New local news products for the UK: what works elsewhere?Chris Sutcliffe 15th April 2019
The UK’s local news economy is in dire straits. Local newspapers have had their ability to create relevant regional news slowly stripped away as newspaper groups attempt to cut their way to sustainability, and the mishandling of specific local television channels has been a source of controversy over the past few years. In the executive summation of the Cairncross Review, the UK government’s year-long review into the sustainability of journalism, Dame Frances Cairncross noted that the ability of local news providers to make a living among the huge digital giants that now dominate ad spend was far from a given. As the sales of local news titles in the UK has halved between 2007 and 2017, few would argue that it is not an unprecedentedly challenging time for regional news producers.
According to the 2018 edition of Ofcom’s ‘News Consumption in the UK’ report, only 40 percent of people in the UK regularly get their news in print, with less than one in four (23 percent) using printed local or regional newspapers. By contrast, close to half of people (48 percent) get their news from local BBC television bulletins and just under a third (32 percent) doing the same with ITV. That might be why, in the US, the Tampa Bay Times is attempting to use local television to increase newsstand sales (every little helps!).
Far and away the least used source of local news is social media, which Ofcom found was only a source of local news for 16 percent of people. That is likely due to a number of factors, from how few local newspapers actually maintain active social presences, to people’s propensity to use social media instead to communicate with either friendship groups or national news. Concerns about online misinformation are also primarily focused around social media, which may be a slight factor. Even as use of social media increases, its use for local news remains fairly limited.
According to the latest Reuters Digital News report, propensity to pay for news online is still relatively low in the UK, with only 7 percent of people paying for online news. Of those people who are paying or have paid, the vast majority of that spend is going to the national titles who have been aggressively pushing their paywall or membership strategies for the past few years and are now reaping the benefits. Despite that, online local news presents a potential opportunity for media companies as people become more habituated to pay and as technology enables new models.
Hamburg-based Lokalportal are attempting to pull local audiences, publishers and small and medium enterprise (SME) advertisers onto a single platform that offers benefits to all parties, without the intrusion of the big tech players. Lokalportal’s business model is to build up a database of people in a region, in order to help local businesses monetise themselves, with its CEO and founder Sebastian Penthin stating “our business model is to build small digital ad formats for local businesses.” Consequently the 25-strong team is also looking to involve local news titles in the scheme, both to populate the news feed section of the app to help with stickiness, but also to help those publishers generate revenue through the app.
Penthin argues that audiences are looking for ways to play an active role in the promotion of local news and businesses: “We [initially] wanted to build a social network for your neighbourhood. We realised that exchange in your neighbourhood is great, but… people want to know what is going on in their local area and be involved in it.”
That theory is echoed in the ethos behind ABC’S Localish in the US. Jennifer Mitchell, SVP Content Development for ABC Owned Television Stations, told Digital Content Next that: “Audiences also want to connect with the people and places that are important to them, both locally and nationally. Localish becomes the connection point, connecting dots for people and introducing them to things that they might not otherwise have known about. And when we talk about local news and information, we have to recognize that the definition of news has changed and evolved. It is not just about the day’s top stories. It’s about things that are happening near people, where they live, and they want to know about it.”
Consequently ABC has launched a suite of programs and endeavours around Localish, designed to connect its audience with their local surroundings and monetise the results through licensing and “some very successful ad sales deals around sponsorship and branded content.”
While it remains to be seen whether the UK can support either a new digital platform like Lokalportal or a more in-depth television-based endeavour like Localish, their existence proves there is a hunger to connect with and monetise local audiences. It might well be that local newspapers no longer play that role for media companies – or at least not on their own – but that technology will enable new and more effective means of engagement, based on a direct relationship between an audience and their local area.
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work across the media, information, technology, communications and entertainment sectors, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.