Phone hacking: social media is the new front line

Amid the hilarity contained in the news that the Metropolitan Police had lent Rebekah Brooks a horse, which led to the term #horsegate trending on Twitter, is a more serious point.

Well, actually there are multiple serious points, not least why the Metropolitan Police was lending livestock to the Chief Executive of a company it was supposed to be investigating? However, I intend, for the purpose of this blog, to concentrate on the media aspects.

There has been an orchestrated counter-attack over the last 10 days by the media establishment in the form of Michael Gove, current Education Secretary and former Times columnist; Trevor Kavanagh, former political editor of The Sun and Lord Hunt of the Press Complaints Commission. All have waded into the phone hacking debate and on-going Leveson Inquiry to criticise the Met’ for heavy handedness; accuse politicians of wanting a compliant media and Gove, in particular, accusing Leveson of creating a “chilling atmosphere” for the media to operate in.

I was privileged to be able to listen to Tom Watson MP at the Botanical Gardens in Birmingham last week and, in the course of a fascinating evening, he gave some insight into what is going on at the moment. “The danger, “ he said “is not that the public will get bored of phone hacking, but that the media will.”

In other words, there is nothing News International and others in the national media would like more than for phone hacking to go away and leave the status quo, including a rebadged but still compliant Press Complaints Commission, intact. Hence the articles talking about ‘over-reaction’ and the potential ‘threat’ to a free press.

The national media though has form in this area. When the Guardian was the only newspaper running with phone hacking stories prior to the Milly Dowler furore, Alan Rusbridger, editor of the Guardian, was forced, according to Watson, to call in a favour from the editor of the New York Times to get the paper to investigate phone hacking in the UK. The result was the mammoth investigative reporting piece that ran in the ‘Paper of Record’ in 2010.

Is the same happening again? I believe the public remains interested in this story, aghast at the journalistic tactics used by News International and deeply worried about its relationship with the Met. Don’t believe me? Why else would #horsegate start trending?

If the nationals try to sit on this story again however, Watson plans a different tactic. In his own words, “we’ll use social media to get the story out to the wider public.” In the modern media age the national press is no longer the only source of supply.

PS: Watson remains convinced that “there is a lot more to come” in relation to phone hacking, payment of public officials and computer hacking, as events this week at Leveson have demonstrated. The one to watch though is the Tommy Sheridan perjury conviction appeal. I won’t go into the details here, but Watson is convinced that Sheridan will win his appeal which has potentially serious implications for a certain former News of the World editor who subsequently went on to work as Head of Communications for the current Prime Minister!

Sun on Sunday faces a big battle for readers

I note my learned colleague’s blog from yesterday and his cautious optimism for the Sun on Sunday’s success, but I think it is worth taking a rather more sceptical view. Veteran Fleet Street watchers, like Roy Greenslade, have declared that Rupert Murdoch has pulled a rabbit out of the hat, simultaneously getting Sun journalists back on board after talk of mutiny in the ranks and reinforcing his commitment to UK newspapers.

I’m not so sure. It could equally argued that this is a short-term fix designed to appease the Sun mutineers rather than a real commitment. However, I can see the business logic in narrow UK terms, in that the new paper has the potential to do ‘massive numbers’ (as media planners are quick to tell us) and Murdoch needs a big selling ‘Sunday’ to bankroll his other loss-making UK newspapers.

But, and this is the crux, strong interest from advertisers does not always turn into strong sales and readership. Despite lots of positive vibes coming from media planners and News International, I still think it is going to be an uphill battle to get the British public to go out and buy in big numbers.

Firstly, it is going to be very difficult to get back all of the NOTW’s 2.6 million readers in an overall market for Sunday newspaper reading which is in decline. In August 1991 national Sunday newspapers collectively sold an average of 16.2 million copies. By August 2001 this number had reduced to 13.6 million. By August of last year it had fallen it had fallen off a cliff to a mere 8.3 million.

What’s more, circulation figures from last year suggest that, as my learned colleague notes, that more than a million NOTW buyers appear to have vanished into thin air. They did not switch allegiance to the Sunday Mirror or The People or The Mail - they just left the market entirely.

Secondly, reaction from competitors is likely to be brutal in terms of price-cutting and other incentives, as those titles which benefited from the closure of the NOTW attempt to hang onto their gains. News International will launch with huge promotional activity, but all of this eats into profits and cannot be sustained over the long-term.

Finally, there is one other issue which is going to make life difficult for this successor to the ‘Screws’. The NOTW made its name exposing the antics of the rich and famous, but we now live in an era of super-injunctions which can stop an invasion of privacy in its tracks. What’s more, the newspaper industry is fully aware that the Leveson Inquiry is on-going and is on its best behaviour. It will take a very brave editor indeed to splash a typical NOTW scandal story, of the type that made its predecessors name, in the opening weeks of this new venture.

News International will be very gung-ho about this weekend’s circulation figures regardless of what happens, but the real proof will come in March, April and May as the market begins to settle down again. I’m no media buyer, but I suspect with a print run of three million, News International will be hoping for an opening weekend north of NOTW’s final circulation figure of 2.6 million. That is an awfully tall order to sustain once the initial excitement wears off.

Murdoch suffers at the hands of ‘Generation Won’t Pay’?

It’s been a torrid year for the Murdoch family and Rupert in particular.  The media mogul was ‘humbled,’ during hacking gate, closed his only newspaper which actually made any money and was even accosted with a custard pie.  You’d forgive him for thinking that things couldn’t get much worse, but, as they say in old blighty, ‘when it rains, it pours.’

It would seem that Murdoch’s venture into the digital world has not provided the ray of sunshine he hoped it would be and I’m not talking about paywalls.  The tablet newspaper ‘The Daily,’ launched in February, is averaging a rather pitiful 120,000 readers a week.  Bearing in mind that when the paper was launched in February it was declared that it would need an average weekly readership of 500,000 to break even, it’s safe to say that so far it has not been a success.

Why?  It would appear that once again News International is falling foul of what is fast becoming a cast iron law of digital communication that, if it is on the web, then ‘Generation Won’t Pay’ wants it for free.  No matter how insignificant 99 cents a week is, against a plethora of quality and more importantly free content online, we just won’t reach into our pockets.

It is hard to over-emphasise how much of a blow this is for Murdoch.  The tablet was seen as a way of extracting revenue from a bust financial model, namely print media.  Now it would appear that it is back to the drawing board unless of course he makes the Times / Sunday Times paywall actually work.

Don’t hold your breath waiting for any subscriber figures on that though!

Phone Hacking: The waves lap around the Prime Minister’s ankles

Sir Paul Stephenson’s extraordinary resignation statement last night has brought the earthquake that is phone hacking to the doors of 10 Downing Street.

The Commissioner of the Metropolitan Police’s long and mostly self-justificatory statement contained, approximately half way through, a knifing in the back of the Prime Minister. Referring to his hiring of former News of the World journalist Neil Wallis, who was last week arrested in relation to phone hacking, Sir Paul made the following comments:

“Once Mr Wallis's name did become associated with Operation Weeting [into phone hacking], I did not want to compromise the Prime Minister in any way by revealing or discussing a potential suspect who clearly had a close relationship with Mr Coulson."

Sir Paul is in effect saying: “I couldn’t tell you about Wallis because you are close mates with Coulson who would have gone running back to News International to tell them all about our investigation.”

In his statement last night Sir Paul went on to say: "Unlike Mr Coulson, Mr Wallis had not resigned from the News of the World or, to the best of my knowledge been in any way associated with the original phone hacking investigation."

In other words: “I’ve got a good excuse for hiring an ex-News of the World staffer because he hadn’t been forced to resign from his previous job over phone hacking. What’s yours for hiring Coulson after he was forced to resign the editorship of the NOTW?”

There are two key issues now for the Prime Minister. Firstly, to use another Watergate analogy, is there a ‘Smoking Gun’ which points to the fact that he was asked to appoint Coulson by News International or worse forced to appoint him.

The other key issue is how the Tory press will react. Nearly two weeks ago Peter Oborne in the paper turned on the Prime Minster questioning his judgement over appointing Coulson. One veteran reader of the Daily Telegraph said to me it was “the most scathing indictment of a Conservative Prime Minister in the Telegraph since the paper turned on Anthony Eden over the Suez Crisis”.

Many Tory supporters are worried. Last night Tory blogger Iain Dale questioned whether the Prime Minister, indeed the Government, could survive this.

If the Prime Minister is not careful the waves currently lapping around his ankles will be up to his neck.

We live in extraordinary times.

A Good Day for Democracy

Yesterday was (another) bad day for Rupert Murdoch and News International but it was a good one for democracy.

