A former regional editor has questioned the prospects of a ‘digital rescue’ for the newspaper industry and concluded that readers will ultimately have to pay for journalism.
Keith Perch was editor of the Leicester Mercury until October 2011 and also edited the South Wales Echo and Derby Telegraph in the course of his regional press career.
Now a freelance consultant and part-time journalism lecturer, he also writes a blog focusing on journalism matters.
In a recent post, Keith says the way newspapers will survive will be to become what he calls “small, low cost, digital and print businesses.”
Arguing that digital revenues are unlikely to replace falling print revenues, he says figures from one regional publisher show it is gaining £1 in digital sales for every £21 in lost print sales.
He predicts that the end result will be some form of paywall and thus smaller audiences for regional newspaper websites.
Writes Keith: “Traditionally, news has been paid for by advertising, particularly classified advertising such as recruitment, property and motors.
“That’s not going to happen any more – classified advertising works better online than it does in print. And newspaper companies that think that they can build big online classified businesses are deluded.
“The best way to pay for journalism is for the reader to pay for it. In print, that means a much higher cover price. That, in turn, will mean a much smaller readership as far fewer people will value news at the higher price.
“Online, it means some form of paywall. But those who will not pay £1 (or £2 or whatever other price is needed) a day for a print package are not likely to pay £1 a day for a digital package either – news providers, particularly local news providers, are going to have to find a way to let people pay for what they want and nothing else.”
Keith goes on to argue that with smaller audiences will come different forms of newspaper ownership, with big publishing groups exiting the scene.
“Local news companies will be owned by small local businesses. There just won’t be enough money in them to make it worthwhile for large national or international businesses, especially for those with big debts.
“Renowned billionaire investor Warren Buffett recently said he expects a 10pc return on local newspapers he has bought, and that he expects that margin to reduce. If he’s right, and returns drop to below 10pc, it is difficult to see any large business with debt and head office costs, wanting to be part of the local media scene.
“If that happens, it seems to me that the most likely scenario is that more newspapers will close down, but will probably be replaced by much smaller, locally-owned businesses.”
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Fascinating article. It is possible to envisage the whole regional industry returning to how it was a century ago with individual owners, small operations and community owned and run products.
Not necessarily a bad thing..
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I agree with the first comment posted, it’s a good read. But I can see another scenario emerging, and that’s one where consumers just do without. If people can’t find the content they want online for free, I suspect a great many will simply shrug their shoulders and do without. Yes, it would mean they miss out and it would be a crying shame that people wouldn’t be prepared to pay for journalism but I think that a very real prospect.
The other issue is how you protect content that is hidden behind a paywall. If there’s some gossip about the local football club or a news story about the council, that news will get out and be available for free regardless of the efforts of the publisher to charge for access.
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How is going from larger operations to small operations ‘not necessarily a bad thing’ if you are trying to get a job? A tick for diversity at the cost of thousands of jobs equals a bad thing!
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I hope locally-run, independent papers are the future. I think many of them would be better off without the weight of the huge organisations which run them.
I left my job because I didn’t like the way the paper was being run by the bosses, but I’d go back tomorrow if it was taken over by someone who understood its value to the community.
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We normally do pay for news. It is called the cover price. The future of newspapers is to start charging full economic price for online services. If people really want a 24 x 7 service, they will pay good money. IBM has know this for years – and makes more profit from managing online services than it does from selling tin.
Do we really have to wait for The Grauniad to go bust in three years’ time before editors and publishers see the light?
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In my experience, locally-run independent papers don’t work either.
People certainly won’t be storming the pay-walls for ultra-local parish pump stuff and the advertising just isn’t there in print or online any more to pay for proper local journalism.
When was the last time you looked for a house or a car or even a plumber in your local paper or its website? Classifieds have fled elsewhere, national companies don’t advertise locally and there’s not enough locally-based advertising potential to make up the difference, especially in the current climate.
And as for bosses not understanding the value of papers to communities, they are not alone; even the people IN those communities don’t understand it.
It’s very sad, but newspapers have been declining all my (lengthy) career and we’ve all blamed everybody else; TV, radio, desktop publishing, council-run newspapers, the internet, citizen journalism, greedy proprietors, ageing, loyal readers being inconsiderate enough to die in droves . . . the list of excuses is endless
The hard fact is that the majority of our potential audiences won’t pay for what we do any more and we should stop kidding ourselves otherwise.
Maybe there’s a future for small co-operatives producing community websites and newsletters for peanuts, but I wouldn’t bet your redundancy on it.
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Sadly in my experience a lot of what Canute says rings true.
They may exist – but as micro-businesses – with small web teams to update sites with police press releases etc – but it won’t really serve any great journalistic purpose.
Can’t see much being published in newsprint within about 5 years. Some biggies ie nationals will go too.
Community news sites will continue as long as those updating them can be bothered – they’ll do good jobs, but won’t make a penny.
Things won’t be investigated, the voiceless won’t especially have a voice and so on.
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I take a Spartacist approach to the situation. Newspapers were created centuries ago for good reasons which remain to a large extent valid – both creating and responding to a better-educated population, giving a voice to the voiceless, reflecting the aspirations of the newly wealthy or the disenfranchised in the face of traditional conservative vested interests – but for a variety of reasons – growing affluence (the so-called classless society), the rise of unofficial media largely free from economic constraints and a collapse of public interest in politics at all levels, newspapers and their associated websites no longer have a reason to exist, either economically or socially. When it all falls to pieces, which it will, then something new will emerge from the rubble. We can argue over whether the current antics of JP, Local World, Trinity Mirror and their ilk are hastening or delaying that event, but they will not prevent it.
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