Opinion: Alliances, synergies needed for newspaper survival

Posted by Rosemary D'Amour on December 1, 2008 at 11:27 AM

The Financial Times' Ben Fenton muses on the "unpalatable" prospects for newspapers, some radical, that signifies that the industry is "embracing changes that would once have been unthinkable."

During the industry's heyday, Fenton says, no one would have believed a newspaper could have "shared information technology, payroll or personnel functions with a rival group," like that of the UK's Independent.

Newspapers are even sharing printing presses with rivals, Fenton says. Production of Telegraph titles has switched to the presses of News International, the Times' owner.

Media research specialist Enders Analysis states that the number of newspapers sold on an average day in the UK has fallen by nearly two million since 2002, and is expected to drop another two million by 2013.

The same research points out sinking advertising revenue, with analysts saying there will be "no 'out of the woods' moment for the UK national press."

Nine titles from the Independent, Mirror and Express groups could face "divestment or even closure within six years" without consolidation or radical cost savings, the analysis concludes.

With the advent of the Internet, and "an oversupply of newspapers and an undersupply of advertising revenue," newspapers face a difficult decision. The result for papers is a necessity for "synergies and consolidation," and even "alliances across the industry" for survival.

Source: Financial Times