UK newspapers hit by double whammy

The Guardian reports today that three national newspaper groups have seen their newspaper shares hit by fears over a downturn in traditional advertising revenue and the rise of digital. According to the paper

Trinity Mirror, the owner of the flagship daily and the largest regional newspaper group, sent tremors through an ad-dependent industry when it revealed a 12.6% fall in ad revenues over the past two months. Other regional publishers – Newsquest, publisher of the Herald and the Northern Echo, and Daily Mail and General Trust plc (DMGT) – also reported double-digit declines for May. Fears over Johnston Press’s future have been particularly marked with a 45% decline in its share price in just one week.

Fears are now growing that the industry will never go back to what it once was, that the rise of digital has changed the game. According to Sir Martin Sorrell, again in the Guardian

The pressure on the newspaper industry in western European markets is both structural, because of disintermediation by the web, and cyclical because of slowing growth rates. The cyclical part will return, the structural one will not. The simple fact is that more people are reading newspapers or newspaper content online, rather than offline.

There is also clear recognition that the majority of newspaper companies had pushed hard for a rapid growth of their digital business but a real sense that it was too little too late, again from the paper

All the major newspaper groups have sought to safeguard the loss of business by expanding online, not least by acquiring digital businesses. Trinity pointed out last week that digital revenues are still booming in spite of the woes elsewhere. But digital revenues made up just 3.7% of the company’s total revenues last year and 6.7% of advertising revenues.

The Guardian reports that online revenues are due to rise between 4 and 6 per cent. These figures do not tally exactly with those presented recently by Enders Analysis to an AOP board meeting which I attended but the migration of revenue from traditional to digital marketing budgets was clear.

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About John Welsh

John Welsh has spent his entire working life in business-to-business media, first traditional publishing, having edited three magazines over 14 years, and, second, exhibitions since 2007. He started this blog on 22 June 2008 and ended it on 18 May 2010.
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3 Responses to UK newspapers hit by double whammy

  1. Love the blog! Is this idependent of the “UK-based, international B2B exhibition and magazine company” you work for?
    TTFN
    GJM

  2. Simon Parker says:

    It is worth mentioning that part of the reason that these traditional newspaper companies are in such a perilous situation is that they are not structured to have the necessary agility to respond to todays changing environment. Whilst some have changed “too little too late” also applies to the way that companies have responded structurally to this seismic change.

  3. Jane Risby says:

    One of the benefits of waking at 4am is being able to finally check out your blog.
    As we grapple with the future of ink it’s also striking how planning a major title re-design is impacted by our digital futures. Decisions about what to cut, curb and extend in paper now that we have the liberation of a daily news feed and unlimited space in our digital childen, where does the opinion piece sit and how does it differ to the editor’s role on-line, what will look grabbing on both paper and screen to reinforce the brand and is this the end of anything over A4?
    Given the balance of power shift in Tampa, will we be soon be designing our sites first and then knocking out a print version?

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