The long-term health of the regional press will be in jeopardy unless newspaper ownership laws are reformed, industry chief executives were told at the Newspaper Society’s Senior Management Forum in London.
Tim Bowdler, chief executive of Johnston Press plc and chairman of the Newspaper Society’s media ownership working party, said: “There is an overwhelming need for change in the media ownership regime which originated in the radically different media environment of the 1960s.”
At that time, there were very few free newspapers, only two television stations, no commercial radio, no teletext, no Internet and virtual immunity from foreign competition.
He continued: “The present system regulates the ownership of ‘traditional media’, and especially regional and local newspapers, in a prescriptive, unfair and outdated manner. The result is that the sector’s ability to compete and develop is seriously inhibited. This will ultimately put in jeopardy our ability to provide the local editorial voices which the current regulations are meant to protect.”
Mr Bowdler said regulators had failed to fully appreciate the impact of the burgeoning number of alternatives available to all advertisers, including small businesses and private individuals.
He said: “The quiet rural roads of the 1960s regional press have changed beyond recognition to become the multi-laned multi-media highways of the current era. Even for those of us who work in the industry, the pace of change is sometimes bewildering. How much more so for the regulators.”
Mr Bowdler commented on the relative ease with which the AOL/Time Warner merger was achieved and said it contrasted starkly with the regulations facing the UK regional press. He said Johnston Press had to seek prior approval to acquire the Arbroath Herald and the Broughty Ferry, Carnoustie and Monifieth Guide and Gazette, with a combined circulation of some 10,000 copies and no overlap whatsover. Yet the same system would permit AOL/Time Warner, or even Fidel Castro, to acquire Johnston Press without regulatory intervention, he said.
But, he said, the regional press was not only suffering delay and inconvenience because of the present system. Some deals were abandoned because of the potential damage of a lengthy inquiry and uncertain regulatory outcome. Publishers even faced the prospect of political intervention, as in the Trinity Mirror merger.
The regional press was still a highly fragmented industry, he said. In other media sectors – such as magazines, cable television, radio and terrestrial TV – a maximum of three or four players tended to hold 80 to 90 per cent of the market and were not subject to the same controls as the regional press.
The modest consolidation that had already taken place had helped to sustain a vigorous, well-resourced and effective regional press, supporting a heavy investment in journalism. But to be financially viable, this investment was dependent upon continued high local circulations and household penetrations and healthy advertising revenues, he added.
“The newspaper industry must be allowed to evolve and respond in this era of convergence without the restraints imposed by the current ownership regulations. If we are not given this freedom then our industry will suffer the consequences of competitive disadvantage, putting at risk the long-term health of the regional press.”
The Newspaper Society’s media ownership working party has commissioned NERA (National Economic Research Associates) to independently assess the impact of the current regulations and recommend changes.Bowdler said he was confident that NERA would recommend that change to the current legislation was essential – and essential now.
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