Examination of Witnesses (Questions 784
- 799)
WEDNESDAY 14 NOVEMBER 2007
Mr Tim Bowdler and Mr Mike Gilson
Q784 Chairman:
Good morning. Welcome. Mr Bowdler, we have met before.
Mr Bowdler: We have.
Q785 Chairman:
I should say that I was Chairman of Regional Independent Media
which sold you the Yorkshire Post group of newspapers in 2002.
Mr Bowdler: That is right.
Q786 Chairman:
And very good newspapers they were too.
Mr Bowdler: And very good since.
Q787 Chairman:
I am delighted to hear that. Indeed, Freddy Johnston and I served
on The Times in the 1960s when he was starting his journalistic
career. He was a very important man because he signed my expenses!
Mr Bowdler: He signed expenses, yes.
Q788 Chairman:
I should warn you that you are being photographed, but it is purely
for in-house purposes. You are now the third biggest regional
newspaper company in the United Kingdom. There is Trinity Mirror,
Newsquest and yourself. You are all pretty much of a muchness,
I should think, are you not?
Mr Bowdler: Yes. Trinity Mirror have about 21%
of the market. If you measure it by the number of copies sold,
we are at about 15%.
Q789 Chairman:
You have seen a very big expansion over, what, the last 10 to
15 years?
Mr Bowdler: Yes, since the early 1990s, really.
Q790 Chairman:
With your background and your knowledge, tell us how you see the
state of regional newspapers at the moment, the regional press.
Mr Bowdler: If you look at the stock market,
not very good, but the state of the business in many ways is remarkably
healthy. Yes, it is true to say that the advertising markets latterly,
in the last 18 months, have been more difficult for largely cyclical
reasons but, if you put that aside, the industry is investing
heavily in printing hardware, in systems, in content and in journalism,
and of course online, so it is an industry which is remarkably
vibrant, which is working hard to increase its reach into its
communities, and in many ways it is in a very positive mode.
Q791 Chairman:
The regional newspaper industry has ups and downs: it is cyclical.
Do you regard this as one of the downs in the cycle or is there
something more permanent happening whereas, for example, advertising
is going increasingly onto the Internet?
Mr Bowdler: I think the two things are happening.
There is undoubtedly a cyclical downturn. To give you one example,
if you go back two or three years, government were spending very
heavily in the press, not least because a great many jobs were
being created in the public sector. That has changed very radically.
My own view is that it is unlikely to return to the levels we
saw three or four years ago, so you could argue that that is a
structural change. Certainly there are other structural changes.
If you take the motor industry, the dealer consolidation which
we have seen, companies like Pendragon growing through acquisition,
has made a difference to the way in which the large groups will
advertise. So there are both cyclical and structural effects,
and one structural effect is clearly the Internet and there is
evidence of some migration of content online, but it is not the
biggest impact on our business by any means.
Q792 Chairman:
The regional press generally is very dependent upon advertising.
A typical proportion of revenue would be, what, 75-80%?
Mr Bowdler: Yes. The figures we have given you
show that, in 2006, 73% of our revenue came from advertising.
Q793 Chairman:
And that would be the same for other regional groups as well.
Mr Bowdler: Yes, it would be very broadly similar.
Q794 Chairman:
In the health of the regional press, there seems to be a difference
between the big cities and the towns. The regional newspapers
tend to be doing better in the towns than they are in the cities.
I think of the Manchester Evening News, for example, where
that is free, as I understand it, in the middle of the City and
sold on the outskirts. Is that a fair summary?
Mr Bowdler: It depends how you define "doing
better". I think you are describing a rather narrow definition
of "doing better", in that you are focusing on circulation.
If you focus on circulation, it is true to say that the circulation
of the larger daily newspapers, which typically do circulate in
cities, have had a more difficult time than smaller dailies or,
indeed, than the myriad of paid-for weekly newspapers, many of
which we own. The reasons for that, I think, are fairly straightforward
and are two-fold really. The first is distribution. The daily
newspaper has a much shorter shelf life, by definition, than a
weekly paid-for and it is more susceptible to the loss of household
delivery, home delivery. Over recent years we have seen a reduction
in the number of newsagents and certainly a reduction in the number
who are willing to distribute door-to-door. The number of outlets
we have has stayed broadly similar, but we have increased our
supermarket outlets, petrol stations, those sorts of things, and
of course they do not deliver to homes. That is one factor. The
other factor is lifestyles. People's lifestyles have changed quite
radically. People have more leisure choices, more media choices
and less time. People are time-poor. The predominant change we
have seen for the bigger daily newspapers which circulate in the
cities has been a move away from six-day purchasing to a casual
purchasing pattern, and in fact we are not be losing readers at
anything like the rate as we are losing copies.
Q795 Chairman:
Circulation.
Mr Bowdler: Yes.
Q796 Lord Maxton:
Could I clarify something: I assume, Mr Gilson, you do not consider
The Scotsman to be a regional newspaper?
Mr Gilson: It is the national newspaper of Scotland.
Q797 Lord Maxton:
That is right. Within Scotland, both The Scotsman and The
Herald outsell any other broadsheet newspaper.
Mr Gilson: Indeed, yes, by some. We have about
one in four readers of the quality market.
Q798 Lord Maxton:
You are referring, Chairman, to the regional newspapers when at
least part of the Johnson Press is more than—
Mr Bowdler: Indeed, we are a very diverse company:
down to the Pocklington Post and up to The Scotsman.
Q799 Chairman: There
is quite an interesting piece of evidence, which I think is in
the Ofcom figures which they have provided, which seems to indicate
that free newspapers are much more popular in England than they
are in Scotland. Is that your experience?
Mr Gilson: Certainly the success of The Metro
goes across the UK, but, in general, you are right: free newspapers
have not taken hold as much, in terms of free newspapers that
complement paid-for newspapers. Obviously The Metro experience
has been successful everywhere, but, yes, generally speaking you
are right.
| 
