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7 shocking local news industry trends which should terrify you.
By Andy Williams | 23rd May 2017
7 shocking local news industry trends which should terrify you.
The withdrawal of established journalism from Welsh communities and its effects on public interest reporting.
Dr Andy Williams, School of Journalism, Media, and Cultural Studies, Cardiff University
In the first of two essays about local news in Wales, I draw on Welsh, UK, and international research, published company accounts, trade press coverage, and first-hand testimony about changes to the economics, journalistic practices, and editorial priorities of established local media. With specific reference to the case study of Media Wales (and its parent company Trinity Mirror) I provide an evidence-based and critical analysis which charts both the steady withdrawal of established local journalism from Welsh communities and the effects of this retreat on the provision of accurate and independent local news in the public interest.
This piece was recently submitted as evidence to the Welsh Assembly’s Culture, Welsh Language and Communications Committee’s inquiry into news journalism in Wales.
1. Local newspapers are in serious (and possibly terminal) decline
In 1985 Franklin found 1,687 local newspapers in the UK (including Sunday and free titles); by 2005 this had fallen by almost a quarter to 1,286 (Franklin 2006b). By 2015 the figure stood at 1,100, a 35% drop over 30 years, with a quarter of those lost being paid-for newspapers (Ramsay and Moore 2016). The same research finds only a small number of new local titles launched over the same period. Industry executives have downplayed these figures, arguing that most of the closures were to free weekly titles, and that previous, more extreme, predictions around newspaper closures (e.g. that of Enders 2009) had “blown [the problem] out of proportion” (Sweney 2015). The loss of more than a third of local titles, however inaccurate previous predictions may have been, is not something to be dismissed so easily. Wales has not suffered newspaper losses of this magnitude yet, but Welsh communities from Port Talbot in the South, to Wrexham in the North, have felt the loss of news outlets. As Howells’ research (2015, discussed below) finds, the loss of a dedicated local news outlet can have serious and wide ranging effects on local public debate.
A less dramatic and visible, but equally disturbing, trend can be found in across-the-board declines in Welsh newspaper circulations. Between 2008 and 2015: The Daily Post declined 33 per cent (from over 36,000 to 24,485); the South Wales Echo lost 60 per cent of readers (from 46,127 to 18,408); and the South Wales Evening Post’s circulation fell by 46 per cent (from 51,329 to 27,589) (IWA 2015, p.62). A longer-term view of circulation decline is evident in figure 1, which charts average 6-monthly circulation of the Western Mail since the turn of the century.
These data show that the national newspaper of Wales has lost almost three quarters of its audited circulation since 2000. This is alarming for numerous reasons, but mainly: because print circulation revenues still remain very important to the balance sheets of major local news publishers (see point 5, below); and due to the likely continued decline in the perceived value of print among advertisers as audiences continue to shrink (there will come a time when it no longer pays to advertise to relatively small printed newspaper audiences). The Western Mail has consistently lost around 10,000 daily sales every four or five years over the last two decades; if this trend continues there will be no readers left by the early-to-mid-2020s.
The effects for a community when a newspaper is lost are serious. When the Port Talbot Guardian (a local weekly newspaper) closed down in 2009 citizens lost their primary source of day-to-day information about how to navigate civic and community life. But they also lost (what had previously been) a newspaper of record, and a large portion of the town’s collective memory. This kind of loss was echoed by Trinity Mirror’s particularly damaging recent decision to cut off Welsh citizens from much of the South Wales Evening Post online archive as part of a group-wide efficiency drive after the Local World buyout. The effects of losing one of Wales’ large daily newspapers in this way could be more serious and wide-ranging.
2.The local news industry is losing money hand over fist:
Local news has traditionally sustained itself in two main ways: by selling news products to us, and by selling our attention to advertisers. Both of these principal revenue streams are now under threat, and have substantially decreased. Local newspaper advertising income fell by an average of 6.6% per annum over the period from 2009 to 2013; the drop included both display and classified advertising, with classified ad expenditure – previously a staple of the local newspaper sector – falling 63% between 2007 and 2012 (Ramsay and Moore 2016).
As we have seen, at the same time as advertising revenues have fallen we have seen drastic reductions in revenues from sales of printed news, and no widespread adoption of, or experimentation with, paid content strategies for digital local news (Greenslade 2009, Williams 2012, Mintel 2013). Sales of printed local newspapers have declined across the board and circulation revenues have been correspondingly hit. Revenues from the local press, which in most cases has been more reliant on advertising income than cover price, have declined significantly, and in some cases have more than halved (Picard 2008). In a detailed and extreme local case study former regional newspaper editor turned academic Keith Perch (2015) showed that revenues at the Leicester Mercury sank from £59m to just £16m between 1996 and 2011.
Media Wales’s revenues and profits over the last two decades offer a useful, and broadly representative, case study to explore analogous trends in Wales.
Between 1999 and 2005 revenues grew steadily by almost £15 million, and profitability soared. This was largely down to a combination of still very high print advertising revenues, and (in common with other major publishers) sustained cuts to the editorial workforce combined with successive restructuring exercises carried out in order to save money and maintain high profits. Profit margins in the period 2002-2008 hovered between 27 and 36 per cent, making the company among the most profitable in Wales of any kind (Media Wales Annual Accounts). The 2008 financial crisis led to a long advertising recession, and slump from which the local news industry has yet to emerge. Revenues fell by more than 50 per cent against the high-water mark of 2005, and profits shrank. Interestingly (excepting 2013) profit margins were still maintained at between six and 18 per cent. This might pale in comparison with previous figures, but relative to other sectors and industries this is still high, and reflects the way in which the company continued to implement ruthless efficiency savings and maintained efforts to consolidate throughout this turbulent period.
3.Established journalism is rapidly withdrawing from Welsh communities:
Arguably the most concerning issue caused by the collapse in the local news business model has been the steady withdrawal of established professional journalism from newsrooms and communities because of the large numbers of job losses caused by 15 years of redundancies, staff cuts, and recruitment freezes. There are no reliable figures to determine exact longitudinal staffing trends but from the fragmentary existing research it is clear that the human resources of the local news industry have been decimated in recent years. A National Union of Journalists (NUJ) Commission on multimedia in 2007 found that “there had been editorial job cuts at 45% of titles since online operations were introduced”. The Newspaper Society has since stopped publishing figures on industry job losses, but figures cited by Nel suggest there was a 13.75% contraction in the number of local and regional press jobs between 2002 and 2007, a fall from 13,020, to 11230 (Nel 2010). By October 2015 Press Gazette estimated, based on analysis of selected companies’ staffing levels reported to Companies House, that the number of professional journalists employed in the local press was about half what it had been before the 2008 recession. Oliver and Ohlbaum’s 2015 report appears to substantiate Press Gazette estimates: it stated that Trinity Mirror reduced its workforce by 47% between 2008 and 2013, Johnston Press by 46%, and Archant’s by 27% over the same period (Oliver and Ohlbaum 2015). Studies of individual media groups, reporting in specific locales, and over longer periods, shed further light on the nature and scale of this problem. Howells found that the two largest regional news organisations in South Wales were staffed by almost 1000 editorial and production employees in the year 2000, but by 2014 this had shrunk to under 300 (Howells 2015). Similarly, the Leicester Mercury Group employed 581 staff in 1996, but only 107 by 2011 (Perch 2015).
At Media Wales there were almost 700 editorial and production staff in 1999 (Williams 2012), but by 2015 this had shrunk by over 85 per cent with the company employing only 100 (Media Wales 2014). This means that local communities in Cardiff and the Valleys are currently being served by 85% fewer journalists and production staff than in 1999; for every ten reporters (or subs, or designers) working in the region 16 years ago, only one and a half remain. In 2013 there were more people employed in admin, sales, and distribution at Media Wales than journalists putting together two daily newspapers, seven weeklies, one Sunday, and a daily news website.
