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Local papers – after the fall. By Roger Parry

A group of former editors, academics and commentators have come together to produce a major new book looking at the future of journalism entitled Last Words? How Can Journalism Survive the Decline of Print?

The book contains a number of chapters specifically focusing on the regional press industry and we are serialising some of these on HoldtheFrontPage this week.

In the second of our exclusive extracts, Roger Parry, chairman of Johnston Press from 2001-2009 and now chairman of polling company YouGov, looks at the question of whether local print media can survive.

He concludes that while the answer is yes, getting from where the industry is now to where it needs to be could prove a difficult journey.

rogerparryI had the educational and at times traumatic experience of being chairman of Johnston Press, one of the largest UK regional newspaper groups, for nine years. The first seven were wonderful. The last two, not so much. The combination of classified advertising migrating to the web and the UK financial crisis starting in 2007 wrecked the economics of the local newspaper industry and Johnston was in the vanguard of the losing battle.

A gold plated business model

As a corporate memento mori I have, on my office wall, a 2003 graphic, from investment bank Merrill Lynch, showing Johnston Press as one of the best performing media stocks in Europe for the second year in a row. In the late 90s and early 00s the local newspaper business was beloved by the investment community. Classified advertising was booming on the back of strong economic growth. In the glorious days before the great crash of 2007/8 GDP rose year after year by 3 or 4 per cent. Investors love monopolies and most local papers were, in effect, near monopolies. If you wanted to buy or sell a house or car, list or seek a job there was, in many places in the UK, only one game in town. The local paper. The local press managers called these three classified markets – property, motors and jobs – the ‘rivers of gold’. Local papers also benefited from another thing investors liked, the roll-up or industry consolidation. If a big company purchased a small one they enjoyed immediate and substantial benefits of scale, shared printing, purchasing, management and distribution. City investors lobbied for more and more such deals. Each acquisition was celebrated. Banks were willing to lend vast amounts to the local paper consolidation story. Corporate debts mounted. City analysts applauded. And share prices romped upwards.

Net Nemesis and Northern Rock

The assumption was it would all go on forever. By the early 2000s the web was hardly a hidden threat but it felt like someone else’s problem. The potential to utterly lay waste to the economics of local classified advertising was simply not understood by most people. Johnston’s stellar stock market performance in 2003 simply reflected the collective wisdom of investors and analysts. It would be three years before Rightmove would become a listed plc. Autotrader was still mainly a print business. Craig’s List was losing money and had less than 20 staff in a rented house in San Francisco. Google was still a private company building its search technology. Google Maps did not launch until 2005. Mark Zuckerberg was an undergraduate in his Harvard dorm. But less than ten years later the economics of Johnston Press and its industry was in ruins. The financial crisis – started in the UK by the collapse of Northern Rock in late 2007 was painful for all industries. For local newspapers, now feeling the full force of the internet, it was all but terminal.

Long term decline in readership

Local newspaper readership had been in decline since the 1950s. Radio, television and local free magazines had taken their toll, as had the much reduced sense of the importance of ‘my town’ to a new generation of commuters who lacked the deep community roots and interests of their forebears. But classified advertising defied circulation gravity. Classified was judged by evidence that it worked not by readership data. The local car dealer or estate agent was less worried about fancy metrics like reach, frequency, awareness and cost per thousand than simple proof of vehicles purchased and homes sold. Income from selling the papers themselves also had held up well. Buying ‘the local rag’ from the newsagent’s along with the cigarettes and lottery tickets was largely a function of habit and availability. As readership fell amongst the young, lured by other media, cover prices kept going up as older people with the local paper habit, like smokers and drinkers, showed remarkable price inelasticity.

Spiralling down

So it was all wonderful. Until it wasn’t. By 2008 the UK economy was in freefall and classified advertising with it. GDP dropped by more than six per cent a year at its worst moment. And to add to the pain of 2008 it was the year Google introduced the ability for small businesses in the UK to bid for advertising words and when Facebook opened its European business in Dublin. The future had arrived, at speed, at the worst possible moment in the business cycle. With less money in their pockets even those loyal older consumers suddenly found those cigarettes and lottery tickets a little more necessary to them than the local paper. It was the classic vicious circle. The heavy debts of the go-go years weighed down balance sheets. Pension liabilities, in what had been a traditional, unionised, high labour industry suddenly rocketed. Reduction in classified and sales income led to cuts in editorial budgets which led to reduced circulation, which led to cuts in display advertising which was linked to readership numbers.

