Patience Wheatcroft was speaking at the latest Gorkana breakfast briefing, along with WSJ Europe's new deputy editor Iain Martin, who vividly compared the RBS directors' rhetoric with 1970s union leaders, who were similarly accused of holding Britain to ransom. The two WJS journalists regarded the bankers' tactics as disastrously misjudged. Martin said he had far more sympathy for taxpayers than bankers.
Wheatcroft supported Bank of England governor Mervyn King's view that 'casino' (investment) and high street banks should be separated, adding that it was a very strange business model to combine the two.
Neither journalist had much sympathy for the government, arguing that it largely has itself to blame for allowing the bonus fiasco to develop. The saga simply showed that Labour never decided whether it had truly nationalised RBS and Lloyds Banking Group, or was merely the largest shareholder, allowing the banks' boards to operate at 'arm's length'.
Google's news?
It's not every day that you get the chance to ask Rupert Murdoch's editors about their boss's battle with Google. But I got that opportunity at today's event when I asked about Google's unexpected partial retreat this week. I wasn't surprised that Patience and Iain took the Murdoch line. ("We don't like people giving away our content for nothing", as Patience put it.) But Iain was clear that newspaper management across the world had got it wrong from the start, giving content away in the hope that "something would turn up" in the shape of a revenue stream. But it simply hasn't happened - for most media owners.
The Wall Street Journal is different. It's the only significant part of Rupert Murdoch's newspaper empire that successfully charges online readers. Its business readers value its content - even if they get their companies to pay the cost of getting past the paywall. It's not the best indication of whether other papers will successfully follow its lead.
By a strange coincidence, today's WSJ included Google chief executive Eric Schmidt's op ed piece countering Murdoch's charge that Google is stealing content. Schmidt pointed out that Google sends online news providers a billion clicks a month from Google News. That's 100,000 opportunities a minute to win readers and generate revenue, he added. Google News only shows a headline and a couple of lines from a story. If readers want to read on, they have to go through to the media owner's website. I'm with Google on this. The search company may have blinked this weak, and made a concession to make it harder for users to bypass paywalls. But it has a greater intuitive understanding of how business and consumers thrive in an online, connected world. The media's rage against Google has echoes of luddites smashing machines in the early industrial age. The reactionaries want to return to an easier, gentler time. But none of us can turn the clock back. Not even the bankers.
Fog in the channel...
Once upon a time, a British newspaper supposedly ran a headline, Fog in channel, Europe cut off. It was probably an apocryphal story, but summed up Britain's parochial view of the world. Iain Martin described how the British media fell into a similar trap this week by getting worked up about the threat to London's financial centre from the EU's new single market commissioner Michel Barnier. Barnier was chosen as part of the deal that made the unknown Briton Baroness Ashton the union's new foreign minister. As Martin says, the British media were so obsessed about the possibility of Tony Blair becoming Europe's so-called president they missed the idea that Barnier's role was the more significant. And, more to the point, were two weeks late in creating ludicrous headlines about a Frenchman destroying London's dominance in financial services. Still, we can probably rely on Britain's home grown bankers to achieve that.
When news and views merge
Patience Wheatcroft made a telling point in favour of the American way of running newspapers. As Harold Evans and others have long argued, the serious US papers cherish a clear distinction between news and opinion. It's the American way, with the two parts of the paper edited separately. By contrast, too many British newspaper owners have used their papers as a mouthpiece, from Northcliffe and Beaverbrook onwards. For them, the whole paper was propaganda. The most blatant current British examples are probably the Sun, Daily Mail and Daily Mirror. But even the Independent, which for many years boasted it was as independent and reasonably minded as its title suggested, came to use its front page to shout its opinions from the news-stands.
Patience also argued strongly in favour of 'double sourcing' the validity of stories. This was a timely reminder of the importance of being right, not first. Just this week, the world's media fell for a flawed attack on Microsoft from an obscure tech company. The Guardian's Technology section amongst others ran a story claiming a new 'black screen of death' in Windows 7. In the same edition, the paper's corrections column carried a grovelling admission that the story was groundless. This kind of reckless disregard for checking the truth is legion in today's media.
And finally: the poacher turned gamekeeper turned poacher...
It was fascinating to hear Patience Wheatcroft talking about her 18 months as a non executive director at Barclays. A recent profile in Guardian said she had wanted to understand better an industry she had covered for so long. As she explained today, she saw 100 years' worth of banking dramas in her 18 months on Barclays' board. But she also saw the failings of her old - and future - trade. "One edition of the FT carried the headline, 'Barclays fails FSA stress test'. The next edition's headline was 'Barclays passes FSA stress test'. The next day, the paper had the cheek to boast that it had exclusively predicted that Barclays had passed the test!"
Gorkana's breakfast briefings are well worth the early trek to London. You get the chance to talk to the top names in Britain's media industry.
PS: if you're wondering where the name comes from, Gorkana commemorates a Gurkha soldier who saved the life of the firm's founder, Alexander Northcott when Alexander was serving with the Royal Gurkha Rifles.
Comments