nothing seemed impossible.

 

Independent, but not of money

It could not last. In 1993, Murdoch slashed the cover price of the Times by a third, far below what it needed to break even. He slashed it again in 1996 to 10p on Mondays. His pockets were deep enough to cover the losses. The Independent’s were not.

The “founding fathers”, as they were romantically called, first turned to some credulous Italians and Spaniards for “investment” but soon relinquished control. From the mid-1990s, it had proprietors like any other paper: first the Irish multimillionaire Tony O’Reilly and later the Russian oligarch Alexander Lebedev. To both men’s credit, its political independence was never seriously compromised, but neither could stem its losses. They treated it and its Sunday sister as trophy assets. Like many wealthy foreigners settled in Britain – say, Max Aitken (later Lord Beaverbrook) and Robert Maxwell – Lebedev and his son Evgeny seemed to see ownership of a national paper as a passport to acceptance by the British establishment.

 

Downsized and out

When I was the editor of the Independent on Sunday in 1995-96, the papers were owned by O’Reilly and the Mirror Group (later Trinity Mirror). At that stage, the former was little more than a sleeping partner; the papers were run by David Montgomery, the Mirror Group chief executive who had once edited Murdoch’s News of the World. He had little experience of, or empathy with, reporting and writing, which had been the Independent’s great strengths. His background lay almost entirely in editorial management and sub-editing. His aim was to cut costs. He believed, in the management terminology of the time, in “downsizing”. According to Montgomery’s philosophy, the most certain route to the profits that his shareholders demanded was to reduce the number of journalists, not to take the riskier option of trying to raise circulation through investing in more and better journalism.

I once ran a front-page story about how the original advocate of downsizing, an American, had repented and acknowledged that it condemned companies to a slow death. According to the cognoscenti, my editorship was doomed from that day.

 

To paywall or not to paywall?

Has the Independent, the first national newspaper to go digital only, shown the way for the rest of the industry, as it did when it moved from broadsheet to tabloid? The Independent’s own website is mediocre at best, and no strategy for developing it and making profits has yet been revealed. It is hard to see how, with only 20 or so journalists transferred from the paper, it can become essential reading. The Guardian has successfully turned itself into a worldwide digital brand but, since it doesn’t have a paywall and nor can it attract sufficiently lucrative advertising, it needs to make 20 per cent spending cuts, including around 100 editorial redundancies. Its strategy is probably based on a category error, as broadsheet newspapers are usually niche products. In contrast, Murdoch’s Times and Sunday Times, almost invisible to the casual web browser because of their tight paywalls, now claim 172,000 digital-only subscriptions and a profit for the first time in 20 years. Experience teaches me that, if predictions must be made, it is, alas, safest to put your money on Murdoch. 

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article appears in the 18 February 2016 issue of the New Statesman, A storm is coming