In my opinion: David Hutchison: What future for local newspapers in Scotland?

WHAT future for local newspapers in Scotland? Well, despite the encircling gloom, all is far from lost.

The companies that dominate the local newspaper industry in Scotland and Britain – such as Trinity Mirror, Johnston Press, and Clyde and Forth Press – are still making good returns on their press investments, profit margins of well over ten per cent, which is less than they have been used to making but rather more than many businesses in other areas of the economy are achieving, or have any hope of ever achieving.

And this is not new. What is new is that some of these companies have rather large debts to service. And it’s also clear that, in the good times, some of them were more concerned to go on the acquisition trail and to reward senior executives with remarkable generosity, rather than to invest in journalism and journalists on their papers.

Of course, local papers face very serious challenges, and the declines in circulation which continue year-on-year are alarming, but so far, as the result of cost-cutting, the papers have remained profitable. Though if declines continue at the present rate, neither papers nor profits will be sustained.

Local papers are important for lots of reasons. At their most basic, they give readers information about what is happening in their areas – socially, educationally, politically. They also provide a variety of commercial information through display and classified advertising. They can be forums for vigorous public debate, they can themselves campaign on issues of importance, they can hold those in authority to account. And they can make strong contributions to the creation of a sense of community.

Not all titles do all of these things as well as they might, but the best will aspire to.

The current challenges are easy enough to identify. In the first place the younger generation is not very print-oriented, and this is a problem for all newspapers. Secondly, there is a decline in advertising revenue, partly cyclical – as a result of the recession – and partly structural as the internet’s market share increases (recent figures suggest that the internet now has a 23.5 per cent market share in the UK, while the press as a whole has 29.5 per cent one; source: Advertising Association).

Then, there is the regrettable possibility that local authorities will no longer be obliged to place public notices in the press, but could use the internet instead.

And of course there are alternative sources of news on the net, though not very much of it is local. And papers themselves have created free websites, which compete for customers, customers who do not pay a penny for the service. Council papers – also free to the customer – are thought by some observers to be serious competitors. In all these circumstances it is even trickier than it was in the past to increase cover prices.

Finally, there is the very important content issue: is what is offered in local papers good enough to attract paying readers on a regular basis?

I’ve had a look at the circulation figures of a dozen papers – selected from different parts of Scotland – over a four-year period. Between 2005 and 2009, all the papers concerned showed declines, but the variations are striking. The Airdrie and Coatbridge Advertiser declined by 24 per cent, the Buchan Observer by 20 per cent, the Dumfries and Galloway Standard by 16 per cent. But the West Highland Free Press declined by eight per cent, the Fraserburgh Herald by five per cent, the Annandale Herald by four per cent, and the Shetland Times by one per cent.

There needs to be further research here, and the kind of questions to be asked include these:

* How does chain ownership impact on the quality of a paper?

* How do we explain variations in circulation declines within chains?

* Why are some relatively small papers doing rather better than other larger ones?

* What is the impact of relative geographic isolation on the fortunes of a paper?

* What is the relationship between different kinds of journalism and the trends in circulation?

Perhaps, in these difficult times, a paper which is alive, reflects what is going on in its community, pursues particular issues vigorously and avoids too much of the scrappy, ‘local notes’ kind of content is likely to be best placed to survive.

A paper of that sort can easily see off bland council publications, which any sensible person knows full well need to be treated sceptically.

Whether it can see off the challenge of unpaid-for websites is another matter, and it is clear that not holding the line on charging for access from the beginning was a major strategic error by the press.

Whether Mr Murdoch – or Johnston or the New York Times, which has just changed its policy – can now successfully impose charges remains to be seen. But local websites produced by enthusiastic amateurs will never be a substitute for decent journalism produced by qualified people who know what a good story is, can distinguish between fact and rumour, and who will not expose themselves and their editors to charges of defamation and contempt of court.

It is, however, perfectly fair to ask the companies which dominate the Scottish local paper market whether they have struck the proper balance among dividends, executive remuneration and well-resourced journalism.

If the current decline continues, then the issue of public subsidy may arise, as it already has in the case of regional news provision on Channel three. In Wales, some members of the country’s Assembly have been exploring the idea of start-up finance to help community newspapers fill gaps caused by the closure of Trinity Mirror titles.

Subsidy of the press has always been regarded as unacceptable in Britain, and the experience of Sweden, for example, which has developed a substantial subsidy programme in order to ensure pluralism in the market, has been deemed irrelevant to the British situation.

However, if it becomes clear that without public subsidy, particular titles will disappear, and that this will be very damaging to the communities concerned, then the subsidy option may well be reconsidered.

If it is, then there would have to be very clear, enforceable, undertakings from the newspaper companies on investment in journalism. The same point can be made about relaxing cross-ownership rules, if that issue is opened up again.

The public interest is not to be conflated with the commercial interests of the companies concerned. Pluralism of news sources is crucial in a democracy; a thousand bloggers may provide valuable information and amusement but they are no substitute for professional journalists working in properly resourced and competing news organisations.

And if the Scottish Government now decides that local authorities will be obliged to continue to place public notices in newspapers, then perhaps this give us a historic opportunity to seek guarantees in return, guarantees about the proportion of a company’s income which is spent on journalists and journalism. Some people will cry “political inteference”, but that is exactly what the companies are currently seeking in their campaign against the removal of public notices. There needs to be a quid pro quo.

David Hutchison is Visiting Professor in Media Policy at Glasgow Caledonian University. This is an opinion piece based on evidence he presented on January 20 2010 to the Education, Lifelong Learning and Culture Committee at the Scottish Parliament into the future of local newspapers in Scotland.