“Too many agencies surviving on share deals to prop up business models”

“Too many media agencies are surviving on share deals to prop up their business models”, Paul Hayes, managing director NI Commercial at News International, told the audience at today’s MediaTel Group ‘Future of Newspapers’ seminar.

“There is not just an over supply of media; currently there is an over supply of media agencies.”

Phil Georgiadis, chairman and chief executive, Walker Media, agreed with Hayes. “The advertising industry is sustaining an old model,” he said. “We are trading share and this is leading to an oversupply of media.” He added: “20% consolidation won’t hurt competition.”

Also on the panel was Guardian News & Media MD Tim Brooks, who said that industry “oversupply and too much cost” would lead to big changes over the next five years.

With the continued problems facing the newspaper industry, it is perhaps inevitable that there will be some closures and a period of consolidation.

Newsline columnist Raymond Snoddy said that although newspapers are still looked on by some as vanity projects allowing them entry through previously closed doors, titles treated like this can find themselves in trouble.

He pointed out that the the lack of investment in the Express Group newspapers would lead to their closing, while the Independent is in trouble now that its debts are no longer offset by the profits at INM’s Irish interest.

Enders Analysis founder Claire Enders added that with its current financial problems, the Independent could close by the end of the month.