Speaker John Bercow (who is rapidly becoming a serious contender for my Man of the Year) has played a blinder in the last few days. In agreeing to an emergency debate on phone-hacking he has placed the House of Commons at the centre of the phone-hacking crisis, which is exactly where it should be.

The previous speaker (Gorbals Mick) would never have dared get on the wrong side of the previous Labour Government in agreeing to a debate, but Bercow has proved he is his own man (one suspects Cameron and the Whips Office are privately furious with him).

I was fortunate enough to be in the car on the way back from a client meeting and able to listen to a packed House during one of its finest hours for many a year. Tom Watson (who for me had the line of the day “News International had entered the criminal underworld”), John Whittingdale, Bob Stewart, Alan Johnson, Nicholas Soames, Yvette Cooper, Simon Hughes and Menzies Campbell all spoke well, eloquently and without shrillness. For the Government, Dominic Grieve, the Attorney General, made a series of telling points.

For me the big loser was Cameron (it was a good day as well for Ed Miliband at PMQs which even the Daily Telegraph conceded!). Yes the Prime Minister agreed to a Public Inquiry (perhaps even two) but I think he is still behind the curve on this one (and Peter Oborne explains why in today's Telegraph). My concern when he announced an Inquiry was the potential for it to be very narrow in its terms of reference and without teeth. Lo and behold this morning the Independent reports that the PM and Clegg are at loggerheads over whether a judge should take charge of one or both - Clegg wants the judiciary involved, the PM doesn’t.

Frankly, any Inquiry needs teeth and that means a Judge in charge of it who is able to sanction those who refuse to attend (a tried and tested News International tactic) and then cross-examine under oath with all the consequences that entails.

This whole saga now looks as if it could be the high watermark for Rupert Murdoch’s influence on British public life, just as MPs expenses proved a catalyst for the House of Commons. The crucial issue now is how the Government will wriggle out of its commitment to let News International buy BskyB (and it’s going to have to however much it protests!).

Keep watching!

Full disclosure is the only route now for Murdoch

Rupert Murdoch must have thought he was going to have a good summer. The phone-hacking scandal was dying down, Sienna Miller had been paid off and the Culture Secretary had kindly waved through his takeover of BskyB.

And then we find out that the News of the World (NOTW) had been hacking into Milly Dowler’s phone! There are multiple reasons why this is a horrendous story for News International.

Firstly, from a journalistic ethics point of view, it is hard to scrape any lower than this. Regardless of the potential effect on the family of hacking and, crucially deleting, messages it is highly likely that, at best, the NOTW’s actions diverted police resources and, at worst, de-railed an entire investigation at a crucial time.

Secondly, these disclosures widen the dates of the phone hacking back to 2002. We now have a four-year window when we know, categorically, that phone-hacking was taking place, namely 2002 to 2006 not the two-year window (2004-2006) that News International has claimed all along.

Thirdly, Rebekah Brooks, for the first time, can be said to have been in a position, namely editor where, even if she didn’t know, then she should have known what was going on. Previously, under the two-year 2004 to 2006 window she could claim to have been out of the loop.

Finally, this story now has all the potential to gain a foothold in the public consciousness. Previously, exposure of the NOTW’s antics has been almost exclusively the territory of The Guardian and, latterly, The Telegraph, but with the Prime Minister wading in the whole media corps will stoke a strong sense of revulsion on the part of the public.

What does Rupert Murdoch do now? My own view, and it’s long overdue, is that only full disclosure of all the facts, regardless of how painful it will be, will stem the tide now for News International. That means a full cleansing of the augean stables, sackings, full compliance with the police investigation, attendance and an end to stonewalling at Parliamentary Select Committee enquiries and full co-operation with what is looking increasingly like a full Public Inquiry.

PR statements and front page apologies are not going to cut it anymore. What’s more Rupert is probably going to have to cut Brooks free at some point. This will be painful as she is his direct line into Downing Street, but even Nixon eventually sacked his Chief of Staff HR Haldeman.

The Watergate analogy is not cheap. What started out as a “third rate burglary” in the words of the 37th President, eventually brought him down. Murdoch is probably insulated from that fate but he will be keen to ensure that his family are bomb-proof on this one which probably explains why James Murdoch has recently been moved to New York.

Rebekah though is still in London!

Phone Hacking: The Telegraph opens a second front

More woe for News International this morning with reports that a whole host of new (and very prominent) VIPs have allegedly been hacked, most notably Tony Blair and Kate Middleton.

Old news? It looks it at first sight but there are a number of key points to quickly make.

