"You could be forgiven for being very gloomy about the prospects for the newspaper industry at the present time. Indeed, if you listened to the financial community you would receive a very grim analysis with cyclical declines driven by weakness in the economy exacerbated by the structural challenges which our industry faces. They would emphasise declining circulations and the failure of several recent attempts to sell regional newspaper titles. Share prices have been badly affected; Johnston is at half the level it was at the beginning of the year. One analyst, who chose to remain anonymous, described the industry as being in its "death spiral".
 
I am in no doubt that the gloom expressed by the financial community and others is greatly overdone, much of it based on a poor understanding of our industry.Underlying cyclical trends are obviously something we have to contend with and in some areas of our business we have recently seen weakness in advertising revenues as a result. Whilst there are also structural challenges, migration to websites has not had a significant impact. This has been much more as a result of events like motor dealer consolidation and the sea change in public sector spending levels which has resulted in a dramatic reduction of job recruitment in that area of the economy.
 
Whilst circulations are in decline, this has been largely confined to daily newspapers and most obviously those serving the larger metropolitan areas. Weekly paid-for newspapers which make up a significant part of the UK regional press have suffered relatively little over the past decade and publishers are not sitting inactive watching sales drift away, but are instead launching new titles, targeting geographic and demographic niches and in that way continuing to ensure high levels of market penetration and advertising response. Taking a longer term view, I suspect we will sell fewer newspapers, but, when coupled with these new print launches, we will continue to achieve high levels of market reach which will be further extended by our rapidly growing digital channels. The regional press in the UK has also been investing in modern printing plant and new IT systems which will help to drive ever-increasing levels of operating efficiency, improved quality and enhanced customer service. And, of course, the industry is investing heavily in digital channels which have become an embedded part of the local publishing mix and an extension to our print based activities.
 
I have no doubt that the regional press will play an important role in the media industry for many, many years to come and that print will remain a vital part of the local media mix. As I have said, the print mix will continue to adapt, reflecting changes in market conditions and our new digital channels will expand our penetration into local communities whereby we will reach greater numbers of people than the being newspaper publishers to community media companies which will continue to exploit the huge investment we have in resources on the ground in journalism and our sales people."


Tim Bowdler recently announced he would retire from Johnston Press in 2009, once a suitable successor has been found. In 13 years, he took the company from being a “publisher of small local newspapers with a market capitalisation of £65m to a £700m group with 318 titles,” reported the Daily Telegraph.

Source: Tim Bowdler, CEO Johnston Press