Alex Massie

Newspapers and the Credit Crunch

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Some numbers that terrify anyone with any skin in the newspaper game, particularly in Scotland:

Sales of the Sunday Herald are down 15% this year. More worrying still, if not altogether surprising given the state of the global economy, the Johnston Press, owners of the Scotsman and hundreds of local papers, report that advertising sales are down 15% this year. Expect that number to get worse. Two years ago the companies share price was £4.20; yesterday it closed at 19p.

These numbers happen to come from the Scottish and UK (local) market. But they won't be that different from the numbers elsewhere. So there will be more cuts which, in turn, will make it harder for newspapers to stop the slow bleed of circulation which in turn makes it harder to raise revenue from advertising which thus necessitates further cuts on expenditure. And yet management must also deliver "value" to shareholders: the question is what sort of timeframe you use to measure value.

You can't turn readers on and off like a tap, the way you can advertisers, adding them in good times, shedding them in bad. Newspaper buying is a habit that, once lost, is hard to persuade people to return to. It's like the gym: you offer the buggers all manner of rewards and freebies to get them to sign up, but even then most of them let their subscriptions lapse after a couple of months.

Then again, there is this to be said: newspapers have thrown money at new sections and been prepared to countenance any idea - no matter how loopy - in recent years. And not much of it has worked. At best, they're bailing water quickly enough to stay afloat. When the New York Times can't find a way to make a success of it all, then who the hell can? (A question for anther post, another day, perhaps.)

Gloomy stuff. One coule - and might at some point - write more, but here's a grim prediction: at least one, and probably more, major British or American paper will cease publication within the next 18 months.

Written byAlex Massie

Alex Massie is Scotland Editor of The Spectator. He also writes a column for The Times and is a regular contributor to the Scottish Daily Mail, The Scotsman and other publications.

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