The Celtic weekly newspapers, seven titles serving Pontypridd, Merthyr, Aberdare, Llantrisant, and the entire Rhondda Valleys, have been particularly neglected. I remember these newspapers a young news consumer growing up in the area, and I spent time at the Pontypridd Observer as a student on work experience in the mid 1990s. These once-proud local papers used to be have accessible offices on the High Street, and were staffed by small teams including a dedicated editor, a small full-time reporting staff each, photographers, and administrators. By 2011, and after a series of redundancies, Press Gazette reported that only six senior reporters and five trainees remained (Press Gazette 2011). Talking to overworked journalists about the challenge of maintaining editorial standards under such difficult conditions at the time, it seemed like things could not get any worse. Today, however, after several rounds of further cuts all of the local offices have been closed (leaving these areas to be covered remotely, from a geographical and cultural distance, in Cardiff), no titles have dedicated editors, and all seven weekly papers, along with their associated online news outputs, are produced by just three and a half reporters. As the work of Howells (2015) demonstrates, many of the effects of this withdrawal of journalism on the quality of news (see below) pre-date the challenging conditions brought about by the move to digital news, and the later spate of newspaper closures. This suggests that both publishers’ editorial and business strategies, as well as external factors such as recession and the digital turn, are a continuing explanatory factor.
4.Media plurality is a good thing, but our news is concentrated in the hands of a few big publishers:
The loss of individual newspapers adds to the already serious concerns of many around a lack of local media plurality caused by the quest for consolidation and greater economies of scale. Media regulator Ofcom states that “plurality matters because it makes an important contribution to a well-functioning democratic society through informed citizens and preventing too much influence over the political process” (Ofcom 2012). Yet our local media markets are far from plural. In 1992 two hundred companies published local newspapers in the UK, but by 2005 this had fallen to just 87; likewise, eight companies owned 80% of UK titles (Williams and Franklin 2007). By 2015 ownership had further consolidated, with six companies owning 80% of titles, and only 62 companies owning at least one daily or weekly newspaper (Media Reform Coalition 2015). The acquisition of Local Word (then the 4th largest publisher) by Trinity Mirror (then the 5th largest publisher) in 2016 led to further consolidation. This research concludes that over two thirds of Local Authority districts, over half of all parliamentary constituencies, and 56% of the UK’s population are not served by a dedicated daily newspaper, and almost half of Local Authority Districts are served by just one publisher (Ramsay and Moore 2016). These headline data do not take into account the loss of intra-company plurality caused by moves to make journalists who were previously dedicated to one title produce news which is re-purposed across numerous news outlets owned by the same company (a move which has also affected the local-ness of our news – see trend 6 below).
The picture in Wales is even more bleak. The recent takeover of Local World gave Trinity Mirror unprecedented dominance in Welsh local news markets, making it by far the largest news company in the country. In-depth mixed-method studies of news and democracy in individual localities over longer periods yield equally stark results. For instance, Howells (2015) found that the Port Talbot (population circa 36,000) was served by 11 journalists working across on five newspapers, all of which had local offices in the town; by 2015 Port Talbot had lost all of its dedicated newspapers, and was covered, part time, and remotely, by two South Wales Evening Post journalists based in Swansea, the nearby regional hub.
Diversity of news provision is desirable because it limits the power and influence of news company owners. But more importantly in the local context, diverse news ecosystems limit the dominance of particular business models and their associated editorial priorities. Wales’ biggest local media plurality problem does not lie principally in the risk that Trinity Mirror CEO Simon Fox might wish to exert political influence over Welsh life, but instead in the fact that Trinity’s cost-cutting, high-output, consolidating and synergistic approach to its business means that almost all Welsh journalists in the commercial sector work in similar ways, producing similar kinds of news, while working under similarly difficult conditions and constraints. Without competition from others with different editorial and commercial priorities local news owners have the luxury of being able to dominate local information systems with minimal outlay on news content; when you are the only game in town investment in news quality is not incentivised.
5.Local news companies now prioritise digital news over print, but make relatively little money from it:
Since the advent of digital news many advertisers have left newspapers, preferring the cheaper and more targeted services offered by digital intermediaries such as search sites (e.g. principally, but not only, Google) social networking platforms (principally, but not only, Facebook), and a range of competitor online classified advertising sites (Meikle and Young 2012; Fenton et al 2010). At the same time, fragmented audiences have moved in increasing numbers to non-linear consumption of digital news. When they do read local news they increasingly do so on social media platforms, or on news aggregation sites, and not directly from local news publishers’ sites themselves (Freedman 2010, Doyle 2013).
These trends, combined with declining print news audiences, have led Trinity Mirror, in common with almost all other local news publishers, to prioritise the web at the expense of print in their recent and future business strategies.
