THE NEWSPAPER AS A BUSINESS ORGANIZATION
The future will belong more and more exclusively to organization and
machinery; and this _obiter dictum_ may be held to be as true of
newspapers, as of anything else. It is necessary in the first place to
make a clear distinction between these two terms, as they each describe
a method of effort, which runs very easily into the other, without any
obvious dividing line. Roughly speaking, the term, organization, is
generally applied to a systematic use of human endeavour; while the
term, machinery, denotes that part of our activities which we have
succeeded in delegating to steel and iron and thereby in saving the
wear of flesh and blood. Obviously the two terms to some extent overlap
on the same ground, because system requires the use of machinery, and
machinery must be employed in systematic fashion.
From the point of view of organization the chief requirement of a
newspaper is continuity; and this continuity must be maintained in
two ways. A newspaper in order to be successful must maintain the same
kind of continuity of opinion that a politician has to establish for
himself in order to secure the permanent support of his constituents.
Side by side with the other and equally necessary for success is the
same continuity of good management and energetic business development,
such as is aimed at in the course of any prosperous business. This
double life of newspapers thus distinguishes them very markedly from
any ordinary enterprise and leads to certain very distinct and not
generally observed results.
Should a newspaper be conducted with conspicuous success for a long
period by its editor and staff and also enjoy the benefit of wise and
far-seeing management, the work of each redoubles the value of the
other to an astonishing extent. The result will be the establishment
of a property of enduring value, not to be paralleled in any other
business, not even by the history of any powerful banking concern.
On the other hand a permanent failure in either respect will sooner
or later bring about the ruin and decease of the oldest established
journals. The process of such a failure will, however, be different
from the course of natural decline to be observed in ordinary
commercial life. Successful editorial conduct of a newspaper will
often prolong its career in spite of mistakes of management, while
good business ability will keep alive for some time a journal, whose
readers are dropping off day by day. It seems to be a law of newspaper
life that mistakes in this business have far-reaching and not easily
discoverable consequences; the fatal decision and critical mistake
will not receive its inevitable recompense until after a period of
delay, which makes the original cause of the disaster only a matter of
conjecture. There is nothing more mysterious, even to a highly-skilled
and discerning eye, than the decline and fall of many powerful and
long-established newspaper properties.
The commodity, which a newspaper has to dispose of, is the most
valuable in the world; publicity. This commodity it dispenses freely
for no consideration whatever in its news columns. It has the power to
set generals, politicians and artists on pinnacles of success and glory
by keeping them before the public and under other circumstances it can
ruin and drive to despair the courtier, the public servant or even the
humblest individual. Any one who has taken a practical part in our
mysterious calling will appreciate its terrible power, especially in
the latter sense. We have all been witnesses of the despairing appeals
“to keep something out of the paper”; as we are equally aware of
prominent men, whose careers, sometimes contrary to merit, have been
created for them by the newspapers. It is out of the same commodity,
supplied under different conditions for purposes of business, that the
newspaper acquires the magnificent revenues from which it can defray
the enormous expenses required by a modern fully-equipped organization
for the collection and presentation of news.
Advertising is the newspaper’s backbone. The world is only beginning
to realize how vitally necessary it is to business. Probably from
£40,000,000 to £50,000,000 a year is spent on advertising with various
journals and periodicals in this country alone. Perhaps as much is
spent in Central Europe and at least four times as much in North
America. All these vast revenues are a subsidy paid by the public
in aid of journalism and for the provision of news. They enable the
newspaper proprietor to give to his readers a product, which costs
him from four to ten times the amount, which he receives from them
in purchase of his papers and in return they give to him and his
advertisers part of their daily attention and ultimately they requite
him by buying more or less of the articles advertised in the paper.
Thus there is an ingenious exchange of services, which makes the
management of a newspaper in a commercial sense almost as complicated a
process as its editorial conduct.
The process is attended by a subtle danger. With the increasing
expenses of modern newspapers under the stress of competition the
necessity of swelling the advertising revenue of a paper becomes of
paramount importance. So the courting of prominent advertisers is every
day more and more the preoccupation of a newspaper manager and he is
apt to listen too favourably to any representations made by strong
monied interests and himself to exercise a corresponding pressure on
the editorial side of the enterprise. Here is the point, where the
newspaper, as an essential feature of its career as a business, may be
said to have a conscience or should have one. The tendency to a decline
and fall into the last stages of commercialism must at all costs be
resisted. If not resisted, it may become suicidal and by ultimately
weakening and losing the hold which a newspaper has on its readers, it
may sacrifice its capacity for usefulness to the public and lose its
own source of strength and revenue. Or worse still, the tendency may
be followed downhill almost to a criminal extent and lead to organized
fraud and systematic blackmail.
Although there are in the United Kingdom considerable differences
both as to accepted principles and also practice between one journal
and another in this respect, yet we are fortunately, with rare and
insignificant exceptions, free from the criminal methods of prosecuting
success. The press of other countries in this aspect we need not
consider. With us the problem of relative independence with regard to
advertisers presents itself within a comparatively small compass. It
is a question of how far newspapers and other periodicals allow the
use of their news columns to the puff preparatory or supplementary for
the benefit of those firms and businesses who contribute freely to the
revenues of the advertising columns. This practice is on the whole
fairly common. There is in it nothing in any way immoral or disgraceful
and it really resolves itself into a question only of dignity and
expediency. Perhaps one might be within the mark in attributing such
practices to a greater or less extent to the weaker half of the press
of the United Kingdom. Those who avowedly adopt these methods place
themselves on an inferior plane and to a certain extent lower their
reputation and weaken their bargaining power. Still it must be admitted
that such surreptitious puffing is often adopted under pressure even by
wealthy and powerful journals to an extent, which makes resistance on
principle to the same demands exceedingly difficult for their weaker
competitors. Among other disadvantages these puffs ultimately tend to
lower the value of the columns openly sold to advertisers and thus to
impair these as a source of revenue.
As I have said elsewhere,[7] the philosophy of publicity is rather
hard to grasp. In some forms it comes perilously near to charlatanry
and quackery and yet in the modern world it is not only a valuable aid
to business but absolutely indispensable. Although the practice has
been known to all ages, it is only the development of the immensely
productive power of the factory system, which has caused its enormous
extension during the last century. In former times goods were produced
with difficulty and found their hungry markets waiting for them. It
is entirely different now-a-days. The chief modern problem is to sell
goods fast enough to prevent a glut of production. To take a concrete
instance from modern America, the output of motor cars as these lines
are written is considerably more than one a minute and in order to
secure continuous cheapness of production this rate of output must be
maintained and probably even increased. All this flood of production
has to be marketed without delay and without intermission. The missing
of even one month’s sale of such a prodigious output would entail the
bankruptcy of half the manufacturers in the kingdom.
[7] See “The Laws of Supply and Demand,” Cap. XV.
It is advertising which supplies the remedy for their ever-present
difficulty. It affords the chief practical solution of the paradox
of modern industry, which requires that goods shall be manufactured
in immense quantities in order to secure cheapness of production and
yet will not allow that they should be put on the market in too large
quantities at a time for fear of creating a glut and lowering prices.
Demand must never be satiated. It must be perpetually stimulated so
as to maintain a steady suction at least equivalent to and preferably
exceeding, the normal rate of output. The most effective and almost
universal method of obtaining this stimulation of demand is by
advertising.
Advertising began by aiming at mere publicity. Then it became
combative and assertive of individual superiority over rivals. As this
grew stale, it assumed blandishing and seductive methods, flattering
the customer and appealing to his intelligence, his discrimination
and his good taste. The latest tendency especially in the technical
journals, where immense sums are spent in this business, is to become
soberly educative. The customer is offered gratuitously the benefit
of the immense experience acquired by the advertiser from an extended
business in meeting the particular needs of the buyer. This is an
eminently legitimate and highly successful method. It is perfectly
true that, where a speciality is concerned, the seller may have far
more detailed experience than the buyer himself. But it hardly meets
the more general case, where the nature of the want is trivial and it
is only a question of which satisfaction to take out of a choice of
several.
One of the difficulties about advertising, of which the newspaper
manager has to take account, is the element of misrepresentation,
which is apt to creep into it. The stereotyped precaution, which has
always been taken to prevent misrepresentation being such as to involve
the newspaper proprietor in damages or to embroil him with other
customers is to refuse to insert any reflection or disparagement of
any recognizable rival goods. The advertisement is therefore driven
back on to a rather tame proclamation of general excellence and of
the pre-eminence of the article advertised over rivals in general.
