Gorkana meets John Micklethwait

8 March 2010 | written by Ciar Byrne

John Micklethwait started out as a banker, but decided to switch to journalism. “I didn’t really enjoy banking and I thought I might enjoy journalism. It’s not much more complicated than that,” he confesses.

As editor-in-chief of The Economist – he joined the magazine because it “looked interesting” – he enjoys the best of both worlds. His thirteenth floor corner office in a tower block tucked away behind the stuffy charms of London’s St James’s Street is favoured with views few buildings in the City can rival.

Between jetting off to Davos for the World Economic Forum, and returning to London to oversee the closer integration of The Economist’s website with the print version, he is a difficult man to pin down. But we manage to find a slot, while he wolfs down soup and a sandwich before his next management meeting.

It has been said the global economic crisis was good news for The Economist. The recession pushed the title’s core subjects into the lime-light, boosting weekly circulation to 189,281 in the UK and nearly 1.4m worldwide.

But Micklethwait is not so sure. “I think we may be faring better than others, but it’s still a tough market. Our advertising is down by around 20 per cent,” he admits.

The Economist has had to cut costs, particularly on the commercial side while in editorial there have been pay and hiring freezes. “Yes, that sounds better than sacking lots of people, but it’s still quite hard,” he says. Such tough decisions helped The Economist Group to increase its operating profit by 26% to £56m in 2009.

Readers turned to The Economist, founded in 1843 to campaign for free trade, to help them understand big events such as the election of Barack Obama and the collapse of Lehman Brothers, although this effect has tailed off.

“People probably feel more threatened now by what is happening around the world than they ever did before, so we have a big foreign staff and our aim is to keep on expanding our network overseas,” says Micklethwait. The Economist, which comes out every Friday, is printed simultaneously in six countries including the UK and the US.

Before taking over from Bill Emmott in 2006 to become the 16th editor of The Economist, Micklethwait ran the title’s business section, set up its Los Angeles office, ran the New York bureau, and did stints as Media Correspondent and US Editor. He has been in pole position to observe the dramatic changes in journalism both here and in the US. Back in the early 1990s, he had an office at the LA Times, one of the great US metropolitan dailies, which has since suffered major job cuts.

“The LA Times felt like an impregnable castle, much more secure than any of the British papers. It had a monopoly over one of the biggest cities in the world. The big American newspapers couldn’t go wrong.”

But go wrong they did, and Micklethwait believes a flawed business model was to blame. “The big city US papers had a business model which was heavily based on classified advertising. Rupert Murdoch once called classified advertising a ‘river of gold’. Suddenly a technology shift came up which stopped that river of gold.”

 

 As to how to solve the problems of newspapers on both sides of the Atlantic, he is only prepared to give a “wishy-washy” answer. “Probably more people will pay for something online, but a lot of it will come from advertising.”

The Economist has flitted between erecting a pay-wall to read its content online, taking it down and putting it back up again. The current overhaul of the website involves dividing it into “channels”, which correlate to the different sections of the print version of The Economist.
The title has created a new layer of channel editors, who report to section editors. “We will end up with a homepage that is a competing forum between all these different channels,” says Micklethwait.

He wants readers to engage more with the website. “You have a clever group of people who come to The Economist. Some come to the internet site, because they want to find out what we think is important, what do we think about the new inflation figures in Britain. Other people come because they want to take part in a debate; they want to argue about stuff. The plan is to get them to debate with each other as well as with us.”

However, the technological development which he believes will change journalism even more than the internet is the hand-held e-reader. “I think the iPad is a huge development and the Kindle is a gigantic development. They are likely to have more of an impact on our industry than the internet has. I would expect in five years 10 to 20 per cent of our subscription being to people who use those gadgets.”

“The reason why it makes a difference is you finally have something about the same size as a magazine which you can carry everywhere. You are going to have one thing which is going to become effectively your information source. It’s going to be a big deal.” In two to three years time, he argues, e-readers will offer more sophisticated options such as being able to click on charts to find out more about the numbers behind them.

Reviews of The Economist’s Kindle subscription package on Amazon.co.uk complain about the high price. At around $12 a month the title is considerably more expensive than some of its rivals: Newsweek and Time magazine charge $2.99 a month, while The Spectator is $4.99 and the New Statesman $5.49.

Defending the pricing strategy, Micklethwait argues, “I think it’s very important with these new gadgets that people do not look at them as extras, and I suspect this is as key to the survival of the media as anything else. Magazines and newspapers should look on these as things that could replace their basic product. If they don’t want to make money on them then they are committing assisted suicide.”

The Economist does not face the same pressures as a 24 hour news organisation, although it describes itself as a newspaper and attempts to cover the main business and political events of the week. “People come to us for analysis, which means we have to be up to date – one of the impacts of what we’re doing at the moment is that the home page will change much more often – but we’re not trying to become a daily newspaper.”

While the title’s unique format gives some protection in a difficult market, its editor is by no means complacent. “Fundamentally what we’re all competing for is somebody’s time and somebody’s money. In the end somebody has to buy us rather than buy a collection of different newspapers, or watch the TV, or even go for a run. We have to produce stuff that is interesting enough to make that leap,” Micklethwait explains.

He believes there are two main factors which have driven the success of The Economist in recent years. The first is globalisation, “to the extent that somebody in Britain needs to know what has happened to China’s fertility rate, or why Haiti was in the state it was”.

The second is what Intelligent Life, The Economist’s quarterly life and culture spin-off, has described as “the age of mass intelligence”.

“Look at the films people are watching, at people pouring in to literary festivals, symphony orchestras, art galleries; the museums are fuller than they have ever been. People want to have some room for ideas in their world. They will go and buy a copy of The Economist, or a copy of Prospect. But they don’t necessarily think ‘I’m a serious person’. They also buy things that are much more overtly trivial at the same time. People want variety.”

The magazine has ambitions to expand its readership in the UK by reaching out beyond its traditional business audience. Micklethwait says, “Our new drive is to appeal to a much broader audience. The more people we can get to try it, the more they will think about it in a different way.”

In a bid to attract new readers, the title ran a memorable cinema advertising campaign last year in which a man walks above city streets on an ever-ascending criss-cross of red tightrope wires, with the strap-line “Let Your Mind Wander”, which it intends to follow up this year.

Although he is keenly aware of the problems facing the industry, Micklethwait remains optimistic about the future of journalism. The Economist is a supporter of the Catch 22 Academy, which aims to help young people break into the media. He says, “For anyone who is young, clever and has got good ideas there is hope. You could argue that the fact there is such huge carnage in our industry creates opportunities for young people in ways that it didn’t before.”

In 20 years’ time will people still be reading the print version of The Economist? “I hope so and I think so as well. Print is a very convenient product – it’s something you can roll up and put in your pocket. The question is whether in 20 years’ time it will be a majority or a minority format.”