The NUJ, not unreasonably but inaccurately, complained the industry was cost-cutting itself into oblivion by reducing editorial quality but the truth was more nuanced than this. The reality is that what most readers valued in their local newspaper was no so much the editorial content but access to their local market and services. People would buy the paper to see the cars for sale or the situations vacant or to indulge it a little light ‘property porn’ by checking out the value of their neighbours’ houses. The activities of the local council and local personalities were covered in the paper and enjoyed but they were far from the main reason for buying a copy. Research constantly showed very few people purchased a daily local paper every day. Many bought it only on the day it contained the classified advertising they wanted to access. It was true people loved seeing the professional photography, in the medium of newsprint, showcasing their kids’ school plays and sports victories but now they could go to Facebook and Instagram. It wasn’t a lack of good journalism that did for local papers. It was simply one of the main reasons for their traditional existence, classified advertising, had gone elsewhere.

Evolution not extinction

Students of media history enjoy the notion of Riepl’s Law. Wolfgang Riepl was the editor-in-chief of the venerable Nurnberger Zeitung (it is still going). In 1913, pondering the arrival of radio, cinema and recorded music, he proposed a law that newly invented media do not replace old ones but simply merge with and modify them (Parry, 2011: 364). The car replaced the horse because it did the same job but better. But of course horses are still around. For local newspapers Riepl is being proven correct. Local news, features and advertising still matter but the way people will get them has changed. The role of print in delivering them has to be modified. So is there a future. Yes. And in fact it is relatively easy to describe the business model most likely to work. But, for a traditional newspaper company it is very hard to get there from here.

Subscribers not Readers

In 2004, as the board of Johnston Press, we started to worry about the internet. We were proud of reaching six million weekly readers. I remember a presentation about how this audience reach was growing and a question being asked: “How many of those readers do we have names and addresses for?” It took a month for the answer to come back “about 400,000”. And therein lay the heart if the problem. Local papers in the UK simply did not know their customers. The purchase transaction, over the newsagent’s counter, was, for the most part, casual and cash-based. No credit cards. No registration involved. Google, by contrast, knew your name, email, post code and buying habits. Of course they would come up with a superior advertising model. It all seems so obvious now. But back then the huge financial success of the local press industry had not required it to it collect reader data.

A vibrant local media: Learn from the winners

The future of local media is a subscription-based relationship offering a multimedia solution. Work out what people will pay for, in terms of both content and format, and offer it to them. Easy to say. Hard to do. But what is clear is the daily publication, produced on newsprint and distributed by retail outlets is almost certainly not the answer. It just happens to be what the whole industry is set up to provide. There are many formulae proposed for saving local media. My solutions are influenced by having been chairman of a magazine publisher, which fared somewhat better in the digital revolution than a newspaper owner, and by working for many years in advertising agencies which are undergoing their own digital transformation.

* Learn from The Economist. It looks like a magazine but calls itself, and behaves like, a newspaper with a model built on subscribers paying for high quality, exclusive content. It deals with current events but it offers comment, analysis and opinions leaving breaking the news to others.

* Learn also from The Week and Private Eye again they deal with current events but do so with summaries, satire and comment. Again they are subscription businesses with very low cost production.

* Learn from the FT and The Wall Street Journal. Quality, targeted and exclusive content will encourage subscription. The print edition lends credibility, authority and lustre to the growing and more profitable digital offering.

* Learn from Evening Standard or City AM, quality journalism does matter. It means readers actually do actually read – so advertisers actually do value the medium. But don’t think you can go free in most markets. London is special.

* Learn from online publications like Huffington Post and Raconteur. Use digital media well with clean simple editorial and non- intrusive sponsored sections. Avoid the horrible user experience of flashing banners, pop-up videos and columns of clickbait that make such a mess of many local newspaper sites.

