Abstract
This study uses 48 in-depth interviews with managers, editors, and reporters at local and regional newspapers and their parent companies in four countries (Finland, France, Germany, and the United Kingdom) to examine how they discuss changes to their business models and the ways their news organizations are adapting to emerging audience-consumption trends in the digital environment. The results show that interviewees continue to prioritize the economic importance of their print products, despite declines in advertising and subscriptions. They also believe that for local news to continue, journalists must better understand the business strategies of their news organizations. Finally, they acknowledge the value of experimenting with new approaches to monetization, including implementing paywalls and using analytics to personalize content. In balancing the merits of their print products with their desire to develop new digital offerings, local newspapers seek to operate as ‘ambidextrous organizations’ that exploit the products of the past while exploring innovations that may help sustain them in the future.
Local newspapers once held enviable and seemingly immovable market positions in their communities in many Western democracies. For decades, these publications relied on a mix of print display and classified advertising – and, to a lesser degree, subscriptions and newsstand sales – to sustain their editorial efforts, benefiting from operating in niche geographic markets (Hess and Waller, 2017). Local clients sought out these publications to run advertisements, in part because they often had few other ways of reaching local audiences. The move to digital media, however, irrevocably affected these relationships, reducing barriers to entry, diminishing pricing leverage for advertisers and readers, and entirely eliminating some advertising categories (Abernathy, 2014). Local newspapers have faced a structural transformation: While their print products decline, digital returns have largely failed to offset the deficit (Nielsen, 2015a).
To counter the decreasing revenues, readership numbers, and newsroom personnel afflicting local newspapers, regional and national publishing companies, which dominate local media markets in many European countries, have pursued a range of cost-cutting measures. Many companies have attempted to maximize efficiency and scale, share resources, and reduce costs through creating centralized newsrooms where local content is edited, produced, and packaged, often in locations far removed from the communities covered (Franklin, 2006). In countries like the United Kingdom, large corporations’ efforts to streamline backend processes, such as production and advertising, have dovetailed with continual announcements of downsizing and closures (Mediatique, 2018).
Research on the changing business models of legacy media often focuses on national and international news organizations, despite the fact that local newspapers represent the most used and the most important sources of news about local public affairs in many local communities, as well as make up much of the newspaper industry and account for a large share of newsroom employment (Nielsen, 2015a). Local and regional newspapers are also experimenting with alternative commercial strategies, including subscription and membership models, native advertising, in-house marketing firms, e-commerce, and events (Ali and Radcliffe, 2017; Hess and Waller, 2017; Jenkins and Nielsen, 2018).
This study examines the discourse of editorial and commercial professionals working for local and regional newspapers to better understand the effects of these trends on local media. Using 48 in-depth interviews with managers, editors, and reporters at local and regional newspapers in four countries (Finland, France, Germany, and the United Kingdom), as well as representatives from their parent companies, we assess how they describe their business models and their perceptions of the ways their organizations are changing to adapt to emerging audience-consumption trends in the digital environment. We also consider the relationship between changing commercial strategies and how interviewees discuss other aspects of their newswork, such as approaches to producing digital news and implications for the role of audiences.
We show that our interviewees: (1) recognize that the traditional business model for local news no longer works (but feel they must preserve it to continue their work), (2) believe that journalists must better understand the business strategies and needs of their news organizations for local news to survive, and (3) acknowledge that evolution requires experimentation with new approaches to monetization. The challenge they face is ensuring that their local newspapers build on existing editorial and other resources while overcoming remnant resistance to developing new digital offerings. In doing so, they operate as ‘ambidextrous organizations’ capable of exploring new opportunities while exploiting existing capabilities (O’Reilly and Tushman, 2004).
