I am in Ireland to address the Irish Press Council’s annual general meeting in a lecture entitled “Have newspapers got a future?”
My theme is that they have no future. Declining circulation figures tell us that people are switching week by week from print to screen. It is simply a matter of time before it becomes unprofitable to continue publishing newsprint papers.
Sales aside, the main problem has been the gradual retreat by the major funders of the press: advertisers. Publishers of local and regional titles have been facing that drama for several years. Nationals, however, have done better... until now.
The news that one of the strongest publishing companies, Daily Mail & General Trust, had to issue a warning to investors after its newspaper division reported a 29% fall in profits should be seen as a landmark moment.
It was largely due to a 13% decline in print ad revenues at its titles - Daily Mail, Mail on Sunday and Metro - over a six-month period (with worse likely to follow).
There was some compensation in the growth of digital advertising at Mail Online, up to very healthy £44m, which must be seen in the context of the Mail’s print advertising of £80m.
DMGT’s drama comes against the gloom of announcements by other national publishers, incuding the Telegraph Media Group, Trinity Mirror, and Guardian Media Group. And it follows soon after the print closure of the Independent.
Despite all the prior warnings, a harsh reality has suddenly kicked in. We are in the midst of a crisis.
John Gapper, writing in the Financial Times, did not exaggerate in remarking that “Fleet Street is following Britain’s regional papers and US metropolitan ones in being hollowed out.”
As he pointed out, his own paper warned staff last month of “daunting trading conditions in 2016”. The EU referendum may have had a negative impact, but its effect has been marginal. The trend could not be clearer: advertisers have taken flight.
It confirms what we have long known: the newspaper industry’s business model is wrecked. The inevitable result will be cost-cutting on an even greater scale than has been apparent for the past decade.
And don’t be fooled by the apparent success of the free titles, such as Metro and the London Evening Standard. Despite their high distribution figures, 1.35m and 900,000 respectively, the profit margins are slight. Without shared overheads, I doubt they would survive as stand-alone enterprises.
It is time to recognise that the whole UK newspaper industry is heading for a cliff fall, that tipping point when there is no hope of a reversal of fortune.
It does not mean the immediate closure of papers because the lesson from regional owners is that it is possible to continue publication through cost-cutting. Papers can be produced with skeleton editorial staffs. Indeed, Richard Desmond has been doing that at the Daily and Sunday Express and Daily Star for several years.
Space in newsprint papers can be filled. The end result is something that looks like a paper, but the content lacks any real value. It is not journalism. It is pointless material without any public benefit.
Keep in mind the scenario outlined by Nick Davies in Flat Earth News about “churnalism”, a mixture of agency stories and PR-generated “oven-ready copy”. It will get much worse as newsroom numbers are reduced.
Local paper publishers think it’s magic that they can produce papers on such slim staffs. I think it’s tragic because they are treating their audiences to a fake product.
And, of course, readers gradually catch on and stop buying. The cynical management of decline - maximising profits while reducing the quality of the output - is a vicious circle.
Regional paper cutbacks have cut staffs to such a low level that they are unable to cover courts and council meetings. Instead, the owners have have gone cap in hand to the government and forced the BBC to fund 150 reporters to provide the public service journalism they have turned their backs on.
It is doubtful if this will make any difference to the eventual outcome: the end of newsprint. The oddity is that we have been aware of this end game since the dawn of the digital revolution. But too many publishers and editors have been in denial. The latest fall in advertising revenue across the industry is a loud wake-up call.