Trinity Mirror chief executive Sly Bailey has said the group “absolutely believes” in local newspapers – despite closing 27 titles and cutting 1,000 jobs in the past year.
Bailey – whose group runs the Mirror, People, Record and more than 170 local newspapers – said newspapers were vital to local democracy.
She said advertising would return, added Trinity Mirror was “one of the few” companies that made money online, and appealed to the Government to allow more “consolidation” across titles.
Speaking to Sky News‘s Jeff Randall in her first television interview since becoming chief executive in 2003, Bailey said: “We absolutely believe in the need for consolidation.
“If you look at what’s happening in the regional newspaper industry, we’re facing structural challenges – but actually, the clear and present danger is the advertising recession.
“What we are saying to the Government is the industry needs to consolidate. The problem is the regulator looks at our industry and very narrowly defines us as print markets.
“What we are saying is no, we now operate in a much wider competitive market – not least with online.
“But I think there is a much, much more crucial point here – and that’s about the long term future of local media and local journalism.
“Now, this [local press] is not cat-up-a-tree journalism. What we are talking about is who turns up at the lower courts every morning, who is it that’s holding councils to account, where is that planning application being properly debated?
“Local newspapers – and we absolutely believe in them.”
‘Ad spend will come back’
When asked by Randall to look into the crystal ball, and predict where ‘the bottom’is for newspapers, Bailey said: ‘Ad spend will come back, and with that we will see a return to health of the newspaper market.
“Don’t write off newspapers. They’re not finished. If you just look at the numbers, 140 million newspapers are circulated every week in this country.”
Randall reminded Bailey that, on starting her job, she promised to “stabilise, revitalise, and grow” the company.
He said she had been a “very effective cost-cutter”, but questioned the growth.
“There are areas of growth in our company,” Bailey replied.
“If you look at our digital growth, for instance, we now publish more online brands than we do print brands.
“That’s quite deliberate – we are taking our brands and content across new platforms where our consumers and advertisers will want to be.
“[We had] 27 per cent digital growth last year, which is certainly outpacing that of the industry – so if you look at our company, there are absolutely areas of growth.”
‘Audience doesn’t pay the wages’
When asked on the nature of the growth, Bailey said: “I’m talking about revenue growth. I think that’s really important because yes, we want audience growth – and our audience grew by about 40 per cent last year – but audience doesn’t pay the wages.
“What we have to do is make sure we are generating revenue, and we can convert that into profit. I think that’s what sets us apart as a media company, because we focused very hard over the last few years on the business model of digital.
“It’s not difficult to generate audience and to generate users. But if you can’t charge for content, it’s actually much more difficult to drive new revenues and make profit.
“If you look at our regionals business, almost 18 per cent of our profit last year came from digital. So yes, we are one of the few media companies that’s making profits out of digital.”
Bailey added the company was cutting costs “without detriment to quality”.
“We are closing titles if we can’t find a path to profitability – reluctantly, I will say, but that’s what we are doing, allowing management to focus on stronger brands,” she said.
“We’ve cut headcount as we’ve cut titles, and we”ve put in place a pay freeze across 2009. That’s about making sure we can see our business through the downturn.
“But at the same time, of course, we do have to continue to focus on the longer term, and as a media company that’s about continuing to innovate, continuing to launch, and particularly we think it’s important to modernize the very process of publishing.
“We are putting in new technology across the business, which is modernising the way we go about the business of newspaper publishing: more efficient, multi-platform publishing, which meets the needs of our consumers, and our advertisers.
“That’s driving efficiencies, it’s lowering costs across the business and – I think the important thing here is – without detriment to quality.
“That’s about positioning our business for when we come out the other side of this recession, so we are a better business.”