Of course the utility of any device, so tame as this, is rapidly
exhausted, so that advertisers have long learnt to vary the appeal and
the claim in every possible way. But although the form changes, the
methods are few. The earliest method was the attempt to use literary
skill, but as this necessarily appealed only to a class of people
very much on their guard against advertising of all kinds, it was
soon abandoned. Another method was the surprise. A long story would
be printed with a little tag at the end advertising some nostrum
or necessary. This was speedily discounted and disused. Then mere
blatancy became the general rule. Advertisers appealed only to the eye
by wearisome iteration. Curiously enough such a policy, apparently
trivial to a primitive degree, has held its own for decades against
devices of a much more elaborate kind. But in the newspaper itself
severe limitations are imposed on this method both by the paucity of
type faces and the mere cost of space. It has come therefore to be
almost exclusively the weapon of the very rich, who are able to buy
whole pages at a time of the most widely circulated and most expensive
journals. Lastly and perhaps the most successfully of all, illustration
has come prominently into use. Here again the limitations of the medium
impose themselves. It is not every kind of design or sketch, which is
effective under the rough conditions imposed by the rapid printing of
the daily press. The managers of newspapers themselves being aware of
this are not anxious to encourage this form of enterprise and some of
them exclude it from their columns. The legitimate field for its full
florescence has now become the pages of the popular magazine, which
are printed with monthly deliberation on the flat and thus secure a
high degree of excellence in technical execution and reproduction. The
American magazines are the most suitable home for brilliant expository
work of this kind and in many cases the ingenious advertisers have
succeeded in making their advertisement pages a serious rival in
interest with the pages in the text.
All these efforts, while they are strictly speaking the chief concern
of the advertiser, become by proxy the daily problem of the newspaper
manager and of his familiar spirits, the advertisement solicitors
for the journal or periodical. This is a task very much better
understood and executed in America than in Europe and a high degree
of expertism in advertising has become a _sine qua non_ of newspaper
management everywhere. The work is as often as not now carried on by
a highly-trained staff including writers, artists and canvassers, so
that the manager himself has nothing more than a general supervision
and direction of policy. It is especially his province rightly to
appraise the class of readers, whose patronage he has, so to speak, to
sell to advertisers, to advise as to the best methods of approaching
them and to lay down general rules and a scale of prices regulating the
advertising, which his paper is prepared to take. Such a responsibility
is a very serious one because the rules and conditions, under which
this traffic has to be carried on, cannot be changed very often and
once established the rules must be observed with judicious strictness,
as any suspicion of partial or favoured treatment would unite his
customers fatally against his paper. He must never forget that the bulk
of his custom comes to him through a profession of the most suspicious
people in the world, the advertising agents, whose pre-occupation it is
to secure most-favoured-nation treatment each for his own customers
and to prevent any one else stealing a march on them.
Let us examine this problem as it presents itself to the manager of a
London daily morning newspaper. The complication of it can be seen by
carefully examining the columns of a typical daily like the _Morning
Post_ or _Daily Telegraph_. Advertisements for these papers divide
themselves into two classes, displayed and classified. In the first
class come all those miscellaneous announcements, whose character we
have discussed in general terms above. The advertiser in these cases
practically buys so much space, sometimes in column form, sometimes
across column rules, in which case he is almost invariably charged
a higher rate. In this space he frames his advertisement using the
special kind of type laid down by the rules of each paper, which in
the United Kingdom vary greatly from the extreme conservatism of
the _Morning Post_ to the unlimited license of some of the smaller
provincial dailies. It is becoming increasingly the practice to sell
space of this kind at a “flat rate,” which is an American term meaning
a fixed price per inch with reductions for a quantity, allowing the
advertiser to make his advertisements what size he likes and to repeat
them at his own convenience, as opposed to the older English custom,
where so many specific columns and half-columns were sold at certain
regular intervals of recurrence, restrictions which imposed needless
trouble on the advertiser and often interfered with the most effective
display of his advertisements.
But with regard to classified advertisements, that is, advertisements
grouped under regular headings, more old-fashioned usages prevail.
