Analytical overview of the newspaper publishing industry in the uk. The WritePass Journal

Analytical overview of the newspaper publishing industry in the uk. Introduction Analytical overview of the newspaper publishing industry in the uk. , there was a 25% drop in the circulation of the daily newspapers in the UK (Smith 2013). Although the rise of the internet has to some extent benefited newspaper publishers through the revenues generated from advertizing on their online publications, the loss suffered by print advertizing has been far greater than the benefits derived from online publications such that it has resulted in an overall negative growth for most of the newspapers (Boczkowski 2005). Also, the value chain of news production, distribution and consumption has been fundamentally affected by the growth of the internet and the ongoing digitization (Leurdijk et al 2012). Whilst most newspapers have launched their own websites and offered blogs and apps for mobile devices, they still have to bear the costs which are significantly high (Leurdijk et al 2012).   Moreover, the huge quantity of information available online has made it increasingly difficult for people to pay for online services. Pay models which have proven to be successful are scarce. The pay-wall model was initially experimented by some of the newspaper publishers but failed as the subscription revenues could not offset the vast loss of advertising revenues that resulted from decline in readership (Leurdijk et al 2012). However, there have been new attempts lately to re-introduce pay-walls for premium content by some of the publishers such as the New York Times, the Hamburger Abendblatt and The Berliner Morgenpost among others (Leurdijk et al 2012).   But still, only a few companies have managed to succeed in developing viable online business models (Miyamoto Whittaker 2005). Perhaps we can say that the newspaper publishing industry is under turmoil due to the penetration of broadband and the rise of new devices for delivering digital content. Consumers are quickly embracing technology and switching to digital media. However, this transition from traditional print media to digital media varies with age (Fenez et al 2010). The younger generation is particularly the most affected. But as noted by Keynote, the impact has also been felt among the older consumers. Of course these changes will tend to benefit the consumers. Such newer forms of decentralized news will liberate readers from partisan news monopolies which have dominated the industry (Currah 2009). Consumers will also benefit from increase in the availability of free news and news consumption that can be tailored to fit own preference (Currah 2009). But at the same time there is a concern regarding the quality of output, in particular, whether the desired output can be sustained by market. It should be noted that, unlike the traditional news organizations, many actors involved in the online content lack the large fixed cost base needed to provide in-depth and varied reporting of news (OECD 2010). In this regard, will vulnerable news genres such as reporting on local government, investigative journalism and reporting on areas not of immediate economic or political interest, survive (Leurdijk et al 2010)? This is an issue that requires further documentation. Current issues and what the future holds Following the recent recession that led to declining business profit, the advertisers budget has today shrunk (Smith 2013). The impact of the recession has been a decline in readership due to high prices of newspapers. Also, the recent phone hacking scandal that implicated tabloid newspapers has undermined trust in journalists and led to a declining demand in major papers (Smith 2013). More recently, the introduction a new generation of eReaders such the iPad, tablet computers and kindles has provided an alternative for accessing information online (Sabagh 2011). With influx of such portable technology, the decline print newspaper is likely to accelerate, adding pressure to the traditional models that have supported many titles (Sabbagh 2011). The impact of these changes has already been felt by a number of local newspapers with 31 titles closing in 2010 (Sabbagh 2011). However, there are those that seem to handle the transition well such as the Financial Times which has seen a growth in digital subscription (Sabbagh 2011). For instance, in 2011, the average print circulation of Financial Times (FT) was 297,227 whereas that of the digital circulation was around 301,471, indicating a 31% increase in digital subscribers (Greenslade 2012). During the same year, the average global audience grew to 2.1m whereas that of the print stayed flat (Greenslade 2012). But while FT has made a successful digital transition, majority of the newspapers have not succeed in developing viable online business models. Given the declining demand, pressure has mounted on newspapers to adopt defence mechanism in order to protect their bottom line (Smith 2011). Publishers have been forced to optimize online advertizing platforms and some others have had to adopt paywalls (Smith 2011). Also, there are those that are opting to expand internationally in efforts to capture a new market in an information-centric society (Smith 2011). The structural challenges facing the newspaper publishing industry have no doubt resulted in a decline in circulation volume and a shift of advertizing to online channels. The growth in information technology is already having an impact on consumption behaviours as reading is losing against listening and watching of news via the Televisions, radios and the internet (ATKearney 2005). The trend is also forecast to continue in the coming future. As pointed out by ATKearney (2005), circulation of newspapers is likely to decline by over 25% in the forthcoming 20 years due to a decline in readership and the growth of digital generation. With newspaper revenue declining, there is a higher possibility of heavy consolidation to occur through company ‘attrition’ and Merger and acquisition activities (ATKearney 2005). The impact of the recent phone hacking scandal is likely to be minimal as popular titles still remain in fair commercial health. Tabloid newspapers such as ‘The People’, ‘The Daily’ and ‘Sunday Mirror’, and ‘Record titles’ in Scotland are still in fair commercial health. However, whilst the Leveson inquiry is expected to have minimal effects on the industry performance, a concern has been raised that the resulting regulation will be unbalanced between print news and that published online (Smith 2011). Conclusion Indeed we have seen that a number of factors have contributed to a decline in newspaper circulation such as recession, new technology (e-readers and smartphones), new internet intermediaries, new business models, and social factors such as increased participation in creation of digital content. These changes have had mixed effects in the industry. On the one extreme, consumers have benefited from availability of free information and consumption of news content which can be tailored to suit their own preferences. Also such newer forms of decentralized news have liberated readers from partisan news monopolies which have dominated the industry. On the other extreme, the traditional print media has been declining and this demise puts at risk an important foundation of democratic societies. 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