Written evidence submitted by the Scottish
Newspaper Publishers Association
1. BACKGROUND
This paper has been prepared in response to
an invitation by the Select Committee for views on the future
for local and regional media, ahead of its new inquiry.
It is submitted on behalf of the local newspaper
publishing industry in Scotland, represented by the Scottish Newspaper
Publishers Association (SNPA).
2. SNPA—THE
ORGANISATION
The Scottish Newspaper Publishers Association
(SNPA) represents Scotland's local press. SNPA has 13 member
organisations, between them publishing more than 90 paid-for
weekly newspapers and around 30 free papers.
SNPA's current role extends principally to:
— promote, further and safeguard the interests
of its members;
— maintain press freedom;
— advise members on advertising matters;
and
— advise members on current codes of advertising
practice.
3. CRITICAL ISSUES
FACING SCOTLAND'S
WEEKLY PRESS
The Scottish local newspaper publishing industry
is facing the worst media crisis in living memory. Compounding
threats include:
— the economic down-turn and drastically
reduced advertising revenues;
— declining circulation revenues;
— migration of advertising revenues to
the internet;
— government encouragement and sponsorship
of websites geared to divert public sector recruitment advertising
away from the local press to a public sector sponsored website.
Scotland's publishers believe that the COSLA portal will fail
to live up to expectations; it will close off from application
tens of thousands of potential candidates, prove economically
wasteful, as well as undermining the private sector medium which
already delivers the acknowledged route to recruitment. Moreover,
it is suggested that far from attracting candidates from the private
sector, the portal will lead to greater churn and consequential
salary creep within the public sector;
— the diversion of licensing advertising
away from the local press to local authority websites;
— public sector initiatives to pass off
in-house newsletters and/or other communications as editorially
independent publishing ventures. Some of these are part-funded
through advertising sales, encroaching into market space occupied
by the commercial publishing sector;
— the threat that statutory obligations
relating to the requirement for local government to publish Public
Notices might be met in future by a centralised Public Information
Notices website. Scotland's publishers believe that public information
advertising is crucial to local democracy and is a fundamental
duty owed by local government to the communities being served.
Moreover, they believe that the local press already represents
the best means to live up to such a duty—in terms of both
reach (effectiveness) and value-for-money; and
— undermining of the industry's core business
through the encroachment by the BBC or any other broadcaster through
public subsidy, into the provision of local news (diverting audience
and, therefore, advertising revenue away from local newspapers).
The impact of these combined threats will inevitably
encompass:
— job losses: editorial, advertising, production
and management; and
— a democratic deficit arising from the
disenfranchisement of local communities.
4. SCOTLAND'S
LOCAL PRESS—KEY
FEATURES
Scotland's local press is trusted, inclusive
and effective:
4.1 Trust and credibility
Local newspapers are at the heart of the communities
they serve; local people turn to their paper for information they
can trust. UK-wide research bears out the claim that the regional
press is the most trusted media channel.
Research (TNS) revealed that advertising in
local newspapers and their websites is nearly 50% more trusted
and reliable than the nearest everyday medium (58% of sample compared
with commercial television's 39%, national newspapers' 35%, commercial
radio's 31%, and other websites' 30%).
The same research confirmed that advertising
in local newspaper websites is nearly twice as trustworthy and
reliable as national websites (63% of sample for local newspapers
and 53% of sample for local newspaper websites compared with other
websites' 30%).
4.2 Inclusivity
Local newspapers serve the communities in which
they're based, regardless of internet take-up or local broadband
availability. In Argyll & Bute, for instance, NRS data show
that during the year to 30 September 2008, just 36.7% of
the population had accessed the internet, while JICREG data for
October 2008 show that 91.8% had read a Scottish title.
Across Scotland, the overall internet access
penetration for the same period was 55.8% (UK—68.7%) and
the local newspaper readership penetration was 85.6%.
For a government wishing to communicate with
all socio-economic groups, local newspapers deliver the most inclusivity.
