Page 2 of 2

He said in his report that newspapers had been slow in coming to terms with competition from the Internet, while "sharp" declines in readership in recent years had gone hand-in-hand with a loss of commercial revenues to the web.

Nevertheless, the impact on smaller papers would be minimal: "The BBC's decision to base its multi-media operations in locations where it already offers bi-media services avoids direct competition with weekly papers, the healthiest branch of the newspaper tree, usually serving communities which are a sub-set of the BBC's local areas."

Based on recently published circulation figures, he said the six pilot local TV services in the West Midlands had no statistically significant impact on newspaper circulation figures in the region.

Local daily evening paper circulation had a "terrible six months", he added, especially the Birmingham Post and Mail. Local weeklies held up better. But the overall picture showed no significant differences between the West Midlands and the UK as a whole.

In Hull, the Mail was worried about online BBC services, but Prof Laughton allayed fears in his report.

"Over a 12-year period, from 1994 to 2006, the Hull Daily Mail's circulation declined at a slower rate than the average decline in local evening paper circulation across the UK.

"The reasons for this out-performance surely include the under-performance of other competitors for revenue, like Calendar. But they are most likely to reflect the Mail's own determination to build its brand and protect its territory by investing in people, resources and innovation.

"For example, the Mail has one of the most impressive websites of any local paper in Britain, driven by a determined editor and an impressive management team.

"It provides local video news items on its website, one of the handful of local news publishers to take the step. The stories report a more compact catchment area than Look North, and their quality is good. Online, the Mail generates more hits than the BBC's local Where I Live site."

And yet he realises the strides forward being made by newspapers: "Most regional newspaper groups have also now announced significant investment in creating and delivering local content.

"Johnston Press has established a multi-media newsroom at Preston. Associated Newspaper's digital division has announced plans to launch a number of 'hyperlocal' community news websites.

"ITV Local has been piloted in the Meridian region.

"2007 looks like being an even busier year for local commercial media launches, especially online."

He cited a number of regional success stories, including GMG's Channel M in Manchester, which with a staff of more than 100, he thinks is an "ambitious and risky venture".

And he said that strengths of the pilot included: