Regional newspapers will have to undergo further cuts and mergers if they are to survive, a report by a leading academic has claimed.
In his report published yesterday, he says that there will need to be further industry cconsolidation and also more focus on the digital economy, particularly in terms of mobile access to news.
Looking in detail at the major restructuring carried out by publishers Johnston Press and Trinity Mirror over recent years, he says they have “heeded the call” to fight back against the challenges facing the industry by cutting costs and reconfiguring operations.
Francois writes: “Local newspaper publishers have been busy. But, through whichever lens one chooses to look, the results have been uneven. And formidable challenges remain – particularly as audiences shift their access to digital media from PCs to mobiles.
“This study concludes that if the British regional newspapers companies are to survive and thrive, they will need to have the energy and skill to ‘dance’ – and enough willing partners to join them.
“That is likely to require not only deeper horizontal and vertical integration of organizations and operations (read: more cuts), but also strategies that demonstrate greater lateral integration with the digital economy.”
He predicts that this will include further merging of newsrooms, printers and distribution, which would allow costs to be cut by using the same staff and equipment to produce a range of similar products.
In the study, Francois looks in detail at Johnston Press chief executive Ashley Highfield’s transformation plans for the company, which include increasing the proportion of digital income from 5pc to 50pc by 2020.
He says: “Arguably, however, one of the most formidable challenges to the sector’s ability to create value is the shift in consumers’ digital media access from PCs to mobile – which Highfeld’s strategy highlighted as the key growth channel for Johnston Press.
“Consider: if income from news websites is 10pc of that from printed newspapers (in 2012 digital revenues at both Trinity Mirror and Johnston Press accounted for 6pc of overall income), average revenue per user from mobile sites and apps is often only a fraction of that of news websites.”
He also compares Johnston Press’ annual reports from 2007 and 2012 and notes that in in the five years, the number of full-time journalists was down 44pc from 2,774 to 1,558, print advertising was down 57pc to £181.3m but digital revenues were up 36pc to £20.6m.
The report says JP has announced plans to make further cuts of £25m in 2013, although there would not be the steep cut in headcount seen in 2012.
It also highlights the changes undergone at Trinity Mirror in its Newsroom 3.0 model, focusing on the Liverpool Post, and said it had effectively created a “Trinity Mirror news agency” where a story by one of its journalist was available to anyone in the company.
Francois said the move had led to journalists having greater responsibility for quality assurance by writing stories directly onto pages and the role of multimedia production journalists had been created to combine the roles of news editors with sub-editors.
The full report can be viewed here.