Firstly, if the reports are true we have a new private investigator in question, a certain Mr Jonathan Rees. The News International defence that this was all the work of a rogue reporter (Clive Goodman) aided by a lone investigator (Glenn Mulcaire) has already proved risible, but this is further embarrassment.

More importantly, the news that Kate Middleton’s bank account has been hacked in 2005 demolishes the News International defence that all hacking was undertaken between 2002 and 2004.

Perhaps most importantly, the Telegraph’s running of the story so prominently is a clear opening of a second front in the hacking scandal. Up until now The Guardian, and to a lesser extent the BBC, has made the running with this story with other media organisations tending to shun it. The cynics would suggest that those in glasshouses were wary of throwing stones!

However, the Telegraph in its role as protector of all things Royal and Establishment is clearly going into bat on this one. That’s more bad news for News International because as this story gets more a public airing the more the pressure builds on senior management and the louder the calls for a full Public Inquiry.

What did Rebekah know and when did she know it?

The tangled web that was the Watergate scandal, which brought down Richard Nixon, had lost most people in its twists and turns by the time the Senate started investigating in 1973, but like many complex issues it was boiled down to a single ominous question by Senator Howard Baker, “what did the President know and when did he know it?”

It would appear that the News of the World (NOTW) phone hacking scandal is now reaching a similar point when there is only one crucial question left to answer – namely what did the most senior people in News International know and when did they know it?

The collapse of the rogue reporter defence, the arrests of two senior reporters and last weekend’s mea culpa on a page 3 suggest that senior people in News International know a lot more than they have been willing to admit so far and probably far earlier. How long will its latest line in the sand, namely that only 7 or 8 people were hacked and that £20 million has been set aside in a compensation fund, remain uncrossed? My guess is not very long.

Nixon was ultimately brought down by the Smoking Gun Tape (famously illustrated by Washington Post cartoonist Herblock) on which he was heard to instruct his Chief of Staff, HR Haldeman, to tell the CIA to block the FBI investigation into the Watergate break-in. This was a clear obstruction of justice.

Bizarrely, it might be the actor Hugh Grant who has uncovered the smoking gun in this story. In a New Statesman article Grant has admitted turning the tables on a former NOTW employee by secretly taping him talking about the hacking and letting slip that Rebekah Brooks, formerly editor of the NOTW and now News International’s senior executive in the UK, knew all about it. The extraordinary transcript of the conversation can be read HERE.

The question now is whether the House of Commons Committee investigating the hacking will be able to get Brooks to appear in front of them to ask the same ominous question that Senator Baker posed nearly four decades ago.

Nixon hated the press and would have loved the way Grant has turned the tables on News International. Somewhere, he and the late HR Haldeman are smiling.

High fashion, high stakes

Today, I turn my blogging attention to the world of fashion. Surprised? I don’t see why, those who know me well also know that I can admire a crop-top or a crocheted stitch as much as the next man.

Anyway, I will defend myself no more, the big news is that Times fashion editor Lisa Armstrong and her deputy Luke Leitch have jumped ship to the Telegraph who are cock-a-hoop at their coup. However, there is more to this than meets the eye. Apparently, this is no mere case of the Telegraph dangling much gold in front of The Times’ star pair.

According to rumour (Roy Greenslade’s blog to be exact) both Armstrong and Leitch have become increasingly disenchanted with The Times’ paywall which has seen their readership drop and have resorted to “tweeting like crazy” to maintain their links with readers. Greenslade, in fact, describes them as “paywall refugees”.

This has happened before. When the New York Times erected a paywall around its OpEd pages many years ago the columnists rebelled. Paul Krugman, Maureen Dowd, David Brooks and Thomas Friedman etal threw their toys out of the pram and demanded the return of their readership.

Why? Because those journalists working at the pinnacle of their profession are not mere writers anymore, they are ‘brands’ for whom the weekly column is a loss-leader to get their message to the wider world in the hope that we all then go and buy their books. Think I’m kidding? Try searching any of the names listed above on the Amazon US website and see how many books they’ve each written. Brooks, for example, is currently #2 on the New York Times Non-fiction Bestsellers List.

Can we expect to see a similar rebellion over here? I’ve got news for you, we already are! Armstrong is a contributing editor to Vogue and has written multiple books, both fiction and non-fiction, all with a fashion twist.

An anonymous life behind the Times paywall is no good to her!

Er … define ‘quality journalism’ for me Mr Murdoch?

