Is there no good news on the local and regional press?
Raymond Snoddy says the picture is not entirely bleak but it really helps when those owning and running local and regional newspapers actually believe in their future…
Was it only five years ago that former Johnston Press chief executive Tim Bowdler was horrified to be told that his 35% profit margins were unsustainable in the internet age.
Bowdler appeared hurt when it was suggested that he would have to get used to a mere 25% that the existing local advertising monopolies could not hold.
In the face of the recession and the migration of classified to the web such apparently “pessimistic” forecasts now seem for most regional newspaper owners like a dream from a lost age.
The latest news from the Daily Mail & General Trust this week that its local arm Northcliffe is once again effectively on the block in some form will spread a little more gloom throughout the seriously challenged industry.
No official numbers were ever given but it was widely believed that Northcliffe was for sale in 2005 if anyone had produced a bid in the £1.2 billion to £1.6 billion range.
When the bids came in, it is believed, a long way short of £1 billion, DMGT decided to soldier on with Northcliffe.
Now DMGT is saying it is “open to any worthwhile approaches” concerning consolidation while making clear it is not interested in leading that consolidation itself. It has better things to do with its investment money.
Consolidation is clearly in the air and the government is at least sympathetic to removing some of the more stringent competition requirements in local media markets.
Sly Bailey at Trinity Mirror late last year approached Mecom, the continental European newspaper group created by David Montgomery, with talk of a merger.
The approach was rebuffed because it was a “nil premium” merger. The Mecom board was not interested in such terms.
Now DMGT has set new hares running in the consolidation stakes. At the very least it is unlikely that the owners of the Daily Mail are going to invest much new capital in Northcliffe whatever happens.
The biggest question of all is whether consolidation is the answer to an industry’s prayer – other than squeezing profits out of a slowing dying business?
Usually consolidation is a management speak euphemism for slashing costs and sacking people, often with scant regard for the quality of the editorial product that results.
Is there no good news on the local and regional press?
Actually some can be found right under Northcliffe’s nose, in the shape of the Aberdeen Press and Journal – one of its own.
At last year’s Society of Editors conference retiring Journal editor Derek Tucker spoke passionately about the power of traditional reporting, which had made the paper the third largest selling regional in Britain compared with 13th a decade ago.
Most days the Press and Journal has 12 reporters covering local courts, two staff at the Scottish Parliament and one at Westminster. All local council and committees are covered and the number of editions has been increased to eight a day – the equivalent of 100 broadsheet pages.
To some extent Aberdeen may be a special case because of its relative isolation and strong community spirit but it is unlikely that its relative success is a total coincidence.
But the fact remains that in recent years most papers in consolidated groups have been heading in the exact opposite direction.
Can it be the best possible strategy is the most obvious of all – that local papers should be truly local in a way that competing media would find it difficult to replicate?
It certainly works for Sir Ray Tindle’s 150-strong chain of small local weeklies. Tindle Newspapers just keeps buying titles and if local papers in rural areas prefer agricultural ads on the front page that is what they get.
And Mecom’s profits have been rising, after a torrid time in the recession, on the back of localness everywhere from Norway and Denmark to the Netherlands and Poland.
Indeed Montgomery reports that in some of the company’s Norwegian titles the penetration reaches 100% of households.
Some of the Mecom papers have even stopped carrying national and international news and concentrated entirely on local news.
One Mecom title has dropped sport from the printed edition and made sports coverage an online service – not something that would work in the UK.
So the picture is not entirely bleak but it really helps when those owning and running local and regional newspapers actually believe in their future.
It would also be good if more people came out and argued the case in public for the future of newspapers, local and regional as well as national.
David Montgomery may turn out to be such a person. He believes in the long-term future of newspapers – but papers that have re-invented themselves and organised much more flexibly than they are at the moment, with a greater willingness to experiment.
Ousted as chief executive of Mecom last month, even though the company had met all its recent targets, Montgomery is already looking for new opportunities in the industry.
He will probably resume his wandering around Europe where subscription levels to newspapers remain high and where often there are obvious costs to remove.
Montgomery’s relentless Ulster focus may not be to all tastes but he is a true believer in the future of print and the initial creation of Mecom was, by any standards, a great achievement.
Might he be tempted back to the UK market to play a role in the inevitable consolidation that will now gather pace and put into practice some of the lessons learnt the hard way in Europe? Too early to say but the 62-year-old former chief executive of the Mirror Group is determined to stay in the newspaper industry.
Your Comments
Newspapers can survive if they fight back and give classified advertisers what they want with a little bit of what papers need.
It is now possible to link a newspaper classified ad to extra internet content without any fancy codes so that advertisers can add extra content and pictures, which is what they get from eBay and craigslist et al.
Using the printed classifieds as a low tech search option with the new quick internet links for buyers wanting extra information will give those who are abandoning print for their personal advertising a new option that the papers can get their teeth into for a fight back.
And if this model can be extended to local retailers to list their inventory through print classifieds and then on to the net there will be more than enough for local papers to bite on.
The major problem with local newspapers is that, basically, they aren’t! One free-sheet which appears on my doorstep is called The Post. Over the last year or so there has been one and at best two local news pieces and the rest is full of advertising or syndicated garbage.
I completely understand the sales model and advertising is the only income for these papers, but unless the product is worth reading then its only value is to reline the cat litter tray.
OK, we have the net and the majority of people are on it, but there is still a great place for local papers if they are informative and genuinely useful. There is nothing wrong with the major players moving their subbing offices to regional hubs as long as they invest in local reporters and produce quality material and actually give the reader worthwhile news and lots of it. The problem is, they don’t seem to believe in journalism anymore and this is a terrible shame as this was the foundry for up and coming youngsters.
The big publishers out there seem to be totally clueless in how to produce a decent local newspaper and worse at developing their web sites. They really are dreadful and as much as they try to blame ‘market forces’ and a change in peoples reading habits, it is their short sightedness and drive for profit which is devastating local publishing.
There are incredible opportunities of local publishing, be it physical product or via the web, but these dinosaurs don’t have a clue as the only meetings they have focus on costs rather then genuine innovation. Everyone lives somewhere and therefore everyone is local. The majority of money spent is at a local level, be it a supermarket, car dealership or estate agent.
If local media is not to be lost, the major players need to revitalise themselves and start producing products the consumer actually wants. If they continue to squeeze the editorial quality and volume then this will be their downfall, brought about by themselves.