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Regional press ‘must undergo more cuts to survive’

Regional newspapers will have to undergo further cuts and mergers if they are to survive, a report by a leading academic has claimed.

Francois Nel, director of the Journalism Leaders Programme at the University of Central Lancashire, has written a detailed study into innovation and integration in the regional press industry.

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.

15 comments

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  • April 24, 2013 at 8:40 am
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    Whether this is the only vision or not, who knows, but it seems very much common sense. Of course, cutting head count leads to diminishing quality, which leads to diminishing interest in the product, but how else can shrinking income be offset to maintain some profit and operation of the businesses for as long as possible? I still think the natural outcome is the end of news providers as we know it – apart from the immune and ridiculously protected BBC regional news output – and instead towns and even villages will be served by smaller, much more independent publishers. Personally, I don’t think that is a bad thing for the consumer but for current and aspiring journalists, it’s a different matter.

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  • April 24, 2013 at 8:48 am
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    Utter nonsense. Another academic talking out of his rear end.
    Why not just do away with journalism altogether? We get enough press releases to fill the space after all.
    Quality news is the only way to ‘save’ local journalism. That and maybe more independents replacing the clueless corporate owners who are wholly responsible for the mess we’re in

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  • April 24, 2013 at 9:10 am
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    “…deeper horizontal and vertical integration of organizations and operations…strategies that demonstrate greater lateral integration with the digital economy.”

    Glad to see Francois didn’t fall into the trap of churning out newspaper management-speak in his report, which I hear also arrived at the astonishing conclusion the Pope is in fact Catholic.

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  • April 24, 2013 at 9:35 am
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    … print advertising was down 57pc to £181.3m but digital revenues were up 36pc to £20.6m.
    Interesting how figures can be manipulated.
    Print advertising revenue is down because great chunks of it are used to subsidise digital to make it look good and perpetuate the online myth.

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  • April 24, 2013 at 10:26 am
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    Can we nail, once and for all, the canard that regional newspapers are not profitable. They ARE profitable – just not at the levels which their current owners want. The tragedy of the UK regional newspaper industry is that the plcs and conglomerates who run it are still expecting the high profit margins of “the good old days” and their only answer to achieving that is more cuts. These cuts meaner poorer products = less consumers. They are hastening the decline of local media because of their greed; pure and simple. Proper, private owners with a sense of community worth and who appreciate and value journalism’s contribution to it would be much better owners in the short, medium and long term. The real tragedy is that the ‘big boys’ fail to recognise it as they chase ever more unsustainable profit levels.

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  • April 24, 2013 at 10:49 am
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    Just to clarify: the report doesn’t advocate that publishers ‘must undergo more cuts to survive'; it simply observes that they are likely to do so.

    Having said that, I do indeed continue to advocate for some smarter thinking about digital revenue models. Simply transferring the print model (advertising and content sales) online hasn’t been enough. Ditto for editorial. And it never will be.

    So, where else is the money? Here are the slides I used in a presentation to the Society of Editors’ annual conference in 2009: http://www.slideshare.net/francoisnel/20089-data-from-where-else-is-the-money .

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  • April 24, 2013 at 11:00 am
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    “but digital revenues were up 36pc to £20.6m”

    What he doesn’t mention is that was only six per cent of total revenues at JP. Surely, if a great take-off in digital revenue is going to take place (enough to base the future of a company around) somebody, somewhere would have made it happen by now? The Internet is hardly a new phenomenon, after all.

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  • April 24, 2013 at 12:02 pm
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    You’re right, Kendo. Digital revenue still accounts for only a fraction of income at JP (and most other UK regional publishers). And (to modify Einstein) it would be madness for them to expect to get a different result if they keep doing the same things. And there are examples of success. Not least amongst whom is the Norwegian publisher Schipsted ASA who employ 7,800 people over 29 countries and just last year reported that 40% of their 15bn Norwegian krone (€2bn or $2.6bn.) income – and 69% of their EBITDA – came from online activities. As I’ve said repeatedly, news companies might be able to cut their way to profit (in the short to medium terms), but to grow they need to look beyond advertising and content sales to new revenue opportunities online – and off.

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  • April 24, 2013 at 12:15 pm
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    The answer is turning newspapers and their content into mobile-specific publications rather than just pdf-ing pages straight online. I firmly believe this will mean a career for talented page designers and photographers again after a 15-year decline in their fortunes.
    Reporters will have to re-nose their stories for different formats of course but, despite what the cynics say, your average Joe will eventually get sick of being lied to and cheated by the press officers of big corporations, government agencies and local authorities and will demand reliable, independent journalism once more – it’s just that by that stage, they will want it delivered to their smartphone so they can flick through it on the train, bus, while waiting for mates in the pub etc. just as they used to with printed newspapers about 900 years ago.

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  • April 24, 2013 at 1:42 pm
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    Always prefer to talk about the story rather than other comments but “the online myth” ???!!!

    Really? Are there still people out there in the industry who think the demand for online news and content is a “myth”?

    Some of the problems in the industry are right there with that comment. May as well have added “good old days” in there for good measure.

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  • April 24, 2013 at 2:50 pm
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    Many years ago, as an editorial executive, I recall lodging a complaint about something which affected the working conditions of journalists.
    The management response, relayed by an office flunkey, was: ‘Editorial doesn’t matter.’
    It was clear that the former ad reps and accounts clerks who were holding most of the senior management positions had no respect for, or understanding of, the role of editorial in newspapers. Their only priority was short-term returns for shareholders.
    The regional press is in decline because of very poor management. That is the beginning and end of the story.

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  • April 24, 2013 at 2:59 pm
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    My favourite comment from a clueless MD going back 20 years or so was “We have spent all these years thinking we are in the newspaper industry, but in fact we are in the advertising industry.”
    Cue editorial job cuts…..

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  • April 24, 2013 at 3:16 pm
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    Thanks for the reply, Francois. Curious though that you were unable to give an example from this country. It looks like many, many highly paid execs need to start earning their corn.

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  • April 24, 2013 at 3:34 pm
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    The problem with the vast majority of local newspaper websites is they aren’t very good. Little viable video content, badly written stories, dead links, loony comments, dire navigation, boring pics….thrown together as a bi- product by non specialists who have been cut to within an inch of their lives. Add to that the ad staff who are not web savvy and have no idea of the value of good editorial. Look how slick and user friendly the big media players are – Iplayer and sky sports to mention just two. Now try searching for something on your local paper site. It’s a joke. Can’t see why anyone would want to throw advertising revenue at it. Just not good enough.
    Agree with Dunkin over profit levels. I remember an md telling me that in the eyes of the company we had failed but if we were directors of a small local concern we would all be clapping each other on the back and holidaying in the Seychelles on the back of the profits we were making.

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  • May 1, 2013 at 1:40 pm
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    @ Mr T…talking about print ad revenue subsidising online ad revenue. Don’t most local news sites make more money now through Google AdSense banners etc, than anything reps would sell as a print/digital deal?

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