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Change, lots of it: Enders Analysis on saving local news in the UK

August 10, 2023 | By Chris M. Sutcliffe – Independent Media Reporter @chrismsutcliffe

For the news media industry, the rise of artificial intelligence for is a double-edged sword. While some publishers are using it to churn out news stories regardless of how their audiences receive them, local news titles are considering how it can provide them with a major point of differentiation. For many, that will also be a lifeline.

A report into the state of local news in the UK from Enders Analysis and the News Media Association pulls no punches. It is clear about the extent to which local news publishers did not benefit from advertising spend moving from print to digital. It’s also candid about the likelihood of titles foregoing print entirely in the near future.

However, the report goes well beyond rehashing the impact of technology on the news media business. While it clearly sets the stakes for the industry, the report, “Signs of local life: a new phase for local media” also focuses on opportunities and collaborative strategies for local publishers as we move forward.

The authors note that “publishers have done very little to transition habitual paying print readers—or the next generation—into habitual paying digital audiences”. It also points out that local media have lost the war on digital classifieds and have no realistic path back to reclaiming that revenue.

That is exacerbated by other challenges facing print media. From higher production costs to the “effective monopoly” of the two major distributors, the ability to print and disseminate dailies and weeklies is becoming strained. The report states it expects the number of titles that go digital-only in the next decade will be greater than the previous 10 years.

As a result of that—and the absolute dominance of tech giants in digital advertising—the report states that appetite for external investment is limited: “No one in the industry would deny all this decline has driven investment sentiment away from the sector, and consequently depressed the value of local and regional media.”

Green shoots

But rather than being solely self-flagellation, the report highlights some of the irreplicable strengths of the UK local news industry. Owen Meredith, chief executive of the NMA explains that, “while clearly everything isn’t rosy, there are some positive signs of life. There is innovation there; DC Thomson [for example] is really good at building a membership model and subscription model that genuinely works in local news.”

As the report makes plain, the greatest strength of the local news industry is the direct relationship it has with its audience, and the trust that flows from its original journalism. It states: “At one time all of these distinctions were obvious because they were visible in the physical world: print was plainly different from other content and consumption. Online, these distinctions evaporate.”

So, the report argues that the local media industry needs to “shout these distinctions from the rooftops” particularly in the emerging era of generative AI-created content. Local news has provenance and personality. The report makes the argument that it will be difficult if not impossible for AI-generated content to take its place. In an age where the amount of noise online is to grow exponentially, local news media can provide the signal.

Meredith says local publishers like Newsquest are already set-up to take advantage of that trend: “We’ve got these huge scale audiences… there’s been a perception that a lot of that was driven by non-core local news.

“Actually, there is more data coming to light now… that you really do have deep engagement, multiple pageviews, reasonable penetration and good scroll-through. People are actually coming to local news sites for the local news product.”

That is in line with the recommendation by the report that local publishers move from pursuing digital advertising based solely on scale: “Too much revenue today is reliant on low-yield programmatic advertising” which has diminishing returns—particularly for the newspapers.

Show me the money

In order to survive to take advantage of that strength, however, local news organizations need time and investment, particularly around tech. Meredith says: Tech is a big-ticket item for a lot of smaller publishers. You can’t therefore do everything you might want to do at once. But I think you can do phased-based tech and there’s a lot of off the shelf solutions, frankly, that provide publishers with answers without massively excessive investment required.”

Given the long-term forecasts for ad spend and a lack of philanthropic support in the UK, the report suggests a number of alternative sources of funding.

In line with earlier recommendations from the Cairncross Review, the Enders report points out that direct government funding is basically impossible for any independent press that seeks to hold the government to account. Instead, it suggests alternatives that include more government advertising (already the largest single source of local advertising revenue across its many departments) with the local press.

Meredith concurs with this assessment, stating: “We think a genuine commercial exchange on advertising is fundamentally different to subsidy. We firmly believe that there is a long-term sustainable future for local news in a commercial way.

“We’ve been talking about the digital markets bill for ages. It’s not a silver bullet, but it will certainly help. There’s lots of elements but you [can] combine that commercial vitality without government subsidy or intervention, as well as the Competition and Markets Authority getting out of the way and allowing market consolidation to happen”.

Meredith is also keen to point out that the BBC has a key role to play in the future of the local press. It is a wholly unique organisation by any media standards, and Meredith argues that if it were proposed today its free-to-access nature means it would be immediately shot down by competition authorities. He advocates for a resetting of the relationship between the local press and the BBC, both through the BBC Local Democracy Reporting Service and other means.

Ultimately, the conclusion of the Enders Analysis report is that local news in the UK needs to make itself attractive to investment from outside the industry. That will be like ripping off a sticking plaster, as it has been resistant to change for years – for a variety of reasons. Executives at the major publishing houses have been accused of riding the slow decline of tested revenue sources in service of their payouts, for example.

True change in order to attract investment will require, as both Meredith and the Enders report advocate, collaboration and collective agreements in order to reach sustainability.

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