Media Forum: Is regional model broken?

Should regional press change its business models, Alasdair Reid asks.

One thing's for sure - you can't accuse the regional newspaper business of lacking spirit. Maybe it's something to do with pedigree. The industry timeline on the Newspaper Society website points out that the first British newspaper, The Corante, launched in 1621 and that Berrow's Worcester Journal is the UK's oldest-surviving newspaper having launched in 1709 - and that this evolved out of an even earlier title, the Worcester Postman, which first saw the light of day in 1690.

Regional newspapers know a thing or two about survival. They survived the great communications revolutions of the Victorian era (railways, telegraphy, national newspapers) and the audiovisual wonders (television, radio, cinema) of the century not long gone.

Now, however, they may be facing a challenge too far. Last week, Newsquest, the publisher of more than 180 local newspapers, including 17 paid-for dailies, conceded that fourth-quarter revenues would be 30 per cent down year on year. Its US parent company, Gannett, hasn't published the absolute figures involved - and the issue is clouded by the shift in the dollar-sterling exchange rate. But still. That's an ominous decline.

Last year, it was possible to argue that the medium was successfully battling to balance negatives with positives. Yes, its revenue mainstay, classified advertising, was migrating to the internet - but, to a significant extent, the sites benefiting were regional brand extensions run by the publishers themselves.

The medium's Local Matters Research, overseen by the Newspaper Society, underlined the continuing importance of local issues and community sentiment to people. And this bore political fruit when a Parliamentary Select Committee urged COI to forge better relationships with local and regional media to improve government communications at a local level.

The numbers, though, make sobering reading. Is it time for regional media groups to admit that their business models no longer add up?

Absolutely not, Robert Ray, the marketing director of the Newspaper Society, counters. The underlying picture remains encouraging and optimism is based largely on the extent to which the country tends to trust local media outlets.

He says: "Local platforms have credibility and trust - and that's reflected in the online world too. The websites of regional media owners have more than 20 million unique users - now we're seeing companies such as Newsquest develop their mobile offering. There's a realisation that regional media owners are perfectly placed to deliver a mobile marketing platform."

Ray also points to the Select Committee endorsement as a reason to be cheerful. COI has always been a big user of regional media, Jeremy Found, its head of media, points out. He too is encouraged by the medium's determination to evolve. He says: "These are clearly tough times for regional media owners but I think we're seeing a situation where, compared to the past, they are far more flexible in what they are able to offer, notably their online offering and mobile."

But Darren Guy, the general manager at ZenithOptimedia, says regional media owners will struggle if they don't adapt faster. He elaborates: "I think regional media owners have made mistakes in the whole web area. For instance, they didn't have separate brands for separate functions - like recruitment. I think they missed a trick there. But, yes, there's always going to be a need for local news and you could argue that, these days, people need even more information at a local level. It's just that the regional media owners don't necessarily own that relationship any more."

And John Prentice, the director of PHD's SpaceStation, agrees it'll be tough - but there's every hope they can survive by continuing to fight for share in display and classified markets. He concludes: "If they can do this, then those that manage to retain readers, service their debt obligations and weather the current recession will continue - leaner and less profitable, but surviving."

NO - Robert Ray, marketing director, the Newspaper Society

"Advertisers know there is no better way of connecting with consumers at a local level. National advertisers are becoming better at localising messages and are racking up the importance of local media."

NO - Jeremy Found, head of media, COI

"We've seen regional media owners respond to market conditions by developing into new areas - they're far more able to offer multimedia solutions and their approach is far more creative."

MAYBE - Darren Guy, general manager, ZenithOptimedia

"Regional media owners need to deliver what people want, how they want it. If the model is to buy ever more expensive printing presses, the future might not look so good but there is optimism for those willing to change."

NO - John Prentice, director, SpaceStation

"Regional publishers will continue to push their online offerings but will struggle to monetise this to the degree they could with the printed product. The challenge will be to retain display spend and regain a substantial share of print classified revenue."