4.3 Effectiveness
People live their lives locally. Independent
research in 2005 (GFKNOP) revealed:
— 82% of people spend half or more of their
time within 5 miles of home.
— This rises to 89% for a distance of less
than 10 miles.
And local newspapers play a central role in
helping them to feel part of their community. Independent research
in 2008 suggests that, in Scotland, local media (local newspapers
and their websites) have an important role to help people get
to know others in their area:
— 32% chose the local newspaper or local
newspaper website as their preferred media choice to acquire such
information.
— Only 1% chose a national newspaper.
Local newspapers are well read, relied on for
news not available elsewhere and help readers make the best of
their local area (GFKNOP 2005):
— 90% read half or more of their local
paper.
— 58% rely on their local paper for news
they can't see elsewhere.
— 52% say their paper helps them make the
best of their own area.
Because people live their lives locally, it's
no surprise that some 71% (GFKNOP) of those looking for a job
want to stay in their own area. Which helps to explain why:
— 51% turn first to their local paper to
find out about job vacancies.
4.4 Debate, democracy and public information
The local press is the only mass medium which
informs and stimulates debate about issues affecting people and
organisations in the locality. Scotland's weekly newspapers, therefore,
are crucial to the democratic process.
Because the local press is trusted and reaches
the overwhelming majority of the community, it represents a vital
platform from which to disseminate public information messages
and campaigns.
4.5 Economic prosperity
In addition to its collective contribution to
the economic health of the nation, Scotland's weekly press serves
as an effective catalyst in promoting entrepreneurship and trade
in general, at the local level. It shines a spotlight on those
organisations which are succeeding as well as warning of those
which are failing. Its pre-eminence as a recruitment advertising
medium, for instance, also bears witness to this claim.
4.6 Investment and innovation
Investment by publishers into digital media
development has yielded real dividends for all. These initiatives
benefit from the trust and credibility inherent in the printed
versions. Publishers are investing to develop the complimentary
features of online and offline news ventures.
4.7 Press standards and self-regulation
Scotland's local press acknowledges a duty of
care to safeguard the trust in which local papers are held and
contributes to the costs of self-regulation. Many publishers,
for example, have provided access to the Press Complaints Commission
(PCC) via their own websites as well as carrying directional advertising
for the PCC in the printed titles. The Scottish local press also
helps to fund the Advertising Standards Authority (ASA), and the
Committee of Advertising Practice which publishes the CAP Codes.
5. INDUSTRY VIEWS
ON THE
COMMITTEE'S
IDENTIFIED ISSUES
In its announcement relating to the inquiry,
11 issues were identified, for which views were sought by
the Committee:
5.1 The impact on local media of recent and
future development in digital convergence, media technology and
changing consumer behaviour
The ways in which consumers access news content
have been evolving for decades. The long-run decline in circulations
of national daily, regional and weekly newspaper titles is evidence
of such change. The process has its roots in the advent of commercial
television and, later, community radio. These initiatives helped
to deliver content directly into people's homes. More recently,
over the past 10 years, the internet has ensured that the
pace of change accelerated greatly, with investment in broadband
penetration across the UK significantly reducing download times,
thereby improving the customer's experience.
At the core of the newspaper business has always
been the commercial imperative to offer advertisers access to
audience. Given the plethora of emerging new media opportunities,
it is unsurprising that newspapers' audience share has been placed
under threat of dilution. While these new media channels have
been developing, newspaper publishers have been investing in,
and adapting their own products in order to retain their audience
by harnessing the benefits which online content delivery can offer.
The shift in delivery mechanism from offline
to digital has seismic implications for media owners, journalists,
advertisers and, ultimately, readers. Websites and RSS feeds abound
and offer free content, yet much of this is sourced from offline
publications or is aggregated from other online resources. What's
more, user-generated and blog content has exploded from their
genesis in the readers' letters pages of newspapers. The true
costs of formal newsgathering and content creation, therefore,
remain largely borne in the traditional way by existing players.
