Published on Society of Editor’s website on 16th November 2009:
How is the media surviving the recession and massive structural change? What does the future hold? Who are the winners and losers?
Chaired by: Torin Douglas, Media Correspondent, BBC News
Jim Chisholm, Joint Principal, iMedia Advisory Services
Claire Enders, Founder and Chief Executive, Enders Analysis
One of the world’s foremost media commentators today claimed that newspapers have a long way to go before they become unviable.
In an upbeat speech about the state of the media in the UK, Jim Chisholm argued that there was plenty of room for optimism about the commercial revenues generated by the press.
Chisholm, the Joint Principal of iMedia, a leading global newspaper consultancy practice, told the Society of Editors: “There is no profit problem, only debt problem. Newspapers can decline a long, long way before they become unviable.
“Cutting more staff is not necessarily going to produce more profit.”
Mr Chisholm claimed that current declines are in line with cyclical and structural trends and that profit margins for newspapers could rise from an average of around 10.5 per cent to as much as 27.5 per cent by 2014.
He cautioned that there is little loyalty from readers online and they will flip between different providers so newspapers must learn to work together to increase commercial revenues.
He said: “We all need to examine the value of news in our society.” He added: “I might consider paying for news if I can have access to all the papers.”
Mr Chisholm’s view was contrary to that of Claire Enders, a media analyst for Ender Analysis, who opened the debate with a bleak prediction of the future of the media.
She said: “A double-dip recession in 2010 cannot be ruled out for the UK.
“UK consumption will remain very weak due to the leveraged state of household balance sheets.”
Ms Enders predicted that there will be more “victims of change” resulting from the accelerated decline of newspaper circulation since 2002, arguing that 21,000 media jobs will have been “destroyed” by the time the crisis has bottomed out.
She presented figures that showed average advertising spend has reached a plateau, despite the fact that nominal GDP has been steadily increasing.
The ad revenue problem stems from the growing trend of online media competing with traditional forms of print, even though the average time spent reading a newspaper is 30 minutes a day, while the average online consumption of news is as little as 11 minutes per month.
Ms Enders concluded that pay walls are a feeble attempt to regain revenue and that online revenue will never replace those lost from print.