good morning everyone never thought I'd be one of these people standing up with a jacket and jeans aren't those sort of CEOs that wear the suit jackets and the jeans to try and look cool it's a bit creepy isn't it when they do that but I'm it's not a suit jacket which I think looks terrible the way Ballmer wears it with the black shoes to try and look like he works for Apple it's it's horrible so this is about as cool as I get I'm afraid I'm from old-school media and I'm going to explain to you why I still think it's relevant and what we do is important but I want to talk about user engagement today that is the link to the intersection bit of the blurb at the top of your invitation answer the question I was always told I'm old-school like that as well so let's start at the beginning most academics now agree that unlike Frank Sinatra's when I was 17 or young Theory intermediation one's life is actually determined by newspapers you pee into them and chew them when you're very little and you're announced in them you get you read the comics you cram with them when you go through university your death is announced in them at the end you sleep under them like my father does but sociologists now agree that the pivotal point in your life moving from young to old is the first time you write into a newspaper that is the moment where you are declared old how many of you and I'm not talking about comments have written or emailed to an old-style newspaper theory is absolutely bang-on that's why it is important user engagement is important and user engagement has always been important to newspapers and in a quite a modern context as well in the 1700s in the u.s. up in New England The Jeffersons and Hamilton's founding fathers of these world would regularly write to New England papers under pseudonyms they wouldn't even write under their own names people would write in opposite views would come into the newspaper newspapers all understood the value of reader comment we have always understood that but there are very few ways you could actually interact with a newspaper you could only really write in and today you might get a column in an op-ed piece if you are a distinguished person occasionally we would allow sort of funny notes or funny letters to come into the newspaper or you'd get the ranting letter and we still get ranting letters and we enjoy putting those in the paper as well but the avenues of engagement with newspapers was fairly narrow that has all changed newspapers and the media the news media in particular are obsessed with what you think right in what do you think contact us have your say all the rest of it it has exploded in the last well under 10 years actually it's a relatively recent phenomenon it actually started by the the Colorado newspaper in as recently as 2006 they said you can write into the restaurant section or write in to our film section 2007 The Washington Post started to allow comments but only on the sports section 2008 The Wall Street and the New York Times allowed a few comments The Guardian in the UK 2006 it's not you know it's a relatively recent idea of allowing people to post comments directly under news stories of course it's been around in radio for a long time the BBC from 1968 had talk shows and phone in programs other media like TVs with Vox pops have done it for a long time but newspapers were quite slow to this idea whether it was journalists trying to protect their patch or feeling high-and-mighty or whatever but it's relatively recent now we know what's causing it of course it is the rise of the Internet changing technology and you can see from this slide that this was a questionnaire that the Pew Institute does regularly in the US and I use that because it's got the longest data I can find and it asks this question on the right every year it asks Americans where do they get their news from you can see that TV is slowly trending downwards you can see that people get fewer and fewer news from newspapers with that occurred a long time before the advent of the internet and then you can see this relatively recent explosion in Internet news reading by the public and indeed for under 30 year olds those two lines have crossed now in most parts of the world under 30 year olds get more news from the internet than they do from the TV and most people expect that line those two lines to cross for the rest of us in the near future this slide is also very painful for us and very difficult to manage in the newspaper business because it's still a fact that ads in newspapers are ten times more profitable or we generate 10 times the ad revenue from papers as we do from online there are almost two irreconcilable trends we know this is going on but papers are still far more profitable than online ads for us the other trend that's making this easier is the move to mobile Mobile is becoming more and more important I can't believe people want to read newspapers on their phones and on iPads but they do it's been very successful for us this is the FT you can see now from the blue line that we're getting up to 40 odd percent of people reading on mobile devices it won't also be surprising to you that they tend to read them on mobile in the mornings and the evenings when they're commuting in and they flip to ft.com during the day that's the sort of rough movement of readership for our paper so people can now comment from any old place the toilet the bus and they do why do they do that it's must be an inherent desire in man and we all know the types of people we're talking about but there seems to be a constant number of people on planet earth that want to tell you something and they want everybody else to know it as well and companies like Twitter survive of course because there are a fixed number of humans that think that the entire world is really interested in what they've got to say about a whole bunch of topics so this rise of user engagement is not a change in demand I'm going to assume as far as I'm concerned that is fairly constant with this very scientific and rigorous chart so we know that it's the supply side and we've caused this to happen we control the web we're allowed to do whatever we want we have asked you to comment and here's a typical BBC website I mean just look at it they're asking for your view on every little part of this site in the small print in the big print have your say here write into us what do you think bla bla bla we have asked for this change to happen and indeed it's become embedded in so many websites here's the Guardian website and you can see that before they even link stories to the main headlines they're boasting about the comments underneath each story as if to say please read this story it's got more comments there's 1600 experts on what's happening in Boston right there for you but I put up this slide to show you that we are now promoting comments as an important part of the news agenda for our readers here is CNN and said well you know grab yourself a camera send go out do a few interviews send it in we can actually cut costs it's a really good idea why don't you do our reporting for us so it's gone to an extreme in some cases now and this is the another of my speech this has led to editors saying why don't the journalists start commenting back why don't you get involved in the conversation we have thousands and millions of people writing in why don't we get involved let's get a discussion