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How classifieds and the local franchise are hammering U.K. regional dailies


TTe U.K. daily newspaper industry can be divided into two genres: national dailies and regional dailies. Both genres are feeling pain in the recession, but the local newspapers are feeling the brunt of the pain for two core reasons:

  • Classifieds: Their business models have been disproportionately dominated by classified advertising which was sliding to online sources in the good times and disappearing altogether in the bad times.

  • Local franchise: Their local news franchise is being chipped away by national dailies producing local editions with local content, as well as emerging online sources.

This is peculiar to me – given my perspective on the U.S. market – but that may be me trying to make two puzzle pieces not designed to fit together ... fit together.

In the United States, the three main national dailies are doing fine, the local dailies are doing fine, but the metropolitan dailies are in cardiac arrest.

In the United Kingdom, the 10 main national dailies are doing fine, the local dailies are in cardiac arrest, and the few metropolitan dailies are somewhere in the middle.

One difference in the United States is that national dailies have never been serious about regionalising coverage, and the metropolitan dailies serving vast geographies have pulled back on their distribution areas this decade to save money on distribution and focus strategy on audiences that have value to local advertisers.

The other difference is that if the U.S. regional dailies got a buzz on their reliance on classified advertising the past 30 years, the U.K. regional dailies got outright drunk. The typical local U.S. daily perhaps sees a 30%-40% reliance on classified in the advertising mix. By contrast, the typical local U.K. daily sees 70% reliance on classifieds.

Layer on debt issues (Johnston Press), tricky pension issues (Trinity Mirror), increasing centralisation of decision-making at the corporate level, and the underlying tensions to consolidate even more, and you have a stressed out national newspaper industry.

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