Modern newspapers must downsize to survive

Detractors predicted the paper wouldn’t last a month.

On the eve of its second birthday, its senior editorial team is already celebrating with figures just out showing month-on-month circulations rising nine per cent and year-on-year topping 57 per cent.

These are massive figures. For context the paper sells about 280,000 copies a day compared with something like The Sun whose headline circulation is more than 2.8 million. But it has leapfrogged its fancied rival The Guardian in sales by more than 30,000 a day and in a world where the demise of the printed word is said to be imminent, maybe just five years, it’s a success story.

“I am very nervous about over claiming but in the quality newspaper market that’s a hell of an achievement,” i executive editor Stefano Hatfield said this week.

The British newspaper industry is under as much scrutiny today as it was during the Rupert Murdoch union busting days in the mid 1980s that allowed the industry to thrive to now enjoy the biggest news consumer population per capita in the world.

The Parliamentary Leveson inquiry will next month issue its report into the public inquiry into the press in the UK, and is looking for press regulation backed by statute that newspaper editors say threatens the priceless freedom of British press.

The inquiry followed the public’s shock and disgust at revelations of phone hacking, so wide it led to the closure of the 168-year-old News of the World and the arrest of more than 30 journalists from a number of newspapers. At last count there were also about 400 people seeking damages for having their phones hacked. And all this coming as newspapers were already struggling under the weight of lower margins stemming from decreasing ad sales, new technology, including new publishing platforms and the threat of an unchecked proliferation of news blog sites.

Some detractors again say the newspapers industry is over, if not now then in the very near future. But not so fast.

Professor and Head of Journalism at City University London George Brock believes the industry is rapidly changing due to the over provision of news.

He says it was no longer an industry as such as it goes through an awkward transition that will lead to further brutal job cuts, less pagination, mergers of daily and weekend papers and some world famous titles publishing in print form less frequently. Large rich new-media companies like Google may also make a move to buy established legacy titles.

But from that would emerge a new leaner industry where trust remained the key and newspapers continue to print.

“I certainly don’t think print is going to disappear, it’s just not going to be the big dominant sector with lots of jobs that it use to be,” Professor Brock says.

“The total national circulation has been declining since the late 1940s so decline is a long one and its safe to say it will continue to decline but that does not mean they will get less news or less valuable news, they will be getting it different ways, digital editors will figure out ways of making money or cross subsidizing somehow.”

While in the US there has seen a bit of a trend for independently run journalism centres producing content then selling it to leading news organisations, he said it ultimately came down to trust and readers trusted brands which carried full control of their content rather than outsourcing.

Indeed when Julian Assange and Wikileaks wanted to releases its cache of thousands of secret diplomatic and military cables to the public, it had the Internet to deliver the blow but needed the credibility of recognized and respected brands such as the New York Times in the US, the UK’s The Guardian, Spain’s El Pais, Der Spiegel in Germany and the French Le Monde to validate their documents and claims.

In the last circulation figures released in the UK, most of the national titles saw a dip in sales of 2-9 per cent, the Daily Star among the worst with a 16.18 per cent plunge.

The i is the standout. It is the sister paper of the left leaning former broadsheet Independent newspaper. The i barely has any staff itself, instead uses the Independent’s journalists’ copy subbed down into a more compact form and cherry picks from its range of stories and commentators.

Most stories are a concise 400-450 words. The layout on its tabloid-sized 56 pages is almost like what you would see if you were reading it digitally. Shorter stories, high story count but a broader mix of serious and not so serious and selling for only 20 pence where as the Independent sells for 1.20 pounds or The Times 1 pound. And some are saying perhaps this is the way of the future. Sharing the same newsroom as well as 80 per cent of the copy is a huge cost saving.

“I think it has succeeded beyond most people’s best expectations and I think I wouldn’t claim it’s the savior in the fortunes of newspapers or anything like that, its basically a very bright marketing led idea,” he said.

“It’s like a product extension, its like doing Diet Coke out of Coke, it doesn’t mean you are destroying the main brand, it means that you can extend the overall audience and that’s what we’ve done.”

Hatfield said reader research had shown many people felt guilty buying a large newspaper and only reading a small portion.

“You don’t buy a meal and throw out a quarter of the meal, you don’t even buy a coffee and leave half the coffee,” he says. “It’s buyers remorse and you should not have buyers remorse about buying a newspaper.”

The newspaper this week went on sale at Starbucks coffee houses in the UK with the chain choosing the newspaper as popular for all audiences for the link up. It already sells bulks to the major airports which has also helped circulation figures.

Respected media analyst Douglas McCabe from Enders Analysis said people’s attention spans had changed and some newspapers did not recognize that. The average reader spent 40 minutes a day with a newspaper but only 15 minutes a month online. Thus digital was an additional news tool not a total replacement.

He says the industry will go back to grass roots, smaller newsrooms providing solid content news service.

“We will all perhaps in hindsight look back at what happened in the second half of the 20th century and the last 30 years enormous building up of scale of journalists, sheer number of pagination of newspapers and volumes of advertising brought in, as a temporary experience of the industry as a whole,” he says.

“My sense that those business that are more agile and able to resize will certainly have a chance at survival. It’s not like this is all going to suddenly by worthless somehow, there is still a consumer need for it, there is still a consumer need for trusted news provision, still a consumer need for aggregation of commentary. That fundamental consumer need has not gone away and has become stronger.

“The ones which will survive will be the ones that rescale to a size that is more appropriate for the amount of money coming in.”

He said it was theory only a few years ago about lowering fixed cost distribution charges by reducing the number of outlets you delivered to but that was already becoming reality in the UK. He also said advertisers were unlikely ever to come back to the same level as a few years ago but remain strong supporters.

“Value of print has not by any means been switched off yet and I think again for the bigger selling and upmarket titles newspapers and magazines there is still a significant value in print. Print is still a transactional funnel for advertisers, a good way of communicating brand messages and also quite complex messages the one thing about print messages is you can write a lot of words, you can explain tactics quite well a lot of other media struggle with that. Print continues to have a position in the market and will continue to have a position in the market for sometime yet.”

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