Economist nears the limit of an old growth theory

http://www.theguardian.com/media/2015/jan/25/economist-nears-end-old-growth-theory

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You used to judge successful editors by a simple test. How many copies did they sell on day one, and how many on their last day in the chair? Plus, of course, parallel profit-and-loss figures. Today, the swirl of digital change makes everything more difficult. But put John Micklethwait’s nine years on top of the Economist to the ancestral test.

In 2006, when he took over, the Economist had a circulation of 1.1m and operating profit of £28m. This month, as his successor – Zanny Minton Beddoes, the magazine’s brilliant business affairs editor – picks up the baton, the figure is 1.6m, with an operating profit of £59m. Micklethwait – heading now to New York as editorial boss of Bloomberg News – isn’t the only Economist editor to leave on a high. To the contrary, the build has been steady, and remarkable, for decades: a true British triumph of judgment and style.

Who’d suppose that a weekly started in 1843 by a banker keen on corn law reform could reach such heights? Who, for that matter, could have guessed 50 years ago that a homegrown Economist, selling 30,000 or so, could scale such heights? Yesterday a modest office in St James’s Street; today a global player – all via the efforts of a bright, youngish staff churning out analysis that sometimes seems magisterial because it arrives with no names attached.

So Micklethwait departs full of honour, joining a New York gathering of British journalism talent over there that reflects great credit over here. Anna Wintour, Joanna Coles, Mark Thompson, Tina Brown, Will Lewis? But surely – for this is the Brit condition – there must be other, gloomy, factors we can get depressed about?

Perhaps. Profit has dipped 4% in the last 12 months. Digital growth, once initial bargain subscriptions have lapsed, seems to have stalled a little. Print advertising is having a familiarly rotten time. The curse of newsstand sales in America – fewer sites, fewer customers – is depressing one-off purchases. This is probably the peak of print circulation: the only way now is down. An 11% digital slice of the cake may still be good going by most standards, but it leaves many targets yet unreached. Nothing looks quite as problem-free as it did.

But the most fascinating long-term challenge is none of these things – because one of the biggest challengers will be Micklethwait himself, in his new Bloomberg role.

Economist ownership, in a way, is as idiosyncratic as its name. Half belongs to Pearson and thus the FT. (The weekly’s most famous CEO, Marjorie Scardino, went on to lead all of Pearson.) The other half is a scatter of holdings, many of them held by staff or trusties. Editors emerge from the ranks after decades of service, like Minton Beddoes. There’s a stately, internalised feel to the way the enterprise works.

But the looming threat lies in the shape of things to come: from Dow Jones, Thomson Reuters and Bloomberg. The more you go instant and online, the less you have a print life or personality. The more your judgments have to be made in a trice and beamed round the globe, the more you’re in competition with the giant, hugely resourced financial agencies, who can develop superb analysis and reporting of their own. The further away from print you stretch – into China, India and the rest – the bigger the risk of tearing success up by the roots, and sinking into political issues of the kind that have seen even book reviews being withdrawn.

Micklethwait has certainly made a significant, almost menacing, move (though doubtless he doesn’t see it that way). No need to panic. His old magazine has plenty of print life yet, to be sure: think the New Yorker or Private Eye, steaming serenely on. Zanny MB, the first female editor in a line 17 strong, has a fine inheritance. Her appointment makes its own bold statement. There’s a lot to look forward to. But exponential growth, on recent form, is a much tougher call. For success always means a new challenge to meet, not an easy season ticket to ride.

■ How would the National Audit Office rate a pantomime horse? Look for an answer as it lugubriously examines the BBC’s property portfolio and finds the new Broadcasting House – all those newsreaders aboard a weird QE2 – costing £89m a year. Too much, too little? Who can tell, since there’s no equivalent news hub anywhere in town? But we do know the NAO reports to the public accounts committee which bears down on the BBC Trust which tells the BBC exec board which marks the property division’s card before calling in more auditors – with the taxpayer and licence-fee payer funding the whole process every step of the way. Good headlines for BBC bashers; more headlines for Margaret Hodge and her committee. But rational decision-making in the public interest? Call for Widow Twankey …