Implicaciones y Limitaciones

The third manifestation of the influence of advertising is in the ownership of newspapers, as its market-orientated nature attracted large corporations interested in benefiting from the 20-40 percent profit margins enjoyed by some newspaper publishers in the late 1990s and early 2000s (Cole & Harcup, 2010, p. 55; McChesney & Nichols, 2010, p. 33; Meyer, 2009, p. 43;

Soloski, 2005, p. 71). At the birth of newspapers in the 17th century, owners were typically individuals such as printers, booksellers or authors, but by the mid-1700s there emerged a new pattern of ownership in London, where booksellers began to band together as shareholders of the larger newspapers, attracted by the cash returns made possible by the profitable mix of sales and advertising, but also by the opportunity to advertise their own wares and even freeze out the advertisements of their rivals (Harris, 1978, pp. 92-93). It is apparent that commercial interest lay high above innovation in the priorities of these groups, and the power they wielded over distributors also stifled competitor newspapers from establishing themselves (Harris, 1978, pp. 94-95). The financing of these newspapers relied mainly on cover price and, to varying degrees, advertising revenues, but money also sometimes came from those seeking to directly set the editorial agenda. This was due in part to the growing political influence of the press in the 18th century, which encouraged those in power or in opposition to invest both in their own pamphlets and essay sheets, and also to pay the established news sheets to write copy favourable to their views. Even public funds were used in this way, with one government of the day documented as spending £50,000 on propaganda in a 10 year period, mostly by paying the London newspapers to write in its defence (Harris, 1978, p. 95). By the 18th century, more styles of ownership came to be seen, with individuals or partnerships proving to be innovative and often very successful, unencumbered by the slow or inefficient syndicate ownerships that had come before them. The syndicates that were successful were more usually those that were under the control of a single, powerful individual, mandated to make key decisions.

21 A few chains of newspapers were also established in the 19th century, though these were small scale and not typical of the industry as a whole. Many regional newspapers began to be owned by families, as newspapers changed hands by marriage or through inheritance (Asquith, 1978, pp. 103-105) – a pattern that grew through the 19th and 20th centuries (A. Lee, 1978, p. 124). However the mid-19th century saw the expense of reporting, writing, printing and distributing news rise, and this made it expensive to establish a newspaper, or even run an existing newspaper.

In 1844, the Companies Act came into force, making establishing and owning joint-stock companies a possibility, and in combination with the financial burdens and opportunities for profit offered by newspaper publishing, thousands of new companies entered the industry as a result (A. Lee, 1978, p. 125). This heralded a new age of companies, and it was these larger, and more structured organisations that dominated the ownership models of the late 19th and 20th centuries. Companies and corporations were better able to afford to spend capital in

establishing a newspaper, absorb the ongoing financial risks and handle the increasing volume of work associated with filling, printing and distributing a regular newspaper. Corporations were also attracted by the profits offered by newspaper ownership, which had now begun to yield large returns from advertising sales (Asquith, 1978, p. 110; A. Lee, 1978). Arguably, the dominance of corporations in the industry led to an emphasis on profit as the primary motivation for newspaper production.

Acquisitions and mergers led to an increasing concentration of owners intent on “edging out” or taking over smaller, weaker titles or companies and closing or amalgamating them into other newspapers (Murdock & Golding, 1978, p. 134).As Murdock and Golding note: “By weeding out some of the smaller concerns, this thinning of the ranks reinforced market

dominance of the leading five companies; and during this period [1921 to 1937] they increased their market share from 15 per cent to 43 per cent” (p. 135). This trend towards the

concentration of ownership continued into the inter-war period, providing fertile ground for the

22

emergence of the first press barons. These moguls headed large media empires with multiple titles under their control. Lord Northcliffe and his brother Lord Rothermere (the Harmsworths), the Astor brothers, the Berry brothers and Lord Beaverbrook were among the first of these and newspaper titles were commonly bought and sold among them, with some titles changing hands several times during the inter-war period and the decades following the Second World War (ibid). The age of press barons faded into a new era of “entrepreneurial proprietors” in the mid-20th century. Though many of them were interested in the political clout afforded them by their newspapers, their primary focus was making a commercial success of their newspapers – again Murdock and Golding note the stance of Lord Thomson, who “repeatedly maintained he didn’t care what editorial position his papers took as long as they made money” (p. 142).

Today owners of local newspapers in the UK are more likely to be large multi-national corporations who are able to invest in newspaper businesses and are intent on making a profit, and do not typically prioritise editorial quality (Soloski, 2005, p. 66). There are many examples of this kind of owner, but News Corporation, which owns The Times and Sunday Times, is perhaps the best known. Run by notorious magnate Rupert Murdoch, the multi-national media conglomerate dominates print and television media in several countries and made around $2.4 billion in one quarter of 2013. The company separated its newspaper and publishing divisions from its more profitable TV and media divisions in 2013 (Neate, 2013), though both divisions remained under the control of Rupert Murdoch. The separation of the company into the

publishing company News Corp and the TV and media company 21^st Century Fox was welcomed by city analysts, one of whom anonymously wrote:

We believe that the publishing unit has outlived its usefulness as a cash cow […] We are impressed with the fact that News Corp's publishing business is still more profitable than other similar firms. However, we can admit that print media is at best a cash cow and at worst, a declining business. Even if News Corp did not have the phone hacking scandal with News of the World, it would make sense to sell or spin off the publishing

23 division to allow shareholders direct exposure to News Corp's higher profit, higher growth entertainment properties. We believe that NWS will see its financial

performance enjoy strong growth once the publishing spin-off is completed, and we believe that will bode well for the company's share price going forward. (Greenslade, 2013; Saibus-Research, 2013)

This kind of emphasis on the financial performance of a publishing company sees a publishing division “content to muddle along in the mediocre operating environment for publishing assets”

but does not recognise the value of these newspapers to their readers, communities or society as a whole. As Meyer points out, only mediocre newspapers, ones whose quality is not excessive, and therefore not too expensive, are of value to shareholders and investors: where quality is too high, “the money spent on those projects should be left to fall to the bottom line” (2009, p. 11).

This can be observed across the News Corp business. India has been a recent expansion for Murdoch, where his StarTV has been built from the ground up, establishing infrastructure and new channels. StarTV has also established and developed new markets for advertising and re-written the rule book on the production values and quality of television programming in order to maintain popularity with audiences and satisfy the requirements of advertisers (Thussu, 2007). Again, the profits-first approach of this corporate generation of owners has a direct influence on the type of content on offer, and this is at the heart of the way advertising revenue and the focus on profits it encourages has influenced the development and editorial content of news.