Reach CEO: ‘We’re a pyramid without its top’
The Media Leader Interview
Piers North, Reach’s new CEO, discusses why the UK’s largest news publisher is embracing subscriptions as part of a wider drive to improve what have been flat digital revenues.
“I don’t know if we’re going into winter or we’re going into spring, but the seasons are changing, and we needed to take a strategy that would reflect that change.”
Piers North, Reach’s CEO since the end of March, practices realpolitik. Speaking to The Media Leader at the publisher’s Canary Wharf office ahead of its Q3 trading update this week, North explains he was appointed to succeed former CEO Jim Mullen to provide “continuity, but change” — even if change requires difficult choices around reorganising staff.
“We don’t have the luxury of easy decisions,” North says.
Last month, Reach proposed an organisational restructure aimed at modernising its editorial business. It placed 600 editorial roles at risk, with 321 jobs being cut and 135 new roles added. The goal, as North describes, is to organise Reach to be better suited to a digital-led, video-focused future.
The National Union of Journalists decried the proposal, warning of a decline in morale. “The thought that any media business can afford to shed hundreds of talented journalists to secure its future makes you wonder what sort of future that will be,” NUJ national Reach coordinator Chris Morley comments.
“It would be nice just to keep doing everything we’re doing and then do video on top,” North responds. “But we can’t.”
The UK’s largest publisher has been managing a decline in print revenues while seeking to accelerate growth in its digital business for years. However, modest digital revenue growth has generally failed to offset declines in print, and the latest quarter was no exception.
Group revenue declined 2.5% year on year in Q3, thanks in part to a 3.9% fall in print revenues (including a 13.3% decline in print ad revenue). Meanwhile, digital revenue growth of 2.1% is “not good enough” for North.
“Everything we do is predicated on digital growth,” he says. “Every risk that we have to manage is predicated on digital growth. The amount we charge for the papers is based on our digital growth rate. How we are going to deal with our pension requirements is based on our digital growth. How many people we employ: digital growth.”
Forward and back
Reach’s efforts to grow its digital business have been “one step forward, one step back”, North admits. He lauds strong progress on e-commerce and video, but laments a “really difficult year” for local businesses advertising in its titles. The increase in national insurance contributions has tightened budgets, particularly among smaller regional businesses.
Meanwhile, North warns agencies have moved money out of private marketplaces (PMPs) and programmatic guaranteed (PG) buys.
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The issue risks being exacerbated by developments in AI search, which has broadly reduced referral traffic to publishers from Google. As The Media Leader previously reported, independent and regional publishers have been particularly hard hit by a decline in referral traffic, placing their businesses at risk if they were overly reliant on programmatic ad revenue.
In its Q3 trading update, Reach noted it saw “softer performance” in its “volume-sensitive” on-platform programmatic ad revenues. Meanwhile, “lower digital referral volumes” across its titles, particularly from Google, have led to a 1% decline in page views over the nine-month period from January.
“Is there a game still to be played here, but we just don’t know the rules? Or is the game ending?” North asks rhetorically. “I don’t think any publisher really knows the ins and outs of it.”
What North is sure of is that publishers must adapt to a changing web.
“We never operate on the basis that there’s cavalry riding over the hill from government,” he says. “With all due respect to the Government, they can’t move quickly enough. […] If you’re a publisher hoping to get helped out by regulation, then that’s probably a false hope.”
While North suggests the Government should enforce the copyright laws already on the books, he is clear-eyed that the technology brought on by AI companies isn’t going away. For publishers, that means success is analogous to offering consumers value beyond what they can glean from an AI Overview.
Subscriptions as a capstone
Offering greater value comes at a cost, and this summer, Reach finally admitted to the need to embrace subscription models as a new revenue driver.
“We’re a pyramid without its top,” North explains.
Reach is rolling out three pilot subscriptions before Christmas for the Manchester Evening News, Wales Online and the Liverpool Echo, respectively. The effort is in collaboration with Piano, a company that specialises in subscription management solutions. The cost of each subscription has not yet been decided.
“It’s both an offensive and a defensive measure, right?” says North. “If we are going into a different era of search, the playbook has to change. And consumers will start to realise that.”
By embracing a subscription model, Reach is following the strategy set out by free-to-access rivals Newsquest, the Daily Mail and The Sun, who have likewise begun fencing a portion of their content behind a paywall.
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In exchange for payment, subscribers to the news outlets will receive a cleaner UX, exclusive content, and offers and discounts. Core reporting efforts, including council reporting, local democracy reporting and crime reporting, will remain free to access.
Meanwhile, loyal readers who criticised Reach titles’ ad clutter will now have an “off-ramp” to a more “beautiful experience”.
“We don’t have a right to take money off people,” says North. “We have to offer a value proposition, and we’ll earn that.”
North admits the subscription market is “constrained”; not only will Reach be competing for revenue with Newsquest, the Mail, The Sun, and countless Substacks, but it will also enter the same pool of companies as Spotify, Netflix, Sky and other entertainment businesses haggling for monthly payments.
Given Reach’s audience scale, however, the effort will be a success if the publisher converts just a small fraction — 2% to 3% — of readers into paying subscribers.
“We’ve got to find our niche,” North continues. “And it comes back to the maths game. We don’t need a huge percentage [of readers to subscribe] to make a difference to our business.”
‘We’ve got to adapt’
North began his career in media as a journalist, though he doesn’t want to pretend he was “in any way competent”. Originally wanting to be a war correspondent, he fell into rugby, covering the sport amid the .com boom. He subsequently transitioned to the commercial side of publishing, working a decade at Yahoo! before joining Reach (then Trinity Mirror) in 2014.
Now, as CEO, he has one core mission: putting the business “back to growth” after years of topline loss.
North believes the global media industry needs a high-margin journalistic enterprise like Reach to succeed, both so it can continue providing coverage, keeping local democratic institutions, including in Nottinghamshire, to account, but also to provide an accountable alternative to content creation.
Acknowledging publishing has always been a “mixed economy” between hard news and lighter touch stories, North argues publishers must learn “the tricks and trades of the world that we’re in” — an attention economy increasingly dominated by short-form video and sensationalised content.
“We passionately believe in the importance of journalism within a content world,” he says. “We’ve got to move. We’ve got to adapt. […] Otherwise we’re going to become carriagemakers complaining about the big iron horses coming through their town.”
“If we don’t succeed as an industry because people would rather watch a 21-year-old opening a packet of digestives on TikTok, that’s kind of on us.”
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