This strategy has led to impressive growth (albeit from a low base) in the readership of Wales Online, which has increased average daily unique readers from 34,000 to 390,000 in just seven years. However large increases in audience figures for UK local and regional online news have not translated into anything approaching profits equivalent to those lost due to declining print titles. We have already seen how falling revenues, combined with a mini-max editorial approach (which maximises profits while minimising investment), has led to the loss of many hundreds of journalists in South Wales. The data presented so far, though, does not show where the revenues to pay the remaining workforce come from. Media wales do not differentiate in annual accounts between revenues earned from digital and print, but these figures are included in the group accounts published by Trinity Mirror.
Figure 5 shows the proportion of revenues derived from printed news, and from digital news, at Trinity Mirror’s Regionals and Publishing divisions between 2003 and 2016.  The large blue area represents the percentage of revenues derived from newspaper circulation and printed ads; the slim orange area, the proportion obtained from digital advertising. Media Wales has (as is common in the sector) prioritised digital, web-first, editorial strategies at the expense of print since the mid-2000s. But this graph underlines the still relatively low value of online ads compared with print advertising. Despite print’s decline, and its near-universal displacement as a corporate priority, it still pays for the majority of the workforce. Given that declining revenues from print have been such a large factor in the hollowing out of newsrooms seen to date, it seems likely that we will lose many more journalists before a more sustainable balance between income streams and staffing levels can be found. This is likely to have many and far-reaching consequences on the working conditions and practices of those journalists who remain, as well as the future quality of local news.
6.Local news has become less local, less independent, and of less civic value than previously:
Studies of news content and journalism practice in Wales and elsewhere have found the on-going crisis in the UK news industry, pre-dating but in some ways worsened by the advent of the internet, is endangering the “local-ness”, quality, and independence of our news (Fenton 2010; Franklin 2006a). Even before the growth of online news scholars had reached consistently gloomy conclusions about UK local newspaper coverage of local democracy: since the mid-1980s the local press in Wales has reduced coverage of local elections, produced fewer election stories with distinct local angles, and reduced “sustained discussion of policy concerns” (Franklin, Court, and Cushion 2006); in more recent studies, in-depth coverage of local politics and the governance of local communities was found to have gradually given way to a more tabloid-oriented spread of news (Franklin 2005); emphasis on news about entertainment, consumer issues, and human-interest stories, has increased while coverage of democracy and public life decreased (Franklin 2006b).
Outside of election times, research has noted that as news revenues fall and staff are cut, workloads increase and mainstream local news relies more on official sources and PR, meaning only a very narrow range of community voices tend to be routinely cited (Davies 2008; Franklin 1988; Franklin and Van Slyke Turk 1988; O’Neill and O’Connor 2008; Howells 2015). Harrison, echoing others’ findings, found that local newspaper reliance on sources in local government was very high, even going as far as to suggest that the growing power imbalance between local media and local governments means that “local newspapers are unlikely to be able to perform their role as principal institutions of the public sphere” (Harrison 1998). O’Neill and O’Connor (2008), ten years later, find that local and regional journalists rely very heavily on a relatively small range of official sources, usually those with the most resources to devote to PR. They also note with alarm that the majority of stories (76 per cent) relied on single sources, with less than a quarter of stories employing secondary sources who may provide alternative, opposing, or complementary information to that provided by primary sources.
Another theme in the evidence base suggests that local news has become less local, and more generic, in focus as editions are cut, local high-street offices are closed, and use of cheap news agency copy (which is often less local in orientation than news gathered on the ground) becomes more prevalent (Davies 2008; Franklin 2011; Hamer 2006; Williams and Franklin 2007; Howells 2015). Howells (2015) finds that as jobs were cut in Port Talbot news gathering practices shifted drastically in ways which made the news less local, and less reflective of the local community. She found that with the gradual closure of local offices in satellite towns, journalists became less visible and accessible to publics, and less rooted in their communities. Journalism was less often rooted in face-to-face interactions (e.g. with members of the public on news “beats”), and decreasingly based on first-hand scrutiny of the institutions of local elites and local government (so journalists became more and more reliant on processing second-hand, mostly official, pre-packaged information sources).
