Today's extract from the republished and updated book on local journalism* is by Richard Tait, professor of journalism at Cardiff university. For nine years from 2003 to 2012 he was director of the university's centre for journalism.
As a working journalist, he was editor of BBC2's Newsnight and was editor-in-chief of ITN. His chapter is entitled "Self-inflicted wounds? The decline of local news in the UK". He deals with broadcasting as well as newspapers, and I have selected only the section on newsprint.
It is easy, perhaps too easy, to portray the problems of local news in the UK over the last decade as simply a process of "structural decline" – the inevitable consequence of the digital revolution and the competitive pressures it has created.
But to see the current state of local journalism as just the product of changing technologies and markets, of social change and cultural trends, is to ignore the role of poor decisions by managements, politicians and regulators that have arguably turned what was always going to be a difficult time for local news into a crisis that threatens the long-term health of UK journalism and undermines democratic accountability.
The crisis we now face is the result of flawed business strategies and public policy failures as well as of changes in technology and society.
A commercial strategy of focusing on a narrow definition of shareholder value as simply the delivery of short-term profits has resulted in a hollowing out of much, though not all, of local journalism.
The history of public policy interventions in the field of local news suggests that the health and quality of local news has not often been at the top of politicians' and regulators' agendas – and that even when they have given the area their attention, some of their interventions have made matters worse, not better.
The regional and local press is paying a high price for a decade in which cost-cutting took precedence over any strategic planning to face the challenge of online media.
Just 10 years ago, local newspaper groups were among the most profitable companies in Britain. For example, Trinity Mirror's regional newspaper group reported a profit margin of 24% in 2003; Johnston Press 35% in 2004. They enjoyed near monopolies in their markets and achieved margins most businesses could only dream about.
Those profits were not invested in either strengthening the print offering or developing online services to ensure local newspapers did not see their advertising revenues migrate to competitor platforms.
The profits came mainly from cost reduction – some from more efficient working practices and economies of scale from greater consolidation, but too much from editorial cutbacks which have changed the nature of much local journalism in the UK, with the closure of many local offices and a growing reliance on agency and PR handout material.
The result – despite the often heroic efforts of editors and their staffs to maintain quality – has been a decline in the capacity of the local press to maintain what had always been its raison d'être – first hand reporting and analysis of local events.
At the same time, local and regional newspaper circulation went into a steep decline – losing nearly 30% of sales between 2007 and 2012. Many owners opted for price increases well above the rate of inflation, which may have accelerated the decline.
In the last five years, the wheels have fallen off this business model. The recession, declining circulation and digital competition for advertising cut regional and local newspapers' income at a rate that increasingly painful cost reduction programmes could not match.
A strategy based on a short-term concept of "shareholder value" resulted in bombed-out share prices.
The irony is that many local newspapers still make money. But in many cases they no longer make enough money both to service the interest on the debts that many of the groups ran up in the years of consolidation and meet the unrealistic expectations of shareholders.
At the same time, the explosive growth of online platforms as the first destination for people seeking news made the comparative neglect of digital media all the more damaging.
In this environment, the choice for many media companies seemed to be between a change of approach or oblivion. The resultant management shake-ups have seen a number of leading newspaper groups appoint new chief executives – in some cases outsiders without previous newspaper experience, but with track records in digital industries.
Johnston Press brought in Ashley Highfield, who had been head of BBC future media and technology and a managing director of Microsoft in the UK; Trinity Mirror turned to Simon Fox, who had previously run HMV.
Both represented a new approach – a significant focus on the digital investment which, they implied, had been largely absent in the past. At Trinity Mirror, Fox was critical of what he described as a "scattergun approach to digital which has neglected the development of our core news brands."
Highfield announced: "We will flip the model to digital first." One of his first initiatives was to launch 140 phone apps for his newspapers. They quickly added 2m unique users. It is too early to say whether this change in strategy is going to work.
Despite the continuing declines in circulation and traditional advertising revenue, the main groups continue to make significant profits. Even with current levels of debt the money should be there to fund more focused and better resourced digital investment – if shareholders are persuaded to accept that the astonishing profit margins of the past will never return.
There are no easy solutions to the problems. There is still no consensus on the paywalls versus free debate; the speed of technological change, such as the current increase in the use of mobile platforms, means latecomers to the game run the risk of coming up with solutions to problems that have already been superseded.
The fear must be that the increase in digital revenues will be too small to compensate for the loss of advertising on the print side of the business and that, regardless of where the revenues are coming from, there simply will not be enough money to fund worthwhile journalism in a digital-first world.
You do not have to be an incurable optimist to see a future in which a smaller number of the larger newspaper groups survive with a more effective digital strategy. As they consolidate, they are likely to leave a space for their more nimble local rivals.
The record of Tindle Newspapers shows that a well managed, debt-free local paper group can still be a successful business proposition as well as serve the local community's needs.
If the industry has been at least partly the author of its own misfortunes, it has not been helped by the attitudes of politicians and regulators. While there will always be room for truly local groups, the bigger players will need to consolidate if they are to have the size and scale to compete in the digital market.
For most of this period the competition authorities have given priority to maintaining plurality in local news provision and local advertising markets, probably beyond the time that that was a sensible approach.
A narrow focus on the newspaper (or radio) market ignores the impact of convergence and the speed at which all the players are heading for similar destinations.
The politicians seem to be ahead of the regulators. In 2011, parliament abolished almost all local cross-media ownership restrictions; the new local television licences were open to broadcasters and newspaper groups on equal terms and the winning consortia have some interesting partnerships and alliances.
Plurality matters, but in a digital world - where the public has already found multiple sources of news beyond the local newspaper or radio station - there needs to be a smarter definition than those that were fit for purpose in the past.
Tomorrow: Peter Preston on "the illusion of the past half century" that local newspapers "can be a massive business"
*What do we mean by local? The rise, fall – and possible rise again – of local journalism is edited by John Mair, Richard Lance Keeble and Neil Fowler. To be published 1 September by Abramis at £19.95. Special offer to Guardian readers, £15, from richard@arimapublishing.co.uk
Media downturn
Regional & local newspapers
Newspapers
Trinity Mirror
Johnston Press
Tindle Group
Media business
Cardiff University
BBC2
ITN
Ashley Highfield
Simon Fox
Digital media
Apps
Roy Greenslade
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