* Learn from Schibsted – the successful Scandinavian giant. In print they have achieved economies of scale through aggressive consolidation and near monopolies. Online they have highly functional market-leading classified services

Curation not creation

Local news is expensive to collect. It is far better if you can get enthusiastic and skilled local people to do it for nothing. And they will. In 2014 The Independent (Burrell, 2014) reported on an experiment by Johnston Press in Bourne, Lincolnshire, which resulted in 75 per cent of the content coming from amateur, unpaid, providers. Website traffic and print sales grew as a result. Professional journalists still have a vital role to play in commissioning and curating this material, and in taking the lead on investigations and campaigns. But a small group of skilled and experienced ‘hacks’ working across a group of papers in a region can orchestrate a huge amount of quality output. If presented with the opportunity, in the right way, people get a real satisfaction out of providing content (text, pictures and video) to their local paper. They are not being exploited. They are being recruited and involved. But the professionals have to make it happen.

Publish in all media and charge for access

Your content is local information but let your audience decide how they access it. The printed weekly, the website, Facebook, the smartphone. Your readers will use you the way they want to. Just make sure any material offered free is on a pathway to creating a loyal subscriber. ‘Free’ is a sample offer, it cannot be the whole service. Despite what some at The Guardian once thought there is simply not enough advertising, certainly on a local basis, to pay for a quality product. Local media has to be multi- media to deliver what the audience wants, and on subscription to pay the bills.

Don’t compete – complement

Type ‘plumber’ or ‘BMW 5 series’ into Google and you know why classified, in the traditional sense, is never coming back to your local paper. The result is instant, comprehensive and displayed on a map. But all is not lost. Local sites can thrive alongside the digital giants. People like and trust local reviews and recommendations. People also like features on home improvement and supplements on gardening. There is no reason why a large group of local papers cannot generate very high quality, exclusive syndicated content. One set of costs to serve hundreds of local titles, each, in effect, having an exclusive local offer. Jeremy Clarkson on motoring, Monty Don on gardening, Mary Berry on baking. Why not? Three million weekly readers reached through syndication across 200 local papers is just as good as a national publication.

And the future looks like….

The local ‘paper’ of the future probably won’t be on newsprint but will look far more like a magazine. Except in a very few major cities it will be weekly and the bulk of sales will be delivered to subscribers along with their groceries or by post. The paper will be just one manifestation of what the subscription buys. In the UK most local papers will be owned by just two or three companies or if they are independent will have very strong links with one of those companies. The competition authorities, who have done so much damage to the local press, need to get out of the way.

About a third of the editorial will be exclusive, high quality and syndicated. With the focus on home, gardens, cooking and lifestyle. This material will enjoy national distribution and will be linked with national display advertising. But will be experienced locally, on an exclusive basis, by local subscribers.  News will come from a small team of professional journalists organised on a regional basis serving a dozen or more titles with a network of largely unpaid stringers and correspondents at a local and micro-local level. These regional news centres will enjoy a contracted annual income from the BBC in return for which they will supply audio and video news material. The printed weekly will be in a way an artefact, an object to have around the house which affirms membership of, and interest in, a local community. The way that Vogue or Country Life enhance a dentist’s waiting room, or the FT and Wall Street Journal adorn an investment bank.

The weekly publication will not try to be particularly time-sensitive. Indeed the economics will depend of having many titles under common ownership spread across a six day week to allow the production teams to keep constantly busy. The root of local newspaper problems is they have been addressed from the viewpoint of the producer: “What should I do with my lovely factory full of, nearly new, Goss Universal presses, my fleet of vans and my classified sales team?” Better to start from the perspective of the subscriber who may well ask: “Where do I go to find out if they going to build a new bypass? Who can I get to fix my boiler? Where can I buy a good second hand car?”

So local print will not vanish but as Wolfgang Rielpl predicted, it will find a radically new role as part of a multi-media offering. Easy to describe but very, very hard to deliver if you start with a 200 years old local newspaper business and own all those expensive four-high towers and print works.

* Last Words? How Can Journalism Survive the Decline of Print? Edited by John Mair, Tor Clark, Neil Fowler, Raymond Snoddy and Richard Tait Abramis Academic Publishing Bury St Edmunds £19.95. January 2017. Available at special pre-publication price of £15 to HoldtheFrontPage readers from

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  • December 15, 2016 at 3:48 pm

    Roger Parry’s former employers Johnston Press should know all about the demise of the printed press. They were among the main assassins.

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