Probably no two papers in the country have exactly the same scales
for this kind of advertising. The reason is not far to seek. Every
paper has some little connection in a special class of advertising
arising out of the ineradicable habits of the public. For instance the
_Morning Post_ is pre-eminent for domestic servants, the _Daily News_
for pressmen and compositors and I remember one provincial daily, now
dead, which even _in articulo mortis_ was the only organ through which
the barbers and hairdressers of Lancashire sought for new situations.
It followed that the scales charged for this extremely varied volume of
custom are roughly governed by the simple rule adopted by railways in
fixing their freight rates, of charging whatever the traffic will bear.
Each paper will put up the rates on its own specialities and charge
less for custom which it is trying to draw from a rival paper.
The expectation of attracting custom from elsewhere in classified
advertising is very seldom fulfilled. The habits of the public are
extraordinarily stable in this respect. When once a paper is recognized
as the special organ for a particular purpose every one has to buy it
in this connection and people save themselves the trouble of looking
elsewhere. The most outrageous overcharging will very seldom drive
this custom away, but it is very unwise for any manager to attempt
it, as he may easily injure his general reputation for justice and
thereby lose other business. The most important groups of classified
advertising are as follows: financial, theatrical, public notices,
losts and founds, educational, auctions, property to let or for sale,
situations for clerks, situations for servants, births, marriages and
deaths. Of course there are a good many general announcements under
special headings and in addition there are cross classifications, as
when special prices are asked for special positions in the paper, of
which the most usually prevailing variations are an extra charge for
advertisements next reading-matter and for announcements printed in
what has come to be universally known as the “agony column.”
Next to the skilful handling of his volume of advertising, the chief
pre-occupation of a newspaper manager is the cultivation and increase
of his circulation. Some people would say that it precedes the other
in importance, but this is hardly the case. It would be so, if it were
the business of no one else but the manager to secure readers, because
circulation must antedate advertising or any rate it must appear to do
so. The fundamental responsibility for the circulation remains with
the editor, who has to produce a paper permanently interesting to his
readers, whether these are drawn from a small and select class or from
the masses of the general public. The manager’s function with regard to
circulation is to improve his machinery of distribution to the limit
allowed by the means at his disposal and to secure the utmost publicity
for the efforts of his colleague.
This is a very much more difficult task than appears at first sight.
One would naturally suppose that to an expert in advertising and
publicity, as a newspaper manager has to be, the marketing of his own
wares would be an easy task. That it is not so, is due to the fact that
the commodity he has to offer for sale differs in kind from any other.
The chief form of publicity, whose peculiar virtues he is perpetually
extolling, namely advertisement through the press, is almost closed
to him. He can use his own columns to puff special features only to a
limited extent and probably to very little advantage. He can hardly
use rival papers to his own, except on very special occasions, without
increasing their revenue and prestige and to some extent confessing his
own weakness. To appeal to the readers of papers of a different class
is to approach a public, which probably does not want him. Worse still
is the habit of using for the purpose of newspaper propaganda other
means of publicity, such as the hoarding in the country or the placard
in public places. These are inevitably cheapening in their effect on
the public mind and it is his daily business to say so to his own
clients, who bring their advertising to him.
He is driven in the end to occasional and impromptu methods such as
the distribution of interesting copies of his paper, the production
of various subsidiary publications, whose circulation may keep his
paper before the public or the organization of little tricks and
surprises. None of these devices however can ever be expected to
advance the interests of his paper very seriously. The real propaganda
for a newspaper therefore remains in the hands of the editor and his
resources are of a simple nature and must be used continuously and with
the greatest possible skill. First and foremost he must make for his
paper the reputation of being the most efficient and, more important
still, the most alert in his own district. He must miss nothing and
score a “beat,” when he can. Secondly he must identify himself and his
paper conspicuously with all local efforts, needs and opportunities. He
must be prompt to hear and take up grievances, to track down scandals,
to open subscription lists for the sake of important public charities
of an occasional kind and to bring prominent names conspicuously before
the public. Lastly he must watch anxiously for any legitimate object
of sensationalism, such as is sometimes offered in a war or, as is at
other times the case, may be invented and planned in the office of the
newspaper. Such were the _New York Herald’s_ expedition to discover
Livingstone, the Jackson-Harmsworth expedition to the North Pole, or
the rescue of a white girl from Cuba by a New York paper. This class of
sensation is only within the reach of a very long purse and moreover
is valuable to none but popular journals. The readers of higher class
circles are apt to be thoroughly bored with reiterated details on a
subject, which soon becomes stale, while yet there is no other method
than this by which the newspaper can secure a suitable return for its
enterprise and heavy expenditure.