Literature review
A fundamental economic challenge facing journalism is that while journalists believe that everyone needs the news, consumers are more content with a limited amount of news and information, particularly if the news directly affects them (Picard, 2018). To survive as a business, local newspapers must find ways to match information with consumers’ needs and interests and demonstrate that the product they offer is valuable. Otherwise, they can only survive on the basis of subsidies, whether provided by the government, philanthropists, or, more ominously, proprietors interested in controlling local news for their own purposes.
Many scholars have highlighted the important democratic roles local media serve in communities. Local media create opportunities for citizens to discuss local issues and propose solutions, offering a form of ‘mediated social capital’ through which they can connect citizens with one another and with those in power (Hess and Waller, 2017). Local newspapers can be considered ‘keystone media’ in many communities, providing news not available elsewhere that other media can build on and repurpose in different contexts (Nielsen, 2015b). More research about the economic challenges facing local media is needed, however, to ‘better understand not just what is lost – including local information and community-building, but also how it can be regained’ (Wahl-Jorgensen, 2018: 165).
Local media and changes in ownership
The newspaper industry in countries like the United Kingdom and the United States underwent a drastic transformation in the 1960s, with national and international corporations taking over national and local titles (Conboy, 2004). Starting in the 1990s, and in the face of declining print revenues, many of these companies began pursuing scale, a strategy that continued into the 2000s (Cawley, 2018). Grappling with fundamental shifts to the business model that sustained local newspapers for decades, companies have focused on cost-cutting in management, production, and distribution to enhance profits and value.
This ‘dispersion’ of the production and distribution of local news reflects its increasingly geosocial nature, in that local news outlets are no longer place-bound but function as nodes in a global media network, sharing information across large geographic and digital spaces (Hess and Waller, 2017: 170). These practices can result in the distribution of news that is increasingly removed from its local context, limiting local reporting opportunities and stifling local newspapers’ ability to fulfill their public-service functions (Franklin, 2006).
A content analysis of four regional newspapers from the same parent company (Schibsted) in Norway found that cuts in editorial operations, including the loss of capital-based correspondents and regional offices and efforts to move to digital business models, led to an increase in local content over regional and national coverage, which focused on lifestyle, consumer, and ‘everyday life’ topics (Sjøvaag, 2015). Journalists at small-market newspapers in the United States suggested that connections to a larger chain can open economies of scale for advertising and technology, but it can also ‘result in a uniformity which doesn’t allow for local flexibility’ (Ali and Radcliffe, 2017). Although scale and scope may be necessary conditions to extend the sustainability of local newspapers, this potential is likely more easily achieved in larger markets (Cawley, 2017).
While some critics contrast the motives of large companies against those of independent and not-for-profit publishers, attitudes about news economics can vary in these subsectors. Harte, Turner, and Williams (2016) found a range of economic perspectives among hyperlocal publishers in the United Kingdom, with some welcoming economic growth and others eschewing it, all underlying a shared civic discourse reinforcing the value of this work to communities. Ultimately, commercial considerations have been a part of journalism throughout its history and shaped the industry in significant ways, such as expanding audience reach and lessening political influence (Nielsen, 2019).
Digitalization and the business of local news
Economic challenges remain in the digital environment, resulting in three key implications for news organizations, as Nielsen (2019) summarizes: increased choice and competition; the rise of third-party platforms, which compete for audiences and advertising revenues; and diversification of business models from a focus on advertising to e-commerce, events, membership models, and other strategies. Interviews with private-sector legacy news organizations in six European countries (Cornia et al., 2016) showed that national news organizations’ investment in digital occurred alongside cost-cutting, although the urgency and extent of these changes varied by country. Many of the newspapers experimented with pay models, including hard paywalls and, in particular, ‘freemium’ and metered models, as well as other sources of revenue, including ‘verticals’ to attract readers; native advertising and branded content; and in-house marketing services, e-commerce, and events. They approached these strategies differently, however, with some strongly investing in diversification, others pursuing them with caution, and still others emphasizing journalism as the core business.
