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Digital audience for local press heralds a financial ‘tipping point' in advertising revenue
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be the first to commentPosted by Nicholas Jones
After a decade or more of cuts and job losses a growing digital audience is holding out the prospect that local newspapers might soon be reaching a tipping point when online income outweighs the loss of print advertising.
At the launch of a new book on the future of local journalism – What Do We Mean By Local? * – there was one overriding verdict: delivering news first to an online audience is not a threat to local newspapers but the only realistic way to drive up revenues for what should become the local news franchises of the future.
Ashley Highfield, chief executive of the Johnston Press, which has just completed the re-launch of nearly 200 websites attached to over 200 daily and weekly local newspapers, gave an upbeat assessment to a Media Society audience on the 10th October.
“The only question is: 'When is the tipping point when digital revenue growth outweighs the lost income on print?' Perhaps it will be 2016. "In some sections of our business digital revenue now amounts to 15 to 20 per cent of total advertising income; that is up from 10 per cent the previous year and 5 per cent the year before that.
"When that share of revenue becomes 20 to 30 per cent in the next eighteen months or so – a 30 per cent increase year on year – then the rate of growth in digital business will outweigh the decline in print income.
“And at that point we will reach a tipping point when we can achieve a profit without taking out costs; at last it will mean the business can grow."
Highfield reinforced his optimistic note with another key statistic: the growth in the online audience was more than matching the decline in print readership, up from 8.5 million unique users a month two years ago to 14 million.
Steve Auckland, the outgoing group chief executive of the Local World newspaper group, which publishes over 100 daily and weekly titles, said the latest challenge was to increase advertising revenue from the news and information which was being accessed on mobile phones.
One in every two local searches on mobile phones was for local content and surveys shows that 85 per cent of mobile users wanted local information. Local World's latest estimate was that 25 per cent of revenue was from on line but the income from mobiles was “weak" and newspapers needed to build up the mobile audience and advertising spend.
Auckland, who was previously group chief executive of Northcliffe newspapers until they were sold to Local World, believed that the company's 980 journalists had shown the way forward by taking every opportunity to increase the online audience for the websites attached to 107 local newspapers.
“Our newspapers now lead from a digital perspective rather than print. Our journalists lead on line, followed by print and then on blogs.
“We are saying to our journalists this is a great job. You are multi-skilled, you can get Twitter and Facebook to follow your stories and you can see immediately what is happening on line.
“You don't have to wait until the paper comes out next day. You can see the sort of reaction your story is getting within minutes. This is a relationship with your local community.
“We see our teams of journalists as a franchise for their local area. They have to work that area and pull out the local news content."
Auckland's parting shot was that journalists had to understand that social media was their friend; mobiles and the web would spread the message for them that their news content was quality journalism. In future they should see themselves as a local franchise for providing news and information and cement their relationship with their local communities.
* What Do We Mean by Local? The Rise, Fall – and Possible Rise Again of Local Journalism, published by Abramis Academic Publishing (www.abramis.co.uk)
DATELINE: 14 October, 2013
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