All of this suggests that even before the financial crisis and its consequent effects on staffing levels the local press took much information on trust, was fairly uncritical, relied heavily on PR and other information subsidies, and provided readers with limited access to a range of the (often competing) voices and perspectives actually present in local public debates. There is less research into the UK local news sector post 2008, which is concerning because if critical accounts of newsroom life from journalists and campaigners are to be believed, these trends have only intensified.
7.Digital local news strategies are prioritising profits and clicks over public interest news:
Common pre-digital critiques of tabloidization, or the “dumbing down” of journalism, have taken new form with rise of online local news. A common theme in such critical accounts is the critique of a perceived over-emphasis on the production of “clickbait” articles such as listicles, which have become talismanic of changing editorial priorities driven by a high-volume, quick-turnaround digital editorial strategy. A number of factors combine to inform a click-led editorial policy which necessitates a very high volume of stories be produced each day to satisfy demand from online advertisers. Due to the continued decline in the value of print advertising and stark falls in revenues from printed newspaper circulations, all major local and regional news publishers have prioritised increasing advertising revenues from digital news. But whereas in the pre-digital age newspaper companies enjoyed high print advertising revenues from a series of largely discrete regional advertising monopolies, the digital advertising market is much less hospitable. Google and Facebook, who specialise in targeted advertising based on valuable search and social media user data, dominate the sector, with credible estimates suggesting that they will earn over 70 per cent of all money spent on display advertising in the UK by 2020 (Jackson 2016).
Useful insights into how these changes affect journalism practice and news content can be gleaned from increased industry-wide debate covered in the trade press and the steady drip-drip of critical first-hand confessional, satirical, and campaigning accounts from serving or former local journalists. From the newspaper editor who reflected on his redundancy in the form of an odd-numbered listicle (Ponsford 2016a), to the “heartbroken” award-winning local news journalist who quit his job because of perceived falling print and online editorial standards (Ponsford 2016b), many local journalists fear that public interest news is being squeezed out by the need to attract website traffic. Managers, such as Trinity Mirror’s David Higgerson, contend that their editorial strategy is simply about “understanding what audiences want”, and that such fears are unfounded. But others, such as CEO Simon Fox have given mixed messages, both downplaying the existence of a democratic deficit, and lamenting the need to do anything about it. Shipton cites a comment by Fox made at a Media Wales staff briefing in 2014 saying the problem with “this democratic deficit stuff” is that “it doesn’t get enough clicks” (Shipton 2015).
A year later, when asked to respond to the BBC’s plans for its nascent Local Democracy Reporter Scheme, he replied that as Trinity Mirror sees it, “there isn’t a democratic deficit” (Turvill 2015).
It is unclear how companies like Trinity Mirror have innovated in their practices to incorporate the use of audience data in use of automated programmatic advertising, and a better understanding is needed of the effects on democratic and civic life. One area of concern that has emerged, however, is the use of real-time audience data on the click-rates of individual news pieces, and the success of individual writers, to motivate (or discipline) journalists and promote newsroom competition. A potential problem with such performance-related data is that it might further de-prioritise coverage of areas of public life which many in the audience might not be interested in, but which is nonetheless squarely in the public interest. There is also a need to explore more deeply the related realm of native advertising, and the potential of such advertorial content to further blur the increasingly fuzzy boundaries between marketing and editorial at a time when media companies are facing very tough commercial challenges. Again, the publishers are insistent that these fears are unfounded, but previous experience suggests it would be wise to monitor closely at what they do, as well as what they say.
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 The sharp drop in profits in 2013 reflects a huge, group-wide, devaluation of the company’s intangible assets (which includes things like relationships with advertisers, the value of a company’s brand, etc).
 These figures represent average weekly full-time equivalent posts reported in audited annual accounts, and represent the most reliable indicator of staffing level changes over time. They include production roles (such as layout and sub-editing). Figures for news journalists alone are not published.
 In 2011/12 the group changed its divisional structure, which means this graph shows data relating to Trinity Mirror Regionals (a now defunct arm of the company composed of only local newspapers and websites) between 2003-2011, and to Trinity Mirror Publishing (a new division combining all national and local newspapers and websites) between 2011-2016. Although the graph refers to two different corporate entities, its common focus is on the proportion of revenues derived from printed and digital news is still useful.
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