The media sector is a brutal place at the moment, as the Daily Mail and General Trust, owner of that eponymous bastion of lower middle class mores, is finding. It is now cutting 1,000 jobs from its Northcliffe Media regional news arm, and another 500 from the rest of the group. The company admitted it is having a ‘difficult quarter', and anticipates a ‘substantial fall' in profits in the first half of 2009. It will have to tighten its belt still further. DMGT said that its newspaper advertising revenues are expected to drop by nearly a quarter in the three months to March, and to fall at Northcliffe Media by 37%.
DMGT is not the only regional group to have felt the punishing double whammy effects of the downturn and the rise of Web 2.0. Local newspaper group Archant, which owns titles in East Anglia is to cut jobs in Norfolk, and up to a quarter of editorial staff at the Glasgow-based Daily Record and Sunday Mail are going to have to walk the plank. And the Guardian Media Group also announced that it will cut 150 jobs across its north-west papers following a dramatic 85% drop in profits at the regional division this financial year. Earlier this year, DMGT sold the London Evening Standard to Russian billionaire and former KGB officer Alexander Lebedev for the princely sum of £1.
This is unlikely to be the last story of this kind to hit the headlines this year. Boardroom veteran Roger Parry, who last month stepped down as chairman of Johnston Press after eight years, has had a birdseye view of what the credit crunch is doing to the fortunes of regional newspaper groups. It's been a terrible storm to navigate, and Parry is quick to admit mistakes that were made at Johnston Press, once feted as the best-run media company.
‘We should have spent more time on strategy and less on tactics,' he admitted to MT recently. ‘And seen that the past is not a good guide to the future.' Johnston had taken on high level of debt because of its spectacular performance growth but when the recession came and Web 2.0 took hold, it suddenly faced falls of more than 30% in some revenues.
Parry's advice for making it through? Remain paranoid, quizzical and innovative. A lesson for us all.