Written evidence submitted by the Scottish
Daily Newspaper Society
1. The Scottish Daily Newspaper Society
(SDNS) is the representative body for the publishers and editors
of seven major groups including Aberdeen Journals, D C Thomson
& Co Ltd, Herald & Times Group, Scottish Daily Record
and Sunday Mail Ltd and The Scotsman Publications Ltd whose 13 titles
can be described as Scottish national and regional press. They
account for aggregate weekly sales of over 6 million and
in addition deliver over 5.1 million online unique users
Associated Newspapers and News International
Newspapers are also members in respect of the Scottish editions
of their UK national titles which are understood to be outwith
the remit of the inquiry. This submission therefore relates solely
to what might be termed the indigenous press.
2. Our newspapers are currently operating
under tremendous pressures. In brief these are:
long term decline in sales of printed
economic downturn severely affecting
migration of classified advertising to
the internet; and
changes in communications technology
with instant news available from online publications, video, mobile
technology, podcasts etc.
We are suffering from a cyclical downturn as
well as structural change. The impact of this combination has
resulted in sharply deteriorating revenues necessitating action
to reduce costs including, regrettably, the loss of jobs.
3. In order to address these challenges,
our respective members have invested substantial resources in
their digital publishing operations which are now firmly established
as an integral part of the publishing mix. While this investment
is yielding significant growth, digital revenues generally are
still at the stage where the represent a relatively small proportion
of total income.
4. We are seeing a period of enormous political,
economic, social and technological change. Those four key variables
affect consumer behaviour. Twenty years ago there was no internet.
There was no "Metro". The media landscape has changed
beyond recognition and it continues to change at a rapid rate.
The key strategic challenge for the industry is its ability to
adapt and to innovate. The industry is doing that with technology
at the heart of innovation in helping to streamline the business.
Consumer behaviour has changed dramatically.
The reduced frequency of buying newspapers and multiple copies
of newspapers is having significant effect with people perhaps
buying one daily newspaper three days rather than six days a week.
5. As yet, there have been relatively few
newspaper closures in Scotland and those which have gone have
been free weeklies which of course are most vulnerable in a depressed
advertising market. Therefore access to local information is substantially
undiminished due to the continuing availability of paid daily
and weekly newspapers.
6. Quality journalism and content are key
to the success of newspapers. News gathering, however is expensive
and it is inevitable that the number of journalists employed will
be influenced by advertising and cover price revenues. As indicated
earlier, sharply deteriorating revenues, which have been of the
order of 35-40% for many publishers in the first four months of
2009 compared to the corresponding period in the previous
year, have necessitated action to reduce costs including a reduction
in the number of journalists employed.
7. The industry's problems in Scotland are
exacerbated by the loss of local authority recruitment advertising
to an electronic portal operated by the Convention of Scottish
Local Authorities (CoSLA). Based on analysis of advertising expenditure
by the Scottish public sector relating to 2005-06 the loss
of local government recruitment advertising will cost the newspaper
industry £13.5 million. It is our strongly held belief
that daily and weekly newspapers and their online services have
long been an essential meeting place for people seeking new employment.
It is our view that any financial savings claimed by CoSLA need
careful scrutiny against the value and effectiveness of securing
the best people through the services of the newspaper industry.
We are also deeply concerned that the Scottish
Government plans to bring forward regulations to allow for the
publication of public information notices electronically. They
will remove the obligation on local authorities and others to
place public notices in regional and local newspapers, estimated
to be worth £6.4million in 2005-06 according to the
analysis referred to in the preceding paragraph. We consider that
there would be a serious risk of such action leading to more secretive,
less open government and to many grass roots issues being decided
without consultation and debate.
Broadband take-up in parts of Scotland is quite
low eg 32% in Glasgow according to Ofcom's Nations and Regions
survey in 2008, and compares extremely poorly against the household
penetration of newspapers. We do not understand how the Scottish
Government could contemplate disenfranchising large numbers of
the public by relying on less effective information channels.
More generally, we are concerned about local
authorities and other public sector bodies using their privileged
position of public funding to provide services fully met by daily
and local newspapers operating in a commercial environment to
generate revenues based on audience reach. They can have a profoundly
negative effect on the financial viability of our newspapers and
their related websites.
8. We do not seek public subsidy for newspapers
nor do we believe that local radio or television should receive
subsidy to provide news. It greatly concerns the SDNS that Ofcom
may be contemplating a pilot project offering a subsidy to STV.
We would object in the strongest possible terms to what could
only be construed as a serious distortion of the market. The company
dismantled the former Grampian TV news gathering operation, yet
here it is seeking taxpayers' money to expand its local news provision.
In effect it wants to restore what it destroyed.
All sectors of the media should be competing
on a level playing field and while that may not be possible because
of the uniquely privileged position of the BBC that distortion
of the market should not be exacerbated by Ofcom giving any credence
to the begging bowl approach of a commercial operator.
Last year the Scottish Broadcasting Commission,
appointed by the Scottish Government, came out opposing public
subsidy to STV for providing what it called a bare minimum of
Scottish content in return for the benefits of remaining in the
public sector broadcasting framework.
9. We have made representations to the OFT
that the rules on newspaper and cross-media ownership and competition
need to be amended to take account of the realities of the Scottish
media landscape and to allow flexibility in meeting the exceptional
circumstance in which the industry find itself.
10. We are extremely wary of partnerships
with the BBC. The truth of the matter, at least in Scotland, is
that the BBC employs relatively few journalists in the field compared
to the Scottish newspaper industry and for many local stories
the BBC actually feeds off newspapers.