Difficult trading times ahead as players grapple with costs and revenues
Print circulations waned – in the first half of the year, the daily market retreated 7.3 per cent, while the Sunday market was down 8 per cent. But almost all newspaper titles in circulation at the start of 2012 were still rolling off the presses as it ended – technically there was one new arrival in the Irish Sun on Sunday, although it failed to match the commercial clout of its predecessor, the News of the World.
In July, the London Independent and its Sunday sister title were withdrawn from sale in Ireland after circulations were deemed too low to justify printing and distribution here. Johnston Press, in the throes of reinventing its local newspapers along “digital first” lines, closed the Offaly Express and the Donegal on Sunday.
Newsprint costs were a factor in the The Irish Times decision to lose an inch off its width as part of a redesign, while production costs necessitated the Irish Independent’s move to cease its broadsheet format. The 30,000-plus active readers of the product will have to choose the compact, another title or stop buying newspapers.
Having concluded that advertising-only digital revenue models don’t add up, both dailies plan to erect paywalls in 2013.
One set of figures from IAB Ireland suggested that growth in online advertising slowed in the first half of the year. What is worse for content producers is that search advertising enjoys a 45 per cent share of the market, while growth in display advertising has been driven by increased ad spend on social media sites.
Paywalls aren’t always a saviour, however, as Thomas Crosbie Holdings has learned from the Sunday Business Post, where subscriptions introduced in 2011 failed to turn its fortunes around.
It has been a tense year for the family-owned group, which has bank debts of €28 million. The crunch came during the summer as the biggest creditor, AIB, appointed KPMG to carry out a financial review. In a court case taken by a dismissed employee in August, TCH lawyers denied it was in “a perilous financial position”.
It could be a grim first quarter as the heavily indebted Independent News and Media is expected to announce redundancies. On the stock market, INM is now going cheap and its 29.9 per cent shareholder Denis O’Brien could buy it or, at the other extreme, walk away. When it comes to what the Irish media industry will look like this time next year, all bets are off.