Observing the Observer mess

And a little on Bluesky.

In short:

I remain sceptical about the long-term viability of Bluesky as a social media platform, for one simple reason. It is gaining a lot of traction – and generating a lot of noise – on the back of the fact that lots of journalists are currently using it. That’s fine: that’s something that keeps a platform central to the discourse, and was why Twitter always had an outsized impact within politics.

The simple problem is that, in order for Bluesky to grow in an organic way that creates a useful dynamic – congregation, as well as choir – it has to attract Joe Normal. And, put simply, journalists are addicted to micro-blogging but literally no-one else is (except, maybe, that queasy uncle with obsessively pro-European views). The rest of the world is addicted to watching 10-30 seconds of video and then scrolling to the next thing. That’s what TikTok is, that’s what Instagram is, it’s even what Twitter is now.

So Bluesky is serving a quite insular, niche addiction – and eventually the bods behind it will either decide that in order to become a bigger player it has to introduce doomscrollable video, or they’ll be happy to keep it within its self-contained audience, which will inhibit its utility. But I don’t see either pathway as having a particularly profitable conclusion.

Anyway, here I am.

In longer:

I wrote a long feature last week for The Independent about the rise (and rise) of a podcast company called Goalhanger. You can read it here. The company was founded by a team including Gary Lineker, the former England footballer and host of Match of the Day, Tony Pastor, a former controller of sport for ITV, and Jack Davenport, a Radio 5 Live producer. Together they started a small podcast company and a small podcast: The Rest is History. And, fittingly, the rest is, indeed, history, and doesn’t require repeating here.

During the course of an interview that I was conducting with Davenport for the piece, I brought up the mooted acquisition of The Observer newspaper by the new media start-up, Tortoise. I asked him whether Goalhanger – which has achieved a level of success that I think Tortoise would still be very jealous of – might do something similar. Maybe they could resurrect Punch? Perhaps they could make a bid for the New Statesman? Here’s what I wrote in that piece:

Yet 2024 is already proving to be the year that podcasting exited its lane. Recent weeks have seen staff strikes and top columnist resignations at the venerable Observer newspaper, in protest at a purported sale to audio start-up Tortoise (which plays on a similar field to Goalhanger, to a smaller audience). Has anyone at Goalhanger talked about a similar shift towards print? The Rest Is Ink And Paper? “Why would we need to?” Davenport responds. “Maybe this is a failure of imagination on my part. Why can’t we create something new?” On Tortoise’s takeover attempt, Davenport’s word of choice is “ambitious”, accompanied by a wry chuckle.

Because I work in audio but have done so for a couple of magazines, as well as being a journalist who has written for a number of print titles, and is a critic for The Independent, a few people have asked me to unriddle this deal between The Observer and Tortoise Media. Which I do so, now, without any insider knowledge (though I did overhear a bloke on the train, who was clearly an Observer staffer, discussing the situation).

The first thing to address is the apparent asymmetry of the deal. The Observer is, after all, a venerable title, dating back to 1791, which makes it the world’s oldest Sunday newspaper. Tortoise, conversely, is a new media start-up, founded in 2018, which has yet to turn a profit. The Observer became part of the Guardian group in 1993, allowing the Guardian Media Group (GMG) to run as a 7-day brand. Tortoise, meanwhile, has pivoted to an audio-first dynamic, to mixed success. So, on the face of this, it feels like a rare example of a smaller lesser known brand acquiring a bigger, better known one. This could be a so-called backflip takeover, where the acquiring party becomes a subsidiary of its target, but it feels more complex than that.

I think things feel simpler if you rename Tortoise Media as Tortoise Capital. After all, former BBC bod James Harding has already done a miraculous job of fund-raising for his slow news project. Tortoise acquired venture capital backing in its original round, which is practically unheard of for a content business, especially one engaged in slow, meticulous, current affairs programming. He was assisted, at the beginning, by Matthew Barzun, a former American ambassador to the UK who served as Barack Obama’s (hugely successful) fundraising supremo in 2008, and Katie Vanneck-Smith, a former president of Dow Jones. Together they managed to put together a significant funding package for a site that was conspicuously not trying to reinvent the wheel – rather, it was trying to slow it down.

