Local news success must come through relevance
I recently read an article by James Ashton in the Evening Standard which is one of the most incisive I’ve read in recent times about the plight of regional newspapers and the knock-on effect for media jobs in the regions.
It is ironic that, while we have a culture secretary who is championing “ultra-local” broadcast businesses, print equivalents are rapidly losing the sense of identity that makes them a ‘must buy’. Of course, it is an expensive thing to maintain a news centre in every town – but there are many ways to skin a cat.
As Press Gazette reported back in 2010, ultra-local news websites are flourishing – and attracting advertising. In an age of information overload, the most relevant information is going to be the most valuable; if you don’t believe me, ask Google. They have built a multi-billion dollar business on precisely the idea that the more you know about someone, the better you can target them with advertising – and the more you can charge those advertisers. And one of those key metrics is location.
So it is possible to argue that at the very time when local newspapers have had a golden opportunity to exploit their relevance, they have ruined their own business models by centralising content resources. Of course, the reasons for falling newspaper circulations are much more complex than I (or Ashton) have hinted at. But – as some local newspapers have shown – relevance and an understanding of your community can buck the trend.
Nonetheless, the internet is obviously a massive threat. A simple example: when I was growing up, the only place you could find local cinema listings was your local paper. Now, it is so much easier to type “Cinema, Kent” into your search engine, and see what comes up.
As Ashton writes:
“Underneath borrowings of £370 million, Johnston is still a decent business with a 17% operating margin. However, the company used to make twice as much as that. Now sales are falling fast and successive bosses have failed to prepare it adequately for a digital future. The simple, worrying, truth is that Johnston had larger revenues in the last half-year from contract printing than the internet. At £9.5 million, online made up just 5% of group sales. It is a similar story at Trinity Mirror, where digital accounts for the same proportion of turnover despite a string of acquisitions.”
The encouraging thing for regional newspaper groups is that, despite their own lack of foresight, usage of their websites is increasing rapidly. The last ABCs show a 25% increase in visits to websites operated by the major regional news companies. It shows, at the very least, that consumer demand is there: if only the papers themselves were providing the compelling content that local users need.
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work in the TMT (technology, media, and telecoms) space, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.