“It’s becoming like the Hunger Games for journalists,” says one reporter, summing up the increasing uncertainty of life working in the economically precarious regional newspaper industry.
In the space of two months, Reach, the UK’s biggest regional and local newspaper owner with hundreds of titles and sites including the Birmingham Mail, Liverpool Echo and Manchester Evening News, has embarked on two rounds of cuts, putting about 620 jobs at risk.
As a listed company, the travails at Reach, which also owns the Mirror and Express nationals, provide the most public insight into an industry-wide struggle to find a sustainable model for local journalism in an increasingly digital media age.
The numbers make for bleak reading: in the past decade about 300 local newspapers have shut as print advertising, the once mighty backbone and lifeblood of the market, has lost more than £1bn in value, mostly to digital companies such as Facebook and Google.
In the mid-noughties, when Facebook was in its infancy, the UK regional newspaper advertising market was worth £2.5bn. At the end of last year it was valued at £241m.
“It is a challenged market for sure,” says Douglas McCabe, the chief executive at Enders Analysis. “In terms of a print business, circulation has been falling away at rates of decline that are pretty worrying, volumes are probably down around 65% over the last 10 or 12 years.
“Publishers have some levers, increase cover price and reduce pagination, but it does feel like we are getting toward a period where the industrial scale of print is looking quite small and a lot less sustainable.”
Consolidation remains key, with most of the UK regional newspaper market controlled by only three big publishers – Reach, Newsquest and National World – each seeking economic security in size. The collapse of the sector has meant the value of many of the crown jewel regional titles has plummeted.
JPI Media, the former owner of the historic titles including the Scotsman and Yorkshire Post, was acquired for £10m a little over two years ago; the Scotsman group was valued in 2005 at £160m, and the Yorkshire Post and its sister titles at £570m in 2002.
In 2006, the publisher of the Daily Mail turned down a £1.1bn offer for its regional division – deciding to hold out for £1.5bn – only to hive off the home of titles including the Leicester Mercury and Nottingham Post six years later in a £100m deal.
With traditional advertising and circulation facing irreversible decline, exacerbated by newsprint prices hitting a three-decade high amid soaring inflation, running costs continue to mount at an alarming rate.
In London, the Evening Standard has seen losses hit almost £70m in the past five years, a financial blackhole exacerbated by the Covid pandemic, which kept commuters at home, with incessant rounds of cost-cutting taking its toll on local newsrooms across the UK.
“Right now the mood is the lowest I have ever known it,” says one veteran news journalist. “Many local journalists feel they are working day to day, waiting for that tap on the shoulder saying they are part of the next cuts.”
The answer has been a drive to digital, which appears to have proved successful. The number of unique users visiting the local websites of the UK’s main publishers have been as high as 80 million over the past year, according to Enders Analysis.
The problem to date is that the shift online remains largely a case of giving up print pounds for digital pennies. While £1bn in print ad income has disappeared over the past decade, the online ad spend for UK regional newspapers totalled just £229m last year.
In January, a report on the sustainability of local journalism by the Commons digital, culture, media and sport committee said struggling local media outlets should be helped to survive with government funding. The report also reignited the debate over the impact of the low-cost rollout of digital local news in the pursuit of scale, with the committee of MPs accusing the biggest local news publishers of “compromising on quality”.
Critics have accused publishers of pursuing “clickbait” strategies, which some local editors have described as “snobbery”, as well as overloading content with ads to the detriment of the reader experience.
“The scale of online audience is very impressive but they’ve not worked out how to retain usage and build value for users,” says McCabe. “The majority of sites are nowhere near monetising sustainably. The focus seems to be on getting as many eyeballs on a page as you can, but it needs to be about what is valuable.”
Bosses at Reach acknowledged an “online attention recession” when outlining the latest strategy to attempt to return its digital audiences to growth.
Reach said that there has been strong recruitment in growth areas including digital local and hyper local news, alongside a programme of cuts, with overall staff numbers broadly stable at pre-pandemic levels.
“Local journalism can only be a force for good, as it is on titles across Reach and other local publishers, if it is read by as many people as possible,” said David Higgerson, chief digital publisher at Reach. “There is a lot to be excited about in local news, and what we’ve done with the Manchester Evening News or Northern Agenda newsletter proves that. Like other publishers, we’ve had a lot of success with newsletters - off the back of this we’ve been rethinking our smaller local titles and have been moving to a more newsletter-led model, with an even greater focus on engagement.”
Publishers have also been affected by Facebook’s move to have less news appear in users’ feeds, as well as a wider slump in the global digital ad market.
The industry is also eagerly awaiting full statutory powers being given to the UK competition regulator’s digital markets unit, which will enforce a code of conduct for big tech to ensure advertising deals are struck on fairer terms.
However, when similar legislation was first introduced in Australia, it initially led to Google and Facebook striking deals with larger publishers but leaving out smaller players.
The slowdown in the digital market is adding significant pressure in the battle for financial survival. Reach recently reported that digital income is down 12% so far this year.
And yet it is far from all doom and gloom in local media.
The number of new local media launches balanced out closures in the two-year period from September 2020, according to analysis by Press Gazette, indicating the industry has not reached the point of catastrophic collapse many had predicted.
One of the new kids on the block is Manchester Mill, which publishes newsletters monetised through its paying base of Substack subscribers, which hit profitability late last year.
“It felt like the companies who dominate local media had basically given up,” says Joshi Herrmann, who launched Manchester Mill during the pandemic in June 2020. “I definitely didn’t think local media would be the place I was going to build a huge business, it appealed to me as a challenge rather than a sure thing.”
The slimline Manchester Mill operation is profitable on the basis of 2,000 paying subscribers, who receive four newsletters a week at a cost of £7 a month, or £70 a year. Non-paying fans can receive just two newsletters.
Expansion of the model to Sheffield and Liverpool, which are both on course to break even this year, has taken subscriber numbers to more than 4,250.
Herrmann says his operation of about six full-time equivalent staff is the “absolute minimum” needed to produce a quality viable product for paid audiences, and says it is a question of business models and not the relevance of local content at the root of the economic decline in regional publishing.
“The most important thing I’ve learned from the last few years is that there is a massive demand for high-quality journalism,” he says. “The decline is not because people don’t want good local journalism, the problem is that becoming nationally focused is quite alienating, the model is broken.”
Other success stories in the local media landscape include the Bristol Cable, which has operated a member-owner model since 2014 and has become a master of tapping grants and funding, as well as the hyper-local network Nub News.
Among traditional publishers, DC Thomson’s Dundee Courier and Aberdeen Press and Journal, the UK’s bestselling regional newspaper, have done an admirable job to date of maintaining a resilient print readership base while also building digital subscriptions to about 30,000.
“Local news media performs a vital role in holding power to account and scrutinising authority on behalf of communities across the UK,” says Owen Meredith, the chief executive of the industry body the News Media Association. “The sector faces challenges to its business model but still reaches huge audiences due to the growth of digital. There is much that can be done to endure a truly sustainable future for local journalism.”