One of the vexed questions for the publisher of periodicals is properly
to assess the relative value of a large or small circulation. Some
small circulations especially of a technical kind have a far higher
value for advertisers than a large one of poorer quality. On the other
hand, if the readers are of too high a class, they are not to be hit
by the efforts of the advertiser and the revenue therefore remains
small. I know of one paper, which is unique in this respect in the
world. It is the _Zeitschrift des Ingenieuren Vereins_, whose editorial
product stands on a level of technical excellence unapproached in the
engineering world. Yet it has the large circulation for this class of
journal of 20,000 or 22,000 a week and a very considerable advertising
revenue. The secret of this success lies in the fact that it is a class
organ circulating to _all_ the members of the immense association of
German engineers, which includes not only all German engineers but
innumerable foreigners, who have come to Germany to be educated in
Charlottenburg or in their other admirable technical schools.
But with regard to the general and daily press it may be said that
both in the United Kingdom and in America newspapers tend to range
themselves in grades and in each grade it is the largest circulation,
which brings in the greatest advertising revenue and profits. The
highest grade has the smaller circulation but a monopoly of certain
kinds of advertising, which is the backbone of its security. The lowest
grades have immense circulations, high rates for advertising and very
large revenues. But because the readers in this grade are mostly people
of small means these newspapers are not the best organs for those
expensive articles of luxury on the sale of which the largest sums of
money are spent. The largest volume of business therefore undoubtedly
goes to the middle grades, where considerable circulations prevail
among the wealthy middle classes. The most profitable _clientèle_ for
a newspaper is among the vulgar rich, who are easily led in their
habits and expenditure by the suggestions of fashion and the interested
blandishments of the skilled exploiter.
Of all the functions exercised by the manager of a great newspaper
property the most serious and responsible is his collaboration with
the editor in weighing the relative advantages to be gained and the
cost to be incurred by enterprise of all kinds. Unfortunately for
newspapers, while they are driven by a law of their being to assert
themselves wherever possible by venturing on new ground this can
practically never be done without the outlay of very large sums of
money. Here is certainly a case, where two heads are better than one.
The editor is generally the executive, as he knows that very little
effort is permanently remunerative, which does not improve the quality
or extend the influence of the publication. But he is very seldom the
best judge of how much can be risked for a certain object and whether
the object itself, even when successfully gained, will really be worth
the sacrifice. There are certain cases, such as war correspondence,
when reckless expenditure, perhaps of two or three years’ income, may
be forced on a newspaper by competition. There are others where the
risk and expense may be optional, such as the organization of special
correspondence abroad, the establishment of new and permanent features
of the paper, the starting of a new edition for local distribution, or
perhaps of extending the area of circulation of the journal by going
earlier to press and catching special trains.
The special train has been a very important feature in the changes,
which have come over journalism in this country, both in the provinces
and especially in London. Unlike America where spacious habits in
geography confine every newspaper to the suburbs of the populous
towns, Great Britain can almost be reached in all its corners before
breakfast by morning papers printed in central positions. The result is
a perpetually recurring struggle for better facilities of distribution
involving increased expenses and altered habits. There was a time when
provincial newspapers “went to press” early in order to utilize the
ordinary mail trains which generally left at or near midnight. London
on the other hand, which had no large towns near to it, generally
closed for press only at 3 a.m. But the special trains have radically
changed these habits. To the best of my knowledge the first paper to
run special trains of its own was the _Manchester Guardian_, whose
object was to improve the paper by giving more time before “press”; the
special train in this case postponed publication from 12.30 to 1.30
a.m. with very beneficial results.
In London the process of change was reversed. London has the serious
disadvantage of being at one end and in one corner of our little
island. To reach the great populations of the Midlands, the North and
the South West a series of special trains costing enormous sums of
money were started about 2.15 or 2.30 with the result that the hour
for “going to press” was moved forward from 3 or 3.30 a.m. to 1.30
a.m., seriously cutting down the possibilities of considered literary
production. The example of this exacting competition was first set by
the _Daily Mail_ at the outbreak of the Boer war and was necessarily
followed by every London morning paper. How severely this was felt by
the weaker brethren of the press, the following story will illustrate.
