The publication's chief executive explains how a mistake transformed his website and why he is relaxed about losing print sales
PLEASE NOTE: Add your own commentary here above the horizontal line, but do not make any changes below the line. (Of course, you should also delete this text before you publish this post.)
Andrew Rashbass, the chief executive of the Economist group, starts by putting it down to good fortune. That’s not the financial kind, but a happy historical accident. Against the inexorable downward circulation trend for print publications in Britain and the United States, the Economist has been growing for years – but his first explanation is because it is written in English.
Why should that be? Rashbass says with commendable candour: “The single biggest reason why we’re successful is that we are very, very lucky.” To underline that he is being serious, or semi-serious at least, he points to “the extraordinary luck” of publishing an international magazine in English, which has become a universal language. Then there was the arrival of globalisation. We didn’t seek it, he says, it just came to us.
In the first six months of this year, the Economist’s audited sale reached 1,486,838, which was more than 3% up, year-on-year. Its US sale, at 844,000, is regarded as a phenomenon. Meanwhile, the group’s half-year results are due out and are expected to show further progress after three successive years of record profits.
So it comes down to being in the right place at the right time with the right product. Well, up to a point. No one can doubt the overriding importance of the magazine’s content, which is overseen by John Micklethwait, the editor since 2006. The magazine can boast that it forecast the downfall of Egypt’s Hosni Mubarak as early as July 2010, with a cover showing a statue of the president sinking into sand dunes.
However, with every title, there is a separation between church and state, and Rashbass is the chief suit. So in this interview, his first for more than four years, he says he wants to tell a commercial story, not an editorial one. In fact, it turns out to be more of a digital story.
Rashbass begins with a preface: “Print sales are holding up but I expect them to go backwards.” Then he continues: “I’m relaxed about that because I am convinced we will end up with a bigger paid circulation in the end.”
He is not talking about the magazine’s website users, but about the anticipated take-up for the Economist’s tablet apps. It is 18 months since the magazine launched a Kindle app and about 12 months since it did the same for the iPad and iPhone.
Now the magazine boasts 100,000 digital subscribers. They do include website users, though they are the minority. Kindle accounts for a smallish proportion too. The bulk has been attracted by the iPad app.
It is a screen replica of the print issue’s pages that eschews any need to scroll, making it a reading experience that is far closer to holding a printed magazine itself.
There are interactive ads. Once downloaded it is cached. And, most enterprising of all, there is an audio function. Every article can be heard, allowing it to be “read” by anyone, from car-bound commuters to gardeners.
The history of the app’s launch is a story that stems, if one accepts Rashbass’s self-deprecating story, from another piece of luck. Before he became the chief executive, he ran the Economist online and was responsible for its website. He says: “When I was struggling to position the website I made a mistake, which turned out to be a positive mistake. I thought we should do the same online as we did in print, simply transferring from one platform to the other. But we carried out research around the world among educated people who didn’t read the Economist and discovered, to our surprise, that it wasn’t what they wanted.”
He says they came to realise that there was a distinction between what he calls the “lean-back, immersive, ritual pleasure” of reading the Economist in print compared to the “lean-forward, interactive” way people used the site.
It was, says Rashbass, the difference between “snacking on the net as against the gourmet meal of reading in print”. That convinced him and his team to offer an entirely different experience to website users. Rather than lecturing the audience, they set out to build a community of people eager to participate in discussions with the magazine’s journalists and with each other.
Then along came the e-readers and tablets. “We suddenly realised that if we were making a distinction between lean-back and lean-forward, here was lean-back digital or lean-back 2.0. We made a conscious choice to avoid the web-style interactive approach. Instead, we saw the potential of delivering a better lean-back experience than we have ever achieved in print.”
For the moment, of course, these three forms of leaning consumption will continue simultaneously. But Rashbass clearly expects the tablet platform to become the dominant form in future.
He stresses that the Economist should not be seen in terms of exceptionalism. “It is much more the case that we’re a manifestation of broader trends.”
A Pew Research study in the US has shown rising tablet usage, while the Economist’s own research reveals that 28% of its readers already own a tablet, with a further 23% expecting to own one within a year.
A survey among its US subscribers asked those aged over 40 how they read the Economist – more than 95% said they read it in print. But when asked how they expect to read it in two years’ time, the number expecting to do so in print fell to 35%. “I’ve never seen a statistic like it,” says Rashbass.
He is also convinced, on the basis of the rise in digital subscribers having had a relatively minor effect thus far on print sales, that there is little migration. The magazine is enlarging its audience.
He sees this as evidence of a phenomenon that he terms “the mega-trend of mass intelligence”. People are “smarting up” rather than “dumbing down”.
There are no longer elite media and mass media because more and more people are mixing and matching, “going to art-house movies and Spiderman”. People are no longer easily categorised.
He laughingly recalls a complaint by one of our literary treasures about long queues at the British Library reading room, saying “it’s access gone mad”. Rashbass sees it very positively, “as a wonderful shift happening in the world”.
He is altogether less enthusiastic about the great paywall debate. Although running an online subscription model himself, he believes both the Times, which charges for access, and the Guardian, which offers its content free, are “talking about the wrong thing, the transaction”.
He argues that the Guardian cannot hope to secure enough advertising revenue to create content through its traditional commissioning model, while the Times cannot attract subscribers who are one click away from free content elsewhere. Claiming that both loss-making papers survive by cross-subsidy, and therefore have the same business model, he argues, predictably, that he speaks from a unique position of business strength.
He says: “You always have to equate your model to the value you can extract compared to the cost of creating that value.” Is that, I wonder, a lean-back or lean-forward view?