The move away from print to online advertising continues to take its toll at Johnston Press. The second biggest publisher of regional newspapers in the UK, with journals such as the Scotsman and Yorkshire Post in its stable, saw profits in the six months to June fall to Â£79.8 million from Â£82.2 million in the same period last year.
Revenue was up 18 percent, but only because of the acquisition of the Scotsman. Like for like sales were down 7.5 percent.
The real killer, of course, was the fall in ad revenue. With print advertising down 9.2 percent, the company faces increased competition from the Internet. Web sites such as Rightmove, for properties, the plethora of car sites, and the Internet as a medium for recruitment, means the local paper is seeing its main area for ad revenue fall.
The company, which owns 300 newspapers across the land, is seeing its internet advertising rise – up 13.4 percent, but this is still a small part of the overall business. The problem is compounded by the fact that in the online field, barriers to entry are much lower, whereas, producing and distributing a paper newspaper is hugely expensive and it’s tough for new market entrants.
Most of us appreciate our local newspaper. The push nature of its product guarantees a high viewing (The Internet is known as a pull medium because the end user selects material required – as opposed to having the choice made for them, which is the case with paper and, it has to be said, email media) but the traditional revenue model of advertising is under threat.
On the Internet, pay per click advertising is becoming more popular. This means the advertiser knows what he is getting. A greater mystery surrounds the effectiveness of paper advertising.
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