One significant way in which newspaper publishers
have been rising to the challenge to the prevailing business model
has been the training of journalists to work across offline and
online platforms. Delivery of high quality content by trained
journalists, irrespective of delivery channel, must be paid for,
yet there are very few examples around the world of newspaper
websites being able to operate on a commercial basis. The industry
is in transition, as new solutions are being explored. The current
economic crisis, with falling advertising budgets, is exacerbating
the problem for publishers.
In summary, advertising and circulation revenues
pay for newsgathering and content delivery. Digital convergence,
the development of media technology, changing consumer behaviour
and the economic downturn are compounding to place those revenues—and,
therefore, local media such as Scotland's weekly newspapers—under
unparalleled threat.
5.2 The impact of newspaper closures on independent
local journalism and access to local information
Scotland is home to around 120 local newspapers;
around 90 paid-for weekly and bi-weekly and 30 free
distribution titles. These papers serve local communities the
length and breadth of the nation, enjoying extremely high penetration
across the socio-economic spectrum.
It does not necessarily follow that a modest
reduction in the number of titles will deleteriously affect local
journalism and access to local information. Efficiencies introduced
through consolidation of some titles, for instance, can enable
newsgathering as well as journalistic standards to be maintained.
The market space occupied by local papers, on
the other hand, is reliant on those papers' relevance to the communities
served. If publishers are forced to close significant numbers
of titles, local journalism will suffer and access to local information
will be reduced, leading to a genuine reduction in democratic
accountability.
5.3 How to fund quality local journalism
Local weekly newspapers represent the training
grounds for many UK journalists. Local papers, in their turn,
are funded by circulation and advertising revenues, principally
the latter. The business model for local newspaper publishing
is entirely transparent and it is self-evident that anything which
damages a publisher's ability to sell papers or space within its
titles or which pushes up its cost base, will limit the availability
of funding for journalism.
If follows that the industry is urging Government
at all levels not to encourage or foster initiatives which seek
to migrate advertising revenues away from their titles. Such migration
cuts at the heart of publishers' ability to deliver trusted content
to local communities.
5.4 The appropriateness and effectiveness
of print and electronic publishing initiatives undertaken directly
by public sector bodies at the local level
The Scottish weekly newspaper industry applauds
efforts by local authorities and other local public sector bodies
to communicate with their stakeholders. Moreover, the industry
is confident that it can deliver unbeatable local household penetration
and excellent value-for-money to assist those organisations in
reaching those target audiences.
It is not appropriate, however, for local authorities
to apply public funds to pass themselves off as independent publishers
nor to encroach into market space occupied by the commercial publishing
sector by selling space in their own offline or online publications.
Local people expect their local papers to hold
public sector bodies such as councils to account. Information
received by the public through a council-owned publication, therefore,
will not be perceived as credible as information read in the local
newspaper. It follows that public sector publishing initiatives
will pass neither the test of appropriateness or effectiveness.
5.5 The role and effects of search engines
and online content aggregators on local media
Local newspapers cover local stories by deploying
trained journalists at the community level. No other medium employs
anywhere near the number of journalists to gather local news and
write local content.
Search engines and websites which aggregate
news content poach the material gathered by newspaper journalists
whose activity, in turn, is funded by publishers. While intellectual
property rights might not being breached, it is clear that such
activity threatens to undermine newspapers' fundamental proposition.
In tackling this issue, publishers are committed
to continuing to invest in their own online initiatives.
5.6 The future of local radio and television
news
Primary newsgathering is expensive and, as argued
elsewhere in this submission, is paid for in terms of local newspaper
publishing through advertising and circulation revenues.
For local radio and television news, the position
is similar. The severe difficulties confronting STV, for example,
are testament to the experience shared in common with publishers
of news organisations having to come to terms with increasing
costs and the rapidly expanding digital provision.
