Monday 22 November 2010

Newsquest: 'You can slice the salami only so many times before there’s no meat left'

Guest Blog: Former deputy editor of The Argus, Brighton, Frank le Duc on the strike by journalists at the Newsquest-owned paper and the challenge facing the big regional publishers from the rise of new local competition. Frank now runs the Brighton and Hove News website.

Staff at The Argus returned to work this morning after a two-day strike on Thursday and Friday.

Tomorrow they are due to hold a chapel meeting to work out their next move.

On a positive note, the six sub-editors who were going to be made redundant on Friday are among those back at their desks.

But the stay of execution is unlikely to last more than four weeks.

Brighton is not the only place where Newsquest staff have been on strike or are balloting on whether to strike.

And Newsquest is not the only local newspaper company to face unrest.

But allow me to plead what I shall call the Greenslade defence in writing about Brighton as an illustration of what is happening more widely.

I do this in part because it is where I live and in part because I used to work at The Argus as a reporter and more recently as deputy editor.

The demise of local newspapers has long been predicted.

Respected commentators Claire Enders last year and Ross Dawson last month have forecast widespread closures and even extinction, albeit with caveats.

The advent of radio then television, free newspapers, desktop publishing and more recently the internet have all prompted the last rites.

But there are those who would argue that the greatest threat comes from within.

Dan Sabbagh, for example, has been critical in describing the process of “disinvestment” as the big players have chased unrealistically high profit margins.

And the NUJ joined the chorus of condemnation when Gracia Martore, the finance director of Newsquest’s American owner Gannett, said that the British titles made healthy profits.

Newsquest journalists had been told jobs were going because of the harsh economic climate.

The difficulty for companies like Newsquest is that their profits are not coming from a resurgence in advertising revenues but a ruthless cutting of costs.

Newsquest has used a salami slicing technique which has its limitations. You can slice the salami only so many times before there’s no meat left.

Perhaps more aptly you can cut the cost of feeding your goose but don’t be surprised if it keeps laying fewer golden eggs until you end up strangling the scraggy old bird.

If any of the wounds at The Argus have been self-inflicted, it has faced plenty of external competitive threats too.

These range from the launch of the Friday Ad in the Brighton area, which quickly captured the valuable classified advertising market, to the most recent recession.

Three staples of local paper revenues – jobs ads, motors and property – have migrated online but often to commercial rivals.

And if we avoid a double dip, we cannot be sure that those advertisers will return to local papers. After all, their target audience seems to like the searching and filtering functionality of the web.

The structural changes have brought a new fragmentation to a dynamic market not so long after local newspaper publishers borrowed heavily during the corporate consolidation of the 1990s.

Changes in ownership were followed by a drive for higher yields and margins along the lines of the Glazers’ debt-loaded takeover of Manchester United.

In response one group of football fans set up FC United of Manchester (who travel to Brighton for an FA Cup tie next weekend).

The equivalent in local news has been the plethora of community publishers picking up display ads from small traders who find rates for space in papers like The Argus too expensive.

Now their online counterparts are springing up too in places like Saddleworth, Ventnor and Welshpool.

They too can undercut a paper like The Argus – and its website.

The Argus has its brand name advantage. But if jobs and functions keep being relocated to Southampton, another football comparison may be relevant.

When Wimbledon became the MK Dons and relocated to Buckinghamshire, disenfranchised fans responded by setting up AFC Wimbledon.

Like FC United, AFC Wimbledon is on the march.

Yet though the ground is shifting in local newspapers, Sir Ray Tindle has shown that even in a recession it’s possible to be truly local and make good money.

He has been busy launching titles and editions. But his expansionism is unusual. So is his commitment to local communities.

In any case, sites like mine – Brighton and Hove News – are unlikely to displace papers like The Argus (and I’d hate to see the paper fold).

But these sites are adding to the truly local choices available to readers and advertisers.

And as publishers increasingly vacate the towns they purport to serve, they will have fewer eyes and ears on the ground to tackle the growing threat from the web – editorially or commercially.

When I went to the Argus offices to report on the strike it was clear that the journalists there had widespread public support.

Their goose may not yet be cooked but – with so many potential online rivals ready to fill any void – they are plainly anxious that corporate greed should not prove fatal.

Pic: NUJ Argus chapel

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