For local outlets, the rise of digital media showed promise, with low barriers for entry and costs of production that could enable cost-effective and in-depth community coverage (Nielsen, 2015a). As local newspapers moved online, however, many invested in digital distribution while reducing editorial staff and coverage, overlooking the potential of exclusive local content for competing online (Chyi, 2013). Meanwhile, the rise of platforms, such as Craigslist (Seamans and Zhu, 2013) – and, more recently, Google and Facebook – delivered further technological shocks, capturing advertising revenue and prompting shifts in newspapers’ business models, such as increased differentiation and subscription rates and reduced display-advertising rates to account for readership declines.
Local newspapers have largely continued to rely on legacy printing and distribution models rather than developing new, sustainable digital revenue models and often have fewer resources to invest in experimentation (Cornia et al., 2016; Jenkins and Nielsen, 2018). While some local news sites report significant numbers of monthly unique users, fundamentally, the online audience for local news remains very limited. In the United States, for example, local news sites attract only about one-sixth of news traffic, just about 0.5 percent of all web traffic (Hindman, 2018: 11).
Many local publishers have attempted to diversify their business models, including experimenting with native advertising and paywalls (Hess and Waller, 2016; Jenkins and Nielsen, 2018). Pay models have particularly taken hold among newspapers in North America and Western Europe (Nielsen, 2019), although they compete with multiple free alternatives (Cornia et al., 2017). Among small, local, and hyperlocal newspapers in Norway (Olsen and Solvoll, 2018), the introduction of a paywall allowed local newspapers to differentiate between high- and low-value news content and collect user data, with some focusing on drawing non-subscribers and maintaining local digital reach (soft paywall) and others emphasizing loyal subscribers (hard paywall).
Publishers can benefit by considering and promoting local news as a niche product (Chyi, 2013). Hess and Waller (2016) argue that a sustainable model of local news focuses not on profit but preservation, even in digital spaces, including finding ways to maintain its civic, social, political, and cultural roles and ‘tapping into the institutions, organizations, social networks, events, and personalities that make up the diversity of local life’ (p. 200).
These varied approaches to the rise of digital media suggest key differences in how news organizations respond to major external shifts affecting their editorial and business practices. For this research, we consider how local media represent the qualities of ambidextrous organizations (O’Reilly and Tushman, 2004), in which leaders commit to refining existing capabilities while exploring new products and services. Innovation in these organizations can occur in three ways: pursuing incremental innovations, or small product improvements allowing them to innovate their operations; architectural innovations, or changes to their processes that affect a key aspect of their business; and discontinuous innovations, or more radical shifts affecting competition in an industry, strategies that can serve current customers and potentially draw new ones.
Business models and journalistic discourse
In this study, we focus on the discourses that editorial and commercial staff members at local and regional newspapers use to discuss their organizations’ commercial practices. News organizations have long emphasized a rhetorical separation between their business and commercial ventures, evident in discussions of ‘the wall’ and church–state connotations, through which journalists ‘apply the language of sanctity to their own behavior, allowing them to bathe their professional values in moral purity and ascribe moral deficiency and uncleanliness to violators of those values’ (Coddington, 2015: 72). Challenges to this boundary, however, have emerged, such as ‘business thinking’ that prioritizes cooperating with the business side of newspapers and inter-media competition (Kunelius and Ruusunoksa, 2008).
The rise of online tools to drive revenues has also blurred these lines, including native advertising, or paid content that mirrors the form and function of editorial content (Ferrer-Conill, 2016). Although legacy news organizations initially suggested a separation between advertising and editorial – an agnostic view – they have since adopted a more symbiotic stance through which they can maintain their credibility by producing high-quality content while drawing readers and revenues (Ferrer-Conill and Karlsson, 2018).