If you are going to lecture the UK population about product quality it is best if your own wares are pretty damn fireproof.

It was with some interest therefore that I read Roy Greenslade’s always superb blog in today’s Guardian which can be viewed HERE. For those that are short of time it appears that the Sunday Times, complete with its own brand new paywall, has lifted, unattributably, a story from a free website called Gentlemen Ranters for use in its own paper. In other words, the Sunday Times has taken a free story and then tried to charge people for reading it!

My own view has always been that the bullish comments made by News International senior executives prior to the launch of paywalls for The Times and The Sunday Times were a hostage to fortune. To be blunt, if you are going to tell people that they are going to have to pay for a quality product, then by definition you have to provide a quality product, namely credible, well written, informative news that I can’t find elsewhere for free.

In previous blogs I’ve questioned whether The Times has the quality of columnists it once had since the departures and disappearances of Peter Riddell, Alice Miles etal to merit a paywall, but I am well aware that the issue of journalism quality is a murky pond for a PR man to wade into. Suffice to say that with today’s little scoop, Greenslade, a former editor of the Daily Mirror, has given the next generation of journalists a glimpse of what a good, well researched story is all about.

I suspect that somebody at the Sunday Times has had their knuckles rapped today but it would be wrong to single out individuals. The whole paper is going to have to do better than this.

Murdoch digs in for final web battle

Yesterday’s details which emerged about the introduction of paywalls for The Times and Sunday Times (£1 per day for The Times and £2 per day for the Sunday Times) in effect leaves two armed camps dug in facing each other ready for the final titanic battle.

On our left we have the “if it is on the net, it has to be free” brigade who regard paywalls as an intrusion and believe the current newspaper business model is defunct. On our right is the “internet news is theft” brigade who claim that the web is destroying journalism and we have all got to get used to paying for content.

What is certain is that the News International strategy is high risk. I had been expecting some sort of limited paywall to be introduced, perhaps ring-fencing higher value areas of the publication, such as the comment section, but instead they have gone the whole hog and are looking to erect a paywall around the whole of both sites.

The million dollar question is: who will win? Whilst I am loathe to bet against Murdoch I feel he is acting like King Canute here in trying to hold back the inevitable tide. I don’t think that online will completely replace print, at least in the medium term, but I suspect the relationship will have to undergo profound change.

What will that change look like? It's anybody's guess but going forward online, with its continuous updates, will probably become the main driver of publications rather than just a digital version of the hard copy. I would expect the best and least time sensitive writing to be then included in a weekly print version with a much smaller print run. This time delay will make valuable comment and analysis much more important, with hard breaking 'news' likely to become a commodity product, available from multiple sources like the BBC, Reuters and Dow Jones.

In short, the value will not be in telling me what the Prime Minister has said, but will be in telling me what the implications are of his words. The best journalists may well become 'must read' brands of their own, possibly using their online comments as loss leaders to generate a following in order to sell books to their audiences, which is what already happens on sites such as The Huffington Post.

This is nothing if not a radical departure, both for the newspaper industry and journalist working practices, and you can see why News International is digging in for a battle. My fear for them is that the war is already lost.

Murdoch opens a second front

They’re either very worried at News International or very brazen. James Murdoch’s Media Guardian lecture in Edinburgh which received blanket coverage over the weekend is a second front in the attack on ‘free news’ which his father started last month. It can be found HERE

His usual targets list will come as no surprise to anybody, namely OFCOM and, of course, the BBC who are now accused of ‘dumping’ free journalism onto the market. It feels to me like an attempt to corral the rest of the media industry into supporting the News International payment for content policy which his Dad recently announced. Of course, this can only work if he gets everyone else on side and there is no ‘free news’ for anyone to access – hence the attack on the Beeb. Apparently, similar moves by the major news organisations in the States to produce an industry standard payment policy are also underway, albeit in their early stages.

Couple of points. Firstly, is the idea of different media organisations banding together to invoke a payment-only system anti-competitive? I’d be interested to know what OFCOM think.

Secondly, what do they intend to do about websites such as The Huffington Post which is way out in front of most traditional media outlets in its coverage of American politics, but has virtually no journalistic overhead and a low cost base? (Apparently the journalists all write for free in return for generating their own journalistic ‘brand’ and readership following which then buys their inevitable books).

Overall, I think Murdoch makes some good points, but I can’t help feeling that the big winner if he gets his way will be guess who? That’s right, News International.