CRISIS IN THE LOCAL NEWSPAPER INDUSTRY

Lennox Herald could be victim of digital technology and corona virus crisis

By Democrat reporter

Reach plc, the remote mega publishers of the Lennox Herald and Daily Record, have announced plans to lose around 550 jobs after the coronavirus crisis and the advent of digital technology impacted sales and advertising revenues.

The regional publisher and owner of the Daily Record, Sunday Mail, Daily Mirror and Express newspapers plus the Lennox Herald and a large stable of Scottish local weekly newspapers is to restructure the business to deliver £35 million worth of savings.

The move will see around 12 per cent of the company’s workforce leave the business – with 325 roles across editorial and circulation expected to be axed – as the company aims to switch to a more centralised editorial structure.

Reach said in a trading update this morning (July 7) that it aimed to bring together national and regional teams across print and digital to “significantly increase efficiency and remove duplication” while maintaining the editorial identity of news brands.

The publisher’s regional portfolio in England includes the Manchester Evening News, Birmingham Mail and Liverpool Echo.

The group revenue for the second quarter was down from last year by 27.5 per cent, with print revenue seeing trading down 29.5 per cent and digital revenue by 14.8 per cent.

In an email to staff, Reach group editor-in-chief Lloyd Embley and group chief operating officer Alan Edmunds said “despite the loyalty of many of our readers, the revenue reduction has been significant”.

They added: “We have essentially been hit with three years of impact in the space of three months.”

However, as lockdown eased in the UK, Reach reported some improvement with digital revenue down 4.9 per cent year on year in June compared to 22.5 per cent down in April.

The publisher, which recently announced four new regional websites, has claimed 41 million unique visitors to its websites in May and 2.5m registered customers.

It now has a target of 10m registrations by 2022 which is part of the investment in creating an improved digital customer experience across all newsbrands and products, Reach says.

Plans for a new self-service digital advertising platform for smaller companies were announced and Reach will continue to invest in its automated local news aggregation website InYourArea – which has surpassed 800,000 active registered users.

The publisher said it will begin a 45-day consultation period regarding the reduction in staffing. All temporary pay cuts announced in response to Covid-19 will end with the exception of board members who will continue to take a 20 per cent reduction.

Chief executive of Reach, Jim Mullen said: “Structural change in the media sector has accelerated during the pandemic and this has resulted in increased adoption of our digital products. However, due to reduced advertising demand, we have not seen commensurate increases in digital revenue.

“To meet these challenges and to accelerate our customer value strategy, we have completed plans to transform the business and are ready to begin the process of implementation.

“Regrettably, these plans involve a reduction in our workforce and we will ensure all impacted colleagues are treated with fairness and respect throughout the forthcoming consultation process.

“The plans will provide a stable platform for us to accelerate our strategy, based on stronger and deeper customer relationships, increasing our appeal to advertisers. This will ensure the sustainability and profitability of the Reach business, enabling it to deliver to stakeholders over the long-term.

“Award-winning journalism and content will always be at the core of our purpose. Through the transformation, Reach will realise the full potential of its business model, enabling our news brands to continue to shape the daily conversations of millions of people for years to come.”

Bill Heaney, editor of The Dumbarton Democrat, who has been in the newspaper industry for 60 years, and was a special adviser on regional and local media to the First Minister in 2001, said: “I am really sorry to hear this news, especially in regard to the local weeklies.

“I know the staff there have worked tirelessly since the 1970s and before that too, to keep these papers on the road. They were under the cosh with minimal staffing and investment. It was cut after cut and cut.

“The management at one point was completely out of touch and one managing director wondered out loud how the Lennox Herald managed to sell so many papers in Lennoxtown. He had no idea its readership was in Dumbarton and Vale of Leven.

“The Scottish Government and local authorities must shoulder a large part of the blame for what is happening. They withdrew their advertising and switched it on-line, depriving newspapers of the essential revenue to keep them viable. They came up with £3 million only recently, but it was too little and far too late.

“The SNP are not too on a free press holding them to account and Freedom of the Press is anathema to them in West Dunbartonshire.

“Perhaps the local council here can learn a lesson from this. Austerity doesn’t work. Cuts draw blood and eventually lead to sickness and death. Don’t be surprised if the next step for some of these newspapers is closure.”

West Dunbartonshire Council’s leader of the SNP administration, Cllr Jonathan McColl, refuses to comment to The Democrat.

One comment

  1. The slide in traditional newspaper sales has been relentless. Not so many years ago the Glasgow Herald and the Scotsman used to each sell around 120,000 copies a day. Now they each do around 10,000 copies.

    The economics, like the empty news stands are plain to see.

    So where have all the news paper buyers gone one may ask. Well I think we all know the answer to that. But the maybe more Important question might be as to why it appears that people are not not prepared to pay to read online equivalents of the declining paper press. And maybe, with a few exceptions the answer is that the dying paper editions are not good enough.

    Journalism costs money, or at least good journalism does, and that requires income. The slide in newspaper sales with the concomitant slide in revenues was not unforeseen, or at least it shouldn’t have been save for the blindest of the blind. And yet, the industry, with a few exceptions, appears to have done little to recapture the falling paper sales, preferring instead to keep reducing costs ( and quality ) to maintain margins to the point where many papers are now but a shell of what they once were.

    But journalism, good journalism does sell. Folks want to read commentary, want to read opinion, want to read notices, read obituaries, and that I think is something that does sell – even in today’s instantaneous Facebook and Twitter environment.

    And that is the challenge. The newspaper industry had it too good too long. All to oft owned as playthings of very rich individuals, or by avaricious foreign corporations like the one owns the Glasgow Herald and a whole host of other legacy papers, the papers have been run into the ground.

    But alternatives are now emerging. There are some pretty good new online journals with readership numbers that many of the dinosaurs would give their eye teeth for. Tending towards political themes these journals, which are of better quality than mere blogs, show that people want to read content, want to read commentary, and fair commentary at that.

    If the Dumbarton Democrat can deliver a journal with readership numbers potentially equalling the Lennox Herald or the Reporter, just think what could be delivered if it was given a bit of support from the Council’s advertising budget, or it was accepted as the format for statutory notices.

    Goodness, the Council spend something like £500,000 every year on communication, that doesn’t exactly communicate!

    So could the DD become the local online press that the paper Lennox once was before the asset strippers sweated the paper to death.

    With all change there’s a challenge. People like a read, as the crop of well read new entrant online journals like the Ferret, Wings Over Scotland, Bella Caledonia, Common Weal show. Not everyone is a Facebook Warrior and yes, at the business end of things, the Financial Times and others of that ilk sell well as online subscriptions.

    Time maybe for the journalists to take back control and time maybe that the Scottish Government took a look at how they could assist that.

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