The move to digital platforms has forced journalists to consider the business of news, including the value of content, news audience behavior and preferences, and opportunities for non-market funding (Picard, 2016). In responding to economic imperatives from managers, however, journalists may not act as a homogeneous group, adopting different stances and adaptation strategies (Bunce, 2017; Örnebring, 2016). It is particularly important to assess these trends across countries, organizations, and the commercial and editorial sides of newsrooms. In interviews with newspaper and broadcasting organizations in Finland, France, Germany, Italy, Poland, and the United Kingdom, Cornia et al. (2018) found that rather than emphasizing separation between editorial and business departments, editors and managers embraced a norm of integration, which was associated with an organizational focus on collaboration, adaptability, and business thinking.
In sum, local journalism has to adapt to a structural change from a world in which local media users had low choice and local media had high market power over advertisers to a world in which local media users have high choice and local media have low market power over advertisers (Nielsen, 2019). This study poses the following research questions about how editorial and commercial leaders in local newspapers see their organizations navigating a fundamentally different media environment and a fundamentally different business environment:
RQ1. How do managers, editors, and reporters at local newspapers discuss how their business models have changed as a result of economic and technological shifts in the media environment?
RQ2. What do these discourses reveal about the strategies local newspapers use to maintain existing editorial and commercial capabilities while adapting to an uncertain digital future?
Method
This research is based on a strategic sample of 48 semistructured, in-depth interviews conducted between November 2017 and February 2018 with managers, editors, reporters, and business staff members at local and regional newspapers and their parent companies in four countries. The newspapers selected operate according to different ownership models, including those owned by large national and regional companies, those that are a part of smaller regional companies, and those operating independently. The countries selected also represent different media systems (Hallin and Mancini, 2011 [2004]) and different landscapes for local news. While France and Germany feature robust regional newspaper chains and some weaker individual titles, the United Kingdom is largely defined by national media companies and brands (Nielsen, 2015a), and Finland is distinguished by regional titles and high levels of ownership concentration (Hujanen, 2008). The strategic sample thus gives us data from different professional groups, different organizations, and across different contexts.
Interviews provide a valuable opportunity to assess how professionals understand and say their news organizations are responding to economic instability in the newspaper sector. As Picard (2018) noted, economic perspectives can provide important insights into changes occurring in journalism, how journalists make strategic choices, differences among how various types of media respond, the economic value of news, and perceptions of consumers.
The questions emphasized in the study focused on how respondents described their newspaper’s business model, including the most important sources of revenue, how the business model has changed in recent years, and the role of their parent companies in developing revenue strategies. Respondents also discussed how digital activities contribute to their organizations’ revenues, experimentation with new sources of revenue, and what avenues they see as promising sources of revenue for the future, particularly online.
Sample and procedure
We chose two similar-sized local or regional newspapers in each of the countries: the Huddersfield Daily Examiner and the Kent Messenger (United Kingdom), Kaleva and Etelä-Suomen Sanomat (Finland), Westfalenpost and Main-Post (Germany), and Ouest-France and Nice-Matin (France). We also interviewed representatives from the newspapers’ parent companies (Trinity Mirror, now called Reach, for the Huddersfield Daily Examiner; Keskisuomalainen for Etelä-Suomen Sanomat; and Funke Mediengruppe for Westfalenpost). Two of the newspapers, Kent Messenger (KM Media Group) and Main-Post, are a part of family owned regional companies. We interviewed representatives from other local and regional news companies in the countries as well: NOZ Medien in Germany and Johnston Press, now called JPI Media, in the United Kingdom.
We interviewed staff members at multiple levels of the newspapers, including editors responsible for developing and implementing their organizations’ editorial and digital strategies, section editors, reporters, business staff members, and executives involved with developing editorial, production, and commercial strategies at the company level. Most (41) of the interviews were conducted in person, while the others were conducted via phone or Skype. These interviews are part of a larger project examining the digital transition of local news in Europe.