I was assured by the proprietor of a prosperous newspaper that the
increased expenditure on this competition at that time entirely wiped
out his current profits for some years and reduced his property to the
position of a journal struggling to establish itself. The indirect
effect on the editorial staffs of newspapers was also disastrous to
some. The result of curtailing the time for journalistic effort placed
those papers, whose speciality was superior literary style and well
weighed judgments, on much the same footing as the cheaper papers.
As a partial relief from the expense of special trains and carriage
of newspapers it has become the practice for the progressive popular
papers of London to print elsewhere local editions, which have also
the advantage of meeting local needs both with regard to news and
advertisements in a way that a purely metropolitan issue can never do.
In this respect also the initiative was taken by the London _Daily
Mail_, which at the turn of the century established a branch office and
printed a northern edition in Manchester, from whence it could reach
all the north and the greater part of Scotland by breakfast. This was
followed some years later by a special edition in Paris, in which the
local edition is printed in French. It has since extended its grasp by
starting a Midland edition in Birmingham. The _Daily News_ followed
the example of the _Mail_ by establishing a Manchester office but it
anticipated the _Mail_ by being the first to go to the Midlands. The
London _Daily Chronicle_ has followed the other two to the Midlands and
will probably end also by going up north. To the best of my knowledge
the first daily paper in England to start a special local edition was
the _Manchester Guardian_, when it produced its Welsh Edition about the
years 1894 or 1895. But the practice had long been common among the
weekly papers of the country.
Analogous to the enforced expenditure on communication is the provision
that has to be made for cabling foreign or special correspondence. In
this matter the pressure to follow the example of a richer competitor
is not overwhelming, as readers have different tastes and many are
almost indifferent to foreign news. Yet every paper feels very severely
the indignity of being obliged to admit inferiority in enterprise and
of publicly taking a seat in the second row in any respect. Yet the
cost of cable messages is sometimes prohibitive and they have to be
summarily cut off on occasion. In any system of foreign correspondence
by cable, the salary of the correspondent is a mere trifle compared
to the expense of telegraphing. Every foreign correspondent is aware
that his fate, as far as that particular position is concerned, is
determined much less by the quality of his own work than by financial
plethora or stringency at home. It has been the fate of many, as it
has once been mine, to find themselves quietly snuffed out by the
application of this effective extinguisher.
A new terror has been added to journalism in America, though hardly yet
to the same extent here by the use of wireless telegraphy. In New York
all the leading papers have wireless plants, which they use not only
to transmit and receive their own news but to intercept where possible
those of others. It is credibly repeated that after the Titanic
disaster one of the causes of the appalling confusion of reports and
rumours was that every newspaper kept getting fragmentary messages
intended for every other and the most absurd and self-contradictory
accounts passed current without any attempt to verify them. Clearly in
future the manipulation of press messages by wireless telegraphy will
have to be very severely curtailed in any future naval war. In fact it
seems to me that the only possible road to security will be to forbid
it without any exception.
The latest development in enterprise of this kind was recently devised
by the _Liverpool Echo_ and the _Liverpool Express_ in conjunction with
the _Yorkshire Post_ and the _Manchester Guardian_. When Mr. Winston
Churchill made his sensational irruption into Ulster at the beginning
of 1912 the public wires were entirely taken up with general orders
and the lease of a special wire was impossible. The speech was then
reported by undersea transmission over the electrophone, the first
time that this instrument had ever been used in that way. There were
thirty-two transmitters placed round the platform where Mr. Churchill
spoke and his voice was heard distinctly in the Liverpool offices and
his words were then taken down as he uttered them.
The mention of the telephone reminds me that much that has been said
in this chapter and elsewhere with regard to the telegraph applies
also especially to the telephone, which in some respects is an equal
and even better competitor. Some of the London press agencies use this
form of communication for reporting police cases and other immediate
items of news to the complete exclusion of the telegraph. At one time
I had to examine very carefully the merits of a wireless system of
telephoning through the ground for this purpose but could not persuade
myself, that it would operate with accuracy and inevitable success. I
have heard no more of it.