I was briefed on a background basis of the management view of the crisis in the regional newspaper industry. The message is a bleak one for regional journalists. Basically web advertising does not generate enough revenue to sustain the editorial staffing levels in the local press and that's why drastic cuts are being imposed.
I was told: "It is proving very difficult to recoup advertising revenues lost from print titles on the web. Online display advertising, which many thought could one day provide sufficient revenues to support journalism, is seriouslychallenged as the vast over-supply of online advertising inventory has forced down yields dramatically.
"This inventory has become commoditised -it is very difficult to get premium rates even on media owners' high-quality websites. In other words, making serious money online is a nut the industry is yet to crack.
"On models - the current business model for local/regional press is simply not delivering the financial backing to support its journalism. Which means a new model has to be found - one with much lower costs, because revenues are falling across the board (for long-term, structural reasons, not just because of the recession).
"Because the biggest cost is people's salaries this means - regrettably - that it is impossible for publishers to make the changes needed without substantially reducing the number of people they employ.
"So the future is publishers that are smaller in terms of costs and, unfortunately, in the number of journalists. This is not a matter of propping up unsustainably high profit margins, it's a matter of commercial viability - and survival."
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