Thursday, February 14, 2013

Trinity Mirror move to digital focus means 40 fewer jobs

Trinity Mirror's move to a focus on a digital future will see 92 journalists losing their jobs in the company's regional newspaper business.

However, 52 jobs will be created  - 26 at the company's national operation and 26 in the regionals - meaning that the net loss will be 40.

The difference between the value of online advertising and that in the print medium is such that any newspaper company switching its focus from newspaper to digital must make huge cuts to its workforce.

In line with most companies, Trinity Mirror says that new, more efficient ways of working mean that cuts in the number of journalists does not necessarily mean a reduction in the quality of its journalism.

Can that be true? And does Trinity Mirror have any choice?

It is difficult to do direct comparisons with the past because of the number of acquisitions and disposals, but a measure of the collapse in revenues at regional newspaper companies can be found by looking at Trinity's annual accounts for 2000 and 2011 (the most recent available).

Total revenues in the regional business in 2000 grew by 3.7% to £424.7 million.  Last year, they fell by 8% to £139 million. In other words, two-thirds of the revenues have disappeared in the past 12 years.

Revenues have fallen by almost £286 million.  In the 'good old days', profit was £106 million - last year, it was just £16.9 million.

In lots of ways, £16.9 million profit is an amazing performance, but it shows the brutal depth of the cuts that have already been made.  I know the business has changed enormously over the past 12 years, but, if costs had remained at a similar level, the revenue fall of £286 million would have meant the company would have lost £180 million last year!

Add back the £16.9 million profit that the company made last year and you can see that the costs have come down by a staggering £197 million in just 12 years.

Of course, some of these costs will have fallen away naturally: if your circulation falls by 10%, you can print 10% fewer papers (in fact some Trinity titles, like the Newcastle Chronicle, have fallen by more than 50%); if you are selling far fewer advertisements, you can print far fewer pages.

But massive savings have come from reducing staff numbers in all areas of the newspaper.  According to the annual reports for the year 2000 and 2011, the number of people employed in 'production and editorial' has fallen from 6,898 to 3,001 - a fall of 57%.

Again, I have to stress that Trinity Mirror has made a number of acquisitions and disposals during that decade so we are not comparing like with like, but a fall of 57% does not feel out of step with my own experience in the newspaper industry over that period.

(For one view of what the drastic cut in the number of journalists has done to local (and, to a certain extent, national) newspapers, read Nick Davies book, Flat Earth News, which I have talked about on this blog previously)

And that brings me all the way back to Trinity Mirror's statement that changing the way staff work will mean that it can cut the number of journalists it employs without cutting the quality of its journalism.  More than that, while taking out another 40 editorial jobs, the company will launch a drive to increase and improve its digital offerings.

What are the changes that Trinity Mirror will make to create the spare resource to step up its digital work at the same time as further reducing its staff?    They are listed below.  For what it's worth, I think it will simply add to the downward spiral which sees falling revenues matched by cuts in the quality of the product, leading to further falls in revenue ... and further cuts in costs.

So, the changes:
  • Closer working between the national and regional titles, with more content being shared across all of Trinity Mirror's newspapers and digital platforms. (ie fewer local stories)
  • Greater emphasis on the production of digital content, including breaking news, pictures and video.
  • A much enhanced focus in the regional titles on the curation of community content, which has already proved popular with readers. (Plenty of self-interest news)
  • A shared content unit based in Liverpool, producing high-quality, non-local material for all of Trinity Mirror's regional newspapers and digital channels. (Non-local content for the local papers?  What could go wrong?)
  • The creation of a number of new roles at the national titles for writers and photographer/videographers, plus a number of new digital roles. (92 jobs lost in the regional papers, some of the new jobs (26) going to the national titles, means that, in fact, the number of jobs lost in the regions is 66).  However, it does mean that there are 52 new 'digital' roles - jobs which Trinity Mirror thinks cannot be done by traditionally trained journalists - they want people with a wider skill set.
Does that make the decision to go 'digital first' wrong?  I don't necessarily think so - I don't believe that traditional print companies have much in the way of options.  They have to move more and more into digital: it's clearly where the future is.  From the point of view of journalists, those new offerings at a local level are always going to be a smaller business - we will never get back to the situation where cities like Leicester, or even Derby, can support 120+ journalists for a local news service.

The huge classified revenues that supported the cost of journalism have gone online and they don't require the expensive editorial costs to make them work (they sit on standalone sites like Jobsite or Rightmove).

That pretty much leaves the journalists on their own, trying to make a living out of news.  Perhaps people will pay, but not enough to support big numbers.  The newspaper companies will try to keep their papers going to bring in revenues, but without cuts, they would already be making a loss and, as Nick Davies points out, the big publicly quoted companies simply cannot stomach that.

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