It’s somehow typical of what passes for debate in many countries these days that the closure of over 2300 pubs in Britain has been widely reported around the world, but the failure and closure of 80 local papers in the same country in the past 18 months has gone without much notice, except in the business pages of some UK media.
The Economist recently reported:
Most of the 80 or so local papers that have closed in Britain since the beginning of last year were the second- or third-strongest publications in their markets.
Trinity Mirror, which owned the Echo, shut 27 local newspapers last year and has already closed 22 this year.
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“The main reason more local papers have not collapsed,” says Paul Zwillenberg of OC&C, a consultancy, is that they were cushioned by large operating margins. Many have gone from annual profits of up to 30% to negligible earnings. As they tip into loss, the trickle of closures is likely to become a torrent. Enders Analysis, a media consultancy, reckons a third to a half may go in the next five years.
Gloomy, and yet the pubs story, reported extensively on the basis of a report from an industry association, got enormous coverage around the world: Bloomberg was typical.
UK pubs are closing at a record rate of more than seven a day, leading to 24,000 job losses in the last year, a lobby group said today.
Closures rose to 52 a week in the first half of this year, from 39 a week in the last six months of 2008, the British Beer and Pub Association said in an e-mailed statement. A slump in the industry has seen 2,377 outlets shut in the last 12 months, costing the UK government more than 254 million pounds ($417 million) in lost taxes, according to the association.
Pubs that focus mostly on food are closing at the rate of one a week as opposed to the 51 drinks-focused outlets that are shutting each week, according to the BBPA.
Of course, the reason for the greater interest in the pubs story is easy: the loss of 24,000 jobs to start with and the fact that it’s beer and alcohol forms a great part of our daily life, more so than newspapers these days it seems. And there’s the claimed loss of tax revenues to the Government by the industry which somehow forgot to point out that people will go and get their booze needs elsewhere.
And yet the UK is faced with more papers dying this year and next simply because the collapse in advertising has been so dramatic, and in more and more cases, final.
Pubs have shut for varying reasons, but smoking bans and financial pressures apparently are a big cause, as is the failure to transform themselves from alcohol dispensaries into places where food and entertainment can be bought. Drink driving laws and the controversy over binge drinking, especially by younger people, is also having an impact. But the recession is also a more immediate factor.
For newspapers it’s a credit crunch and recession, followed by the rise of the internet: the crunch and the slump are amplifying, very quickly, the impact of the way the internet is bleeding news and revenues. And its not just print, commercial TV (ITV) is finding it too expensive to broadcast local news to the areas of the country that it has to be law.
So dramatic has been the impact in the UK that there’s a debate over how the TV licence fee that funds the BBC, will be used to help fund regional news broadcasts on commercial TV: the BBC is already the sole remaining newsprovider in much of regional Britain, though its plans for a series of local news hubs, based on the net (which the ABC here is seeking to follow) has been put on hold.
And some in the UK newspaper industry say that regional newspapers will be able to survive only if the current make up of four big operators, is allowed to become two through the competition regulator, Ofcom, approving such a concentration. The four major operators are Trinity Mirror, Johnston Press (which is broke and negotiating to sell some of its equity to its lenders), Newsquest, owned by Gannett in the US, and Northcliffe, the regional arm of Daily Mail and General Trust (which operates radio stations in Australia: the Vega and Nova chains).
Trinity Mirror is driving much of the rationalisation, according to media reports but Johnston Press has tried to sell its papers in Ireland, but found no buyers. It owns The Scotsman and The Yorkshire Post, and there’s speculation these could be sold at a cheap price to raise cash.
Many of the papers closed in Britain this year have been shut because no one wanted to buy them at a knock down price. Trinity has shut 27 papers and could only sell four in the past year.