I read with despair the Press Gazette interview with Daily Mail and General Trust finance director Peter Williams saying that “greater consolidation is needed to make the transition to a ‘brave new world’ in the regional press”.
It’s my belief that any further mergers in the UK regional press will finish the industry off all together. The UK is dominated by four major players with very few independent publishers left.
Consolidation has been happening constantly since the mid 1990’s but what has been achieved? Massive newspaper conglomerates with unrealistic operating profit expectations and hungry expectant shareholders.
Added into the mix is the fact that 90 per cent of regional newspapers are working on a business model that is 50 years old. Separate advertising teams, separate editorial teams and an over reliance on the advertising categories of jobs, motors and property.
The internet (Rightmove, Autotrader, Monster) has stolen ad revenues from what are still regarded as the ‘holy grail’ categories for newspapers. The revenue lost from these categories can never be recaptured and it is unsustainable for some groups to continue taking advertising at below cost.
I previously worked for almost all of the big players during my career and have held a number of senior management positions in both newspaper and new media development/management.
In 2004 I decided I knew enough to launch my own business to business publishing company using the knowledge gained through 20 years in the regional press. Fourteen months later I’d lost everything and was on job seekers allowance.
On reflection, all that I’d learned and put into practice would have worked if I was still part of a big group. Unfortunately I wasn’t and the cash quickly ran out.
Having licked my wounds for a couple of months, I decided to give it another try by launching a ‘paid for’ into a small North Devon town – right in the heartland of ‘big group’ territory.
I sold enough advertising in the launch edition to cover the print bill and four years later I have a product which has strong newspaper sales and advertising revenue which still continues to show year on year growth – but not enough to make me my millions I hasten to add.
There is plenty of room in the UK for small independent publishers to produce publications that people will buy to read. Make the publication very relevant to the area you serve and fund it with cost effective advertising rates.
There is absolutely no justification for charging four times the standard rate for jobs and newspapers don’t need property or motors advertising to succeed. Make run of paper advertising affordable and you’ll find businesses will advertise.
If the larger groups are struggling, there is a real opportunity for those with either a journalistic or commercial background to take advantage. Further consolidation of the UK regional press will be a bad thing for the bigger groups, but could prove fruitful for those who are prepared to launch publications that do not operate within the same restrictions or traditional regional press mindsets of what a newspaper must have to succeed.
Ultimately, the larger groups have to fundamentally change the way they operate if they are to survive, but I fear the tunnel vision of those indoctrinated souls running these organisations will ultimately mean they will fail.
Paul Henderson is publisher of the South Molton & District News