The Independent is to cease print operations and face a wholly digital future – is this the beginning of the end for the print newspaper sector, asks media analyst Alex DeGroote.
The closure of the print versions of the Independent, due at the end of March, is very sad but not unexpected. Circulation – or copy sales – are now down in the low 40k volumes. From a peak of 400k daily. And print advertising trends are very weak, in part following the volume declines.
According to Companies House accounts, Independent Print Limited has been losing millions annually in recent years. It looks like there was no way forward for a commercially viable print Independent. In addition, we are firmly in the age of the mobile and tablet.
However, the story is not that simple.
The surrogate children of the Independent will live on. The i has been a success by any account, and makes around £5 million profit as a standalone. Johnston Press is now acquiring the i for £24m, and the online only version of the Independent will continue too, under the ownership of ESI.
Whilst it is easy to focus on the bad news, the spirit of the Independent should endure, albeit in diluted form. There will be job losses overall, but at the same time we are led to believe new roles are being created, albeit not in conventional print journalism.
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Johnston Press’ motives for the deal are interesting. The i is a national print product, with little digital revenue. Johnston Press is at heart a regional publisher, on a digital mission.
Likewise, Johnston Press is in weak financial shape, with £190m+ of debt after this deal. Until a week ago, we saw Johnston Press as a seller of assets, now it seems to be a consolidator. If the i can be integrated, it could yet strengthen Johnston Press’ national sell to advertisers.
There also appears to be a demographic fit with Johnston Press’ target of affluent mid-lifers. At the same time, the national newspaper market is a fiercely competitive space, with some publishers with deep pockets. Think DMGT, Trinity, News UK. We wish Johnston Press and the i all the very best against this lot.
So the question for the print newspaper sector is now: is this the beginning of the end?
The answer is yes, and no.
I would expect both the Guardian and the Financial Times to follow suit in the medium term, albeit it should be clear that Nikkei has not spent £800m to run the FT into the ground.
The Daily Telegraph is rumoured to be on the block too. And a change of ownership could change the commitment to print there.
For the red tops, the circulation volumes are much larger and the likes of DMGT, publisher of the Daily Mail, are still making millions of profit. For them, the online question is kicked further down the road.
We will all feel nostalgic and sad for the closure of the print Independent. Many great columnists and journalists – Andrew Marr, Robert Fisk, Stephen Glover et al – have cut their teeth at the Indy. Its challenging and pioneering role will not be forgotten, however. And its surrogate children live on, at least in the medium term.
Alex DeGroote is a media analyst at Peel Hunt.
