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Reach vows to fight ‘page view slowdown’ amid digital revenue slump

Jim Mullen 1Reach plc bosses have vowed to tackle what they call a “page view slowdown” after revealing a slump in digital revenue.

The publisher has issued a trading update this morning to coincide with its Annual General Meeting, which comes after the group implemented widespread cuts affecting hundreds of journalists.

The update showed a 5.9pc decrease in group revenue in the first four months of 2023 when compared with the same period last year, with digital revenue down 14.5pc year-on-year.

Print advertising revenue has also been hit and was down 19.2pc. while overall print revenue had dropped by 3pc. There was a slight boost for circulation revenue, which was up 2.1pc.

In the update, Reach blamed “recent changes to the way Facebook presents news content,” leading to a reduction in referral traffic across the sector, for the “page view slowdown”.

The group is promising to combat the slowdown with “strategic actions to address the decline in page views” as well as its forthcoming US expansion in the US and a reduction in operating costs.

During the period under review, Reach put 420 journalism roles at risk of redundancy with the goal of 192 editorial roles being cut from the workforce.

A number of senior editorial staff have since left the group, while the company says it expects to make reductions in costs of between 5pc and 6pc during 2023.

Reach chief executive Jim Mullen, pictured, described the start of the year as “very challenging” in an email to staff, which has been seen by HTFP.

He wrote: “We’ve had to make some extremely difficult decisions and our teams across the board have put in herculean efforts to ensure we put our business in the best possible position.

“So first and foremost I want to say thank you to you all for your relentless hard work, resilience and dedication. In particular I want to commend those who have been part of a consultation for professionalism during these difficult processes.

“In the update we’re sharing today, we’re seeing the challenges we’re facing reflected, but we’re also seeing positives, and confirmation that we’ve done what’s right by our business and its future.

“Overall, group revenue for the period is down 5.9pc on last year, which is in line with our planning and market expectations. Data-driven revenue continues to outperform, delivering against our KPIs.

“However our overall digital revenue is down 14.5pc; largely down to the factors I’ve discussed with you all openly – the impact of the macroeconomic environment on the entire digital market, and the effects of Facebook algorithm changes on our traffic.

“Print revenue has remained strong with volumes remaining robust and circulation revenue benefitting from cover price increases.

“Looking ahead, we’re not expecting a dramatic improvement in market conditions any time soon, but our Customer Value Strategy is working and will enable us to weather the storm.

“We’re delivering more relevant content to an increasingly registered and active audience. We have a strong action plan in place to tackle the pageview slowdown, a promising US expansion underway and brilliant journalism at our heart. We have a lot to look forward to at Reach.”

The National Union of Journalists has urged Reach to “look beyond the market firefighting going on” in the way the group addresses the decline in revenues.

Chris Morley, NUJ national Reach coordinator, said: “With hundreds of journalist roles being cut in recent months, today’s trading update from the company will provide no reassurance to staff that an upturn is round the corner.

“The NUJ will be taking its members’ views direct to the board inside today’s annual shareholders meeting in London. We will ensure senior executives and directors are reminded that they must be fair to all stakeholders.

“They must not lose sight of the value journalists bring to the company and that for the business to be sustainable, the board must nurture its journalistic talent and look beyond the market firefighting currently going on.

“That is why the NUJ will be raising the issue of rebuilding morale after mass job cuts, paying reasonable salaries against raging inflation, tackling the stress epidemic and the introduction of AI into mainstream journalism.”