Johnston Press chief executive Ashley Highfield believes the company’s future lies in driving subscriptions following the spate of cover price increases across its regional newspapers.
Highfield has also claimed that the rate of decline on Johnston’s vast portfolio of newspapers is bottoming out and urged the Government to examine the role of the BBC and its impact on the local press.
In April the former Microsoft executive outlined ambitious plans to double Johnston's current profit margin (17 per cent of operating profit) by 2020 and increase turnover from £350m to £400m.
Key to achieving that is increasing subscriptions from 3 per cent of sales in 2011 to 50 per cent within nine years.
Highfield was interviewed on BBC Radio 4’s The World this Weekend yesterday after the paper began rolling out the second phase of its plan to relaunch around 170 of its regional titles.
“I think that this assumption that all regional newspaper are in inexorable decline is wrong,” he said.
“On average, the decline is around 4 or 5 per cent and that’s prior to the relaunch. I think that if we start to invest in our newspapers then we can actually, if not completely halt that decline, certainly get it to a place where it’s manageable.
“If we do have a paper that sells 30,000 and it only declines by 5 per cent then next year it will be doing 28,500, the year after that 27,000. We’ve probably got 30 years at that rate before a paper become unprofitable.”
Highfield added that the “rate of decline in print is bottoming out”, adding: “We’re also looking at making our newspapers a better proposition by investing in them and being able to put the cover prices up.
“That’s not something that our readers are going to rejoice about but they do understand that the papers need to be charged at a price that’s value for money.
“I think the future for our business is to drive subscription levels. So if you take something like the Boston Standard, where we’re putting the price up, we’re actually holding the subscription level down at 37p, which is considerably lower than the price before we even put the price up.
“What we’re trying to do is move people to a subscription where they’ll get the paper, the iPad app, the website, everything in one bundle for considerably less than the cover price of the paper.
“I think it’s really about being at the heart of the campfire, whether that campfire’s digital or analogue but being right at the centre of the community.”
Asked whether there was anything the Government could do to help the newspaper industry, Highfield it should look into increasing broadband access, adding: “I think working out the role that the BBC should play is another significant area that the Government needs to look at.”