Out now: 'Pressed to Change: Business model innovation and integration in the British local newspaper industry'

A NEMODE case study

For much of the last decade, industry insiders and commentators have pointed out the need for newspapers innovate their  business models devised in the Industrial Age in order to ensure success in the Digital Age.

Thanks to funding from Nemode, an initiative of the Research Councils Digital Economy theme, I have recently been able to take a closer at just how British local newspaper publishers have responded to the challenges - on industry-wide, organizational and operational levels - through cases drawn from amongst the sector’s largest companies, Johnston Press and Trinity Mirror.

A few of the findings:

On industry level: Integration has been a theme from the start. The industry's initial business model was established through vertical integration with expansion (and increased profits) coming from horizontal integration.

On organisational level: While operational integration has enabled companies to continue to squeeze profits from newspapers, lateral integration with the digital economy has been slow, although under their new CEO Ashley Highfield (dismissed by one indutry commentator as a 'digital airhead') Johnston Press seems to be (finally) recognising that it doesn't help to paddle harder if you're rowing in the wrong direction. The market seems to share my cautious optimism.

Operational level: A close look at newsroom integration at Trinity Mirror's Liverpool Daily Post shows, amongst other things, the journey the company has taken to its latest 'One Trinity Mirror' strategy, which will see the companies newsrooms effectively operating as centres in a news wireservice. Yes, there have been many attempts to do that before, but with TM backing their policies with the IT infrastructure and with the inclusion of the (national) Mirror's archives in the mix, this will be one to watch. Local World (and others) may have similar ambitions, but they'll have a job to do culturally and technically to achieve that. (Aside: the varying fortunes of the 'sub-editor' in all this has been particularly fascinating to see. The TM Newsoom 3.0  positions the production desk as the key custodians of the brands. But I digress...).

This much is clear: Local newspaper publishers have been busy. But, through whichever lens one chooses to look, the results have been uneven. And formidable challenges remain - particularly as audiences shift their access to digital media from PCs to mobiles (Echoing my advice to publishers: 'Get your app in gear!').

 Asked to reflect on her company’s mixed success on the day Trinity Mirror announced its 2012 financial results – which included not only a 75 per cent drop in pre-tax profits, but also a 7.3 per cent slump in digital advertising revenues, Daily Post, Wales editor  Alison Gow (and JLeaders grad), who was also recently included on a global list of 50 ‘female innovators of digital journalism’, noted, ‘You’ve not only got to arrive at the right party, but at the right time.’

And, to continue the metaphor, this study concludes that if the British regional newspapers companies are to survive and thrive, they will need to have the energy and skill to ‘dance’ – and enough willing partners to join them. That is likely to require not only deeper horizontal and vertical integration of organizations and operations (read: more cuts), but also strategies that demonstrate greater lateral integration with the digital economy.

• The full 16-page report, 'Pressed to Change: Business model innovation and integration in the British local newspaper industry',can be downloaded here - and, of course, I'd welcome any feedback and further discussions on the theme.