Memorandum from the
Associated Newspapers and
News International Newspapers are also members in respect of the Scottish
editions of their
2. Our newspapers are currently operating under tremendous pressures. In brief these are:
· long term decline in sales of printed newspapers
· economic downturn severely affecting advertising revenues
· migration of classified advertising to the internet
· 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
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 per cent 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
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 £6.4m 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
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
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
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