going here and this happens in a couple of ways the most common one is to embed your comments into comment chains and we have message boards that we get involved with blogs in particular and in the FT at least we have armies of people sending tweets out pickled tweets right tweets out to readers markets editor for example racks up about 20 of these an hour there are various ways now we are told to do it we have been told by our to get more involved I know and then there was a review of American journalists 2000 journalists were interviewed about 50 percent of them now in the u.s. say they contact readers in some form or another email or in the comments section or whatever and about 20 percent of them a lower number say they contact readers about their own article and that that proportion is growing fairly quickly why have we been forced to start communicating with our readers obviously and rarely I would add our bosses are actually thinking commercially and they believe that this will help our bottom line if you run a subscription model like we do at the FT like The Economist does the idea is obviously to promote loyalty to attract people to subscribe to stop people from cancelling their subscription and there's an idea that if you build community and some loyalty and some fun into the interaction that readers will stay engaged if you have an advertising model however and as I showed you on that previous slide or I told you advertising is still by far the most important revenue stream for most of our newspapers it's simply about eyeballs it's getting people onto the site so our commercial department can go to advertising companies and say please can we charge X now both of these reasons are unproven I let you know at this point and but they that is the logic behind both of these trends now to my mind there are three risks up until this point this is everyone believes this across the newspaper industry everyone believes this is the right way to go I personally believe that there are three huge risks here the first is brand dilution this manifests itself in a few ways firstly it's the big problem that lots of comments are frankly awful rude racist bigoted the New York Times was absolutely shocked when it first allowed comments on they couldn't believe it actually took it down for a short while I mean many of you may have seen the comments during the Boston crisis a couple of weeks ago I mean the comments that went up there in the first couple of hours were extraordinary is there a link between our readers reading these comments and their feeling towards us as a newspaper or us as a new news organization this hasn't been tested then there's the idea that what the readers think when they see a whole bunch of worthwhile comments next to our journalists article is the journalism being degraded the people begin to think less highly of a journalist if they see a fantastic comment underneath that makes a mockery of their story perhaps the idea of the reverence that the journalist is being held is being degraded then there's that time in the effort the Huffington Post has 30 full-time comment moderators working 24 hours a day reading a hundred comments per hour each an extraordinary amount of resources we at the FT who are as Luddite as you could imagine we have now got a team of five and many people are spending a proportion of their day dealing with this stuff it takes time it chews up time and the final point is the one of mystique the more you contact people the more you interact with them the less mysterious you are the less people want to hear you this is very important concept this is for those of you the economic scarcity value this I think is totally under played and very under explored the second point I would make is that very few people are actually commenting you've heard of the 99 one rule in social communities 90% of comment people just read them 9% participate a bit most of them come from 1% of the of the readers it's actually worse than this The Guardian let's slip once that it has six hundred thousand comments a month two thousand six hundred of those comments come from 40 people back of an envelope calculation they have 70 million readers a month so comment represents under 1% of all people participating in The Guardian website we assume that everybody loves this but there's a gigantic number of people out there who have nothing to do with the comment arena at all and maybe being annoyed with people commenting the third point is that sometimes I'm sure people think why do they let these comments on here is that some here is the CNN asking for comment on acquaintances wonder whether one great brother brainwashed the other ones lying in hospital the others dead while somebody sitting in Omaha know anything about whether one rather brainwashed the other you just don't know they ask these questions for comments all the time do you think the trajectory of the moon landing rocket at 33 degrees is going to I don't know no one knows you should ask a rocket scientist no 20,000 comments under that one I think this is this is a problem the third problem I would raise is just one of volume this is the incredible Huffington Post now receives 70 million comments a year they just can't get through them and the problem for even people who are interested in commentary is you can no longer find the comments that you're interested in Lex is different there are parts people who still believe that we're going to tell you what you think we have no interest in what you think in return we're smarter than you we do more analysis than you we we are above the chatter we're above the noise everyone else is wrong and we are right now we don't necessarily have to believe this but if we can give you this impression and keep this as our philosophy I believe that one of the reasons why Alexis survived 80 years is this authoritative feel to the column makes people want to read it Martin wolf our economist has no interested in what you guys have to think I asked him once whether he has a Twitter account he said certainly not David Bowie he's never cared about anyone thinks Warren Buffett doesn't care what any of you think a lot of companies that have been very successful and I would pull some of these out here McKinsey business model hasn't changed in a hundred years do they care what the public think No they charge a lot of money to keep their IC secret and to a selective number of people content is the important thing content is king there was a very there's another study done of about 10,000 readers and the hypothesis was that people read articles when they have a personal involvement when they are interested in it it actually showed that they're all interested in novelty content interest analysis there is still a demand out there for these traditional things and they never go away other things come and go content doesn't and the final philosophical and political point it may be the case and people have shown this in studies that deliberation helps the Democrat democratic process citizenry involvement in discussion does lead to good outcomes it does lead to good involvement and an aware public but it doesn't mean that it is a good business model for newspapers nor does it mean it's a good business model or a good model for yourself don't forget the importance of scarcity value don't forget the importance of the fundamentals in journalism and I rest my case you