The interviews, which ranged from 28 minutes to 1 hour and 26 minutes, were recorded and transcribed verbatim. Interviews were conducted in English, with the exception of the two French newspapers, for which we used an interpreter. We analyzed the data using the constant comparative approach (Glaser and Strauss, 1967) and working with NVivo software. We began with primary-cycle coding (Tracy, 2013), a process involving examining the interview transcripts line-by-line to identify initial themes or patterns. This was followed by secondary-cycle coding, or ‘classifying, prioritizing, integrating, synthesizing, abstracting, conceptualizing, and theory-building’ (Saldaña, 2009: 45).
Findings
Analysis of how the managers, editors, and journalists at local and regional newspapers and their parent companies discussed key changes to their business models resulting from digitization and their responses revealed three themes: a recognition that the traditional business model for news no longer works alongside a hesitancy to abandon it, acknowledgment that journalists must better understand the business strategies and needs of their news organizations, and a willingness to experiment with new approaches to monetization.
Still a place for print: Responding to changing business models
The respondents discussed key shifts facing the model that had, for decades, sustained their news organizations, a reliance on advertising and subscriptions, and the impact of continued declines in both, which was evident across the sample. A managing editor with a metropolitan newspaper in Finland said that although readers have been moving online for 20 years, he has only recently seen a rapid circulation drop. He said, ‘Our latest falling down was quicker. It was worse than it has been – 10% – so it’s quite big. [. . .]. It’s just getting worse and worse’. Several editors, in discussing advertising declines, ranging from 14% in Germany to 35% in the United Kingdom between 2012 and 2016 (WAN-IFRA, 2017), and circulation shifts, referenced periods in the 1990s and prior when they saw peak circulation rates, calling them ‘the good old days’ and ‘a gold[en] time for local newspapers’. While they said they recognized that this era and the models that sustained it will not return, and they acknowledged the importance of pursuing new digital strategies, they also described efforts to continue to make the most out of their print products.
All of the newspapers in the sample continued to receive the vast majority of their revenues from print (between 80% and 95%), and editors emphasized the continued importance of print newspapers to their organizations’ survival. An editor-in-chief in Germany, where the regional press remains a prominent part of the media landscape and many readers, particularly in smaller towns, prefer newspapers’ print editions, said:
What I never understood is for colleagues to say, ‘Forget about print. Everything is digital’. For me, it’s a lie because if we would concentrate on digital news, we will die, because we are making, I don’t know exactly, but maybe 90% of our turnover is concerned with print.
This editor said staff members are skeptical about shifting their focus to digital news, but he reinforces that they seek loyalty among digital users in the form of subscriptions, rather than scale. A news editor at a local newspaper in the United Kingdom, which saw the closure of 136 local and regional titles between 2012 and 2018 (Mediatique, 2018), said the biggest challenge his organization faces is ‘keeping the printed newspaper alive’ and determining how to transfer revenue from the print product to the digital.
The chairman of a local newspaper group in the United Kingdom that owns 13 weekly newspapers said one of the major failings of the newspaper industry has been its inability to replicate the print-newspaper reading experience online because ‘When people are looking for something online, they already know what they’re looking for’, while the print product can reveal something new. A lifestyle and supplements editor at this newspaper group said that for small newspapers, print is the ‘bread and butter’, so they would ‘be fools to ignore it’. Similarly, a business manager at a large publisher in France said his digital monetization strategies, including paid local content, are designed to draw more subscriptions to the print product, which remains ‘relatively solid’.
Even with increasing digital news consumption, respondents across the sample said many of their readers are dedicated to the print newspaper and value it as a part of their daily routine, so they do not want to abandon it. However, rates of digital consumption varied, with 85% of audiences in Finland consuming news online, 74% in the United Kingdom, 68% in France, and 65% in Germany (Newman et al., 2018), differences evident in the ways respondents discussed their organizations’ views on how to attract digital readership. A business manager at a Finnish newspaper said readers have a choice of whether to subscribe to only the print newspaper, the online newspaper, or a combination of the two, and his company has worked to make subscribing to online content easier:
If he or she just enjoys the print, it’s okay for us; quite many companies have made that [decision]. It’s always both, and I think it’s better this way. I’m not sure. Am I right?