My assumption would be that the bid by Harding & Co to take control of The Observer represents another vote of confidence in Harding, from the people who backed him to make a profitable media business with Tortoise. A figure of £20m has been mooted for investment in the newsroom (crucially, most of the plans at this stage involve the Scott Trust, the current owners, retaining a stake, which might negate the need to rebuild corporate infrastructure from scratch). The bid has been described, by insiders leaking to the anti camp, as “under financed” which seems reasonable, given the figures quoted. Yet the Scott Trust seem keen to a) offload the asset, and b) sell to Tortoise. No other bidders are, at present, being considered.

EXT – SUN SETS.

EXT – SUN RISES.

It’s taken me so long to write this newsletter that the story has, quite fundamentally, changed in the days between me starting and where we are now. Firstly, there’s the emergence of a second bidder, energy industrialist and Forest Green Rovers chairman, Dale Vince. Vince has thrown his hat – and wallet – into the ring, but it remains to be seen whether the Scott Trust would entertain a bid from his consortium. It seems quite unlikely, to me, given the caution they seem to have exercised over non-media folk.

And then there are the staff at Observer/Guardian who have published a series of concerns about the deal, along with a strike threat. Their main objection seems to be a general exclusion from the consultation process (bear in mind that the Guardian staff are used to electing their editor). But other substantive concerns are:

• That the site will go behind a paywall.

• That other bids are not being entertained.

• That the relationship with GMG is important.

• That Tortoise is loss-making.

• That Tortoise’s proposed investment is measly.

• That it will “diminish” the Guardian and pose “an existential threat” to the Observer.

I’m not going to go into a point-for-point discussion of these concerns, not least because I don’t want to start rebutting them like I’m Scrooge from before his cathartic nightmares. The problem seems to descend from the fact that in the 30-odd years that have passed since 1993, the Observer has become closely knitted into the fabric of the Guardian. Within HQ at King’s Place, they feel like one continuous publication. It is a classic dynamic of Sunday papers – like The Sunday Times or The Sunday Telegraph – which have separate editorial teams but a shared brand identity.

But internally, I suspect there is a desire to continue cutting the costs of print overheads, and moving to a single weekend edition is one, obvious, way of doing that. Additionally, the Observer’s digital presence is, at present, conflated with the Guardian. This means it’s basically valueless, digitally. The Guardian and Observer have withdrawn from the ABC circulation figures, so it’s hard to know quite how much of a crisis print sales are in, but projections, from Press Gazette, put average readership of the Observer at somewhere around 80,000. That figure makes it hard to produce a very strong argument in favour of retaining the separate newsroom, rather than bulking out the Saturday Guardian into Guardian Weekend, and challenging the FT for the weekend newspaper slot.

This story is going to rumble on – as the sorry tale of the Telegraph’s sale has – become it is apparently very difficult to buy a British newspaper. I would share a lot of the concerns that Observer staff have about the level of funding required to make a fist of the title as a standalone project. I would expect that the investment costs required to entirely disaffiliate from the Guardian, and produce competitive verticals across the multimedia landscape, would be closer to £100m than £20m. It is, after all, not much different to creating a start-up – albeit one which already has a well-heeled, three-figure workforce.

At the same time, once you become seen as a distressed asset, it’s very hard to row back from that. And I do think more journalists ought to see just how rough the commercial side of the business is right now. The slogan of the Observer strikers is “democracy dies behind paywalls”, a play on the famous Washington Post tagline “democracy dies in darkness.” But the WaPo has one of the richest men in the world as its munificent leader… and yet still has a paywall. The truth is that the greatest threat to democracy is a failing media, and the greatest threat to the media is a business plan that does not involve a revenue column.