The regional newspaper industry is in a strong position to maintain and grow its profits over the long term, despite the fact that copy sales are unlikely to increase, according to new independent research.
A market intelligence report from Mintel values the industry at £3.6bn – with £2.9bn of that coming from advertising revenue.
Although consumer expenditure on regional titles is estimated to be around the same as it was in 1998, advertising revenues have grown strongly, up 20 per cent from 1998 to 2002. This is in marked contrast to the nationals, where ad revenue grew just 6 per cent over the same period.
Consolidation of the industry into a handful of large players has also led to economies of scale in areas such as printing, newsprint purchase and distribution.
Although further large-scale consolidation is unlikely, Mintel believes the bigger spending power of these players – notably seen in purchases of new colour presses by Johnston Press and Trinity Mirror – will pay further dividends with advertisers in future.
Investment in online services will also pay off, the research says.
“Regional papers have particular strengths that will help to ensure their continuity, notably in their focus on the local which enables them to cover news and information not readily available in that detail,” the report says.