The business manager said that ultimately, rather than selling a ‘paper paper’ or a digital paper, ‘the selling of content is our strategy’, and readers can choose the product they prefer. A digital editor at a web portal for multiple local newspapers in Germany said she serves a large area that includes rural areas with unreliable Internet access as well as urban areas, so staff members must determine how to ensure print newspapers are available for traditional readers while keeping pace with those who ‘don’t have that fixation on paper; they want to read online’.
Respondents also suggested that many advertisers remain tethered to the print product and neglect opportunities to reach local audiences online. They reinforce the merits of multimedia advertising and work with them to navigate new platforms. As a head of digital business with a regional publishing group in Finland, which has diversified into revenue sources such as digital subscriptions, B2B content marketing, and assisting clients with building ads for Google and Facebook, put it: ‘The legacy business and also printing newspapers is a big part of our revenue and we have to harness it [. . .], but at the same time, we have to start focusing on where to get new revenues’. These responses suggest that managers and editors are holding onto business strategies maintaining the primacy of print – particularly among smaller newspapers and those in countries where print readership remains fairly consistent – to serve declining groups of readers or advertisers while recognizing the need to modernize and diversify their approaches.
The value of shared knowledge: Editorial and commercial cooperation
Many newsroom leaders said they recognize the importance of keeping their newsrooms apprised of economic shifts and how they are addressing them, with some suggesting opportunities for direct cooperation between editorial and advertising staff members, a significant deviation from the ‘wall’ and church–state discourses prominent in many newsrooms (Coddington, 2015). These conversations, however, manifested in different ways, with some newsrooms, such as those owned by national publishers in the United Kingdom, incorporating conversations about business performance into their daily work; German and Finnish publishers creating interdepartmental teams to develop new digital tools, editorial products, and events; and newsrooms in France creating content packages marrying editorial and commercial aims.
An editor-in-chief with a local newspaper in the United Kingdom, owned by a national publishing company, said that each month he shares figures on print and digital performance with the editorial staff so they can consider where and how to grow their audience, such as enhancing sports and events coverage. This emphasis on broadening ‘business thinking’ (Kunelius and Ruusunoksa, 2008) was also evident in the ways many editors and reporters referenced the financial status of their organizations and their outlooks toward monetizing digital content. A managing editor at the same UK local newspaper said that to become sustainable online, the editorial staff at her organization must engage more frequently with the advertising staff, ‘because we’ve got a lot of digital knowledge that they might not. [. . .] We should share it more’. A business manager with a regional newspaper in Germany described a festival the organization hosted for participants in area shooting clubs, a traditional pastime in the area, which reached a target group younger than the newspaper’s average reader, drew significant online traffic, and included a commemorative print magazine. She said the event allowed the marketing department to collaborate with editorial, and they ‘now see edit has good ideas’.
Several managers and editors said developing new strategies for the digital marketplace, such as native advertising, mobile apps, and online subscription packages, requires cooperation between editorial and business staffs. As an editor for digital at a national UK publisher said, ‘working together is absolutely crucial’. A French regional publisher worked to better connect its preferred readers (newspaper club members) with the newsroom through offering opportunities for them to meet subjects of articles and accompany journalists on interviews. The company’s monetization manager said of this arrangement:
We can get them into the habit of coming to us regularly by telling them: If you subscribe to [our newspaper], here’s everything that we can offer you in addition to the paid-for content, but this also gives you access to a certain number of privileges because we want to pamper our readers and our Internet users.