That said, Scotland's newspaper publishers would
be strongly averse to any initiatives which threatened to distort
the market. Specifically, publishers would oppose any further
escalation of the BBC's local news ambitions, funded through the
public purse. Similarly, publishers would oppose any publicly
funded cash injection to support STV-Channel 3 local news
output. SNPA members are particularly concerned that, in a converging
market, Ofcom may back efforts to apply public funds to support
STV, permitting it to gain unfair competitive advantage in the
digital space.
5.7 The desirability of changes to the regulatory
framework for print and electronic local media, including cross-media
ownership and merger regulations
Until regulations on cross-media ownership and
newspaper mergers are relaxed, media owners are denied the opportunity
to identify and reap the rewards of efficiency savings engineered
through appropriate consolidation. Given that such opportunities
are open to other industries, Scotland's publishers are hopeful
that the current review will conclude that the existing regulations
are unjust as well as hugely unhelpful in these exceptionally
difficult times.
5.8 The opportunities and implications of
BBC partnerships with local media
Partnership implies mutual benefit. The publishers
of Scotland's local newspapers, which operate at the community
level, would be pleased to explore the opportunity to work with
the BBC to develop such mutually beneficial partnerships.
There are significant challenges which would
require to be overcome. In objecting to proposals developed for
the BBC Local initiative last year, for instance, SNPA warned
against any licence fee-funded move by the broadcaster to rob
local papers of their audience.
5.9 The extent of plurality required in local
media markets
With digital media, user-generated content,
blogs, RSS feeds and news-based websites, plurality would seem
to be safe and certain. Yet, as argued elsewhere in this submission,
so much of this online content has been assembled from offline
sources or aggregated from other (newspapers and others') websites.
It is, therefore, vital that local newspapers
remain a key news component within the communities they serve.
This is the only medium which trains and employs journalists to
cover stories at the local level. Any damage inflicted on the
local newspaper publishing business would seriously undermine
local media plurality, thereby jeopardising local democratic accountability.
5.10 Incentives for investment in local content
Scotland's publishers employ thousands of journalists
at the local level to gather news and write content for around
120 newspapers and associated websites. They do this without
any public sector financial intervention.
Any intervention, made on behalf of another
media sector such as a public service broadcaster or a public
sector body such as a council would cause publishers serious concern,
as it would be viewed as a deliberate move to create an unlevel
playing field.
Conversely, publishers regard the public sector-sponsored
migration of recruitment advertising away from their titles as
a disincentive for investment in local content.
5.11 Opportunities for "ultra-local"
media services
The authors of the BBC Local proposals defined
the parameters for its "ultra-local" approach to Scotland
in terms of six regional websites. The local newspaper business
in Scotland, on the other hand, publishes some 120 local
titles.
The journalists employed by these papers cover
local council and committee meetings, the courts, schools, businesses,
housing and a myriad of truly "ultra-local" stories.
The stories are researched, written, published
(offline and online) and read within the communities being served.
The medium delivers excellent value to the advertisers who ultimately
fund the majority of the costs associated with newsgathering.
The industry believes that any new entrant to newsgathering at
such a local level should compete on equal terms with existing
providers and should not expect to receive any financial or other
subsidy.
6. WHAT IS
BEING ASKED
OF GOVERNMENT
The Scottish local newspaper industry is not
seeking direct financial assistance from the Government.
It is convinced, however, that irreversible
damage will be the consequence of allowing or, worse, facilitating
revenues to be diverted away from what should be acknowledged
as a valuable component of the Scottish economy and democratic
process.
Publishers would ask members of the Select Committee:
— to acknowledge the many contributions
made to Scottish life by its local newspaper publishers.
— to recognise the severity of the challenges
facing Scotland's publishing industry.
— to do what it can to discourage the UK
or Scottish Governments from legislating to allow local authorities
to divert public information notice advertising away from local
newspapers.
— to help safeguard the level playing field
for media in Scotland, opposing any steps to provide subsidy to
broadcasters for the provision of local news.
— to condemn public sector publishing initiatives
which seek to pass themselves off as independent and-or encroach
into the commercial sector.
May 2009
| 