Some larger publishers in Germany and Finland have implemented teams in which editorial and commercial staff members work together to develop new strategies for producing and monetizing digital content. A managing director of digital for a regional publisher in Germany led the creation of a research-and-development hub where journalists and technologists devise tools to attract loyal subscribers, such as WhatsApp newsletters, live commenting features, and tests for mobile usability. He said having a separate unit gives staff members the time and space for innovation apart from the day-to-day responsibilities of a newsroom. A Finnish regional publisher has incorporated ‘startup methods’ into its digital strategies, including a centralized team that works with local newsrooms to develop digital tools. The publisher’s digital business manager said, ‘We don’t have to do the same thing 10 times when we can do it one time and spread it everywhere and then use those leftover resources for other things’. These organizations justify the participation of editorial departments in commercial efforts through emphasizing them as opportunities to leverage editorial expertise while serving audiences.
These practices, however, presented tensions for some journalists. A reporter at a metropolitan newspaper in Finland said the key problem at his organization has been determining how to provide people with news that they feel is relevant to their daily lives. The result, however, can be that they ‘provide people with content that is, perhaps, more interesting than news. [. . .] I’m worried that we’re making ourselves insignificant to our readership’. In many cases, these concerns emerged as generational divides between new and long-time reporters. An editor at a regional newspaper in Germany, overseen by a family-owned regional publisher, said digitization and paywalls are ‘our hope for the future’, but changing the culture for readers and staff members is difficult:
Nothing works without money. And the people are not used to it. [. . .] Our readers are not used to it, to pay for something online. But also the journalists are not used to it, to concentrate online. It’s a generation thing.
Although cooperation between editorial and commercial departments manifested in different ways and with varying levels of integration, respondents across the sample referenced the benefits of these efforts, such as demonstrating their organizations’ ability to adapt to new trends in news production and consumption. The managing editor of a regional German newspaper discussed the organization’s focus on theme-based reporting, through which they identify broad topic areas and determine what stories to cover, whether to use a local or regional angle, and how to monetize the content. He said this ‘new mindset’ ensures the newspaper is ‘prepared to face the future’. A regional news organization in France moved its content online in a ‘spectacular fashion’, as the digital editor described, encouraging all staff members to embrace a digital-first philosophy. Journalists at a Finnish regional newspaper said their plans for ‘premium content’ allowed them to discuss how to enhance and extend their local content, which they said ultimately results in more high-quality output as well as digital revenues and pride for the journalists whose work meets that standard.
Pursuing niche or seeking scale: Implications for content and audiences
Respondents considered the implications of changes to their business models for their editorial content and their relationships with audiences. Specifically, they discussed the tensions associated with seeking scale while working to discern their distinctive role in the information environment. They also addressed the factors in choosing to pursue a loyal user base willing to pay for content over a mass user base driven by traffic. These considerations suggest distinctly local concerns, such as recognizing local content as newspapers’ unique selling proposition, differences in levels of local competition, and questions of whether scale is achieved only at a corporate, rather than title, level. They also suggested differences across countries, with some UK publishers and a French organization pursuing scale to compete with national outlets; publishers in Finland, France, and Germany prioritizing regional growth; and smaller organizations across the sample embracing more focused, locally driven approaches.
Respondents described multiple factors they considered when determining how to make their content valuable to readers, particularly competition at the local level. These responses reflected a willingness to consider news as a valuable product that can be tailored to particular segments and draw younger readers, although some newspapers pursued a traffic-led strategy, namely, in the United Kingdom, and others focused on paid content. A managing editor at a regional newspaper in Finland said that although his organization is the primary provider of local news, competition from local television and other online local information sources means he must focus on producing quality stories that highlight local topics and sources and that are ‘told here’, content that could also potentially be monetized. A journalist at a regional newspaper in Finland said ‘premium’ (paid) stories at the local level should offer an experience that ‘deepens your understanding of life’. An executive editor at a UK local newspaper said monetizing local content is difficult because of competition from free sources. Therefore, people might only be willing to pay for commentary or views from a local expert.
Across the sample, respondents suggested that in addition to providing news content, they could leverage their local knowledge and relationships through other products and services. A business manager at a regional German newspaper owned by a large publisher called her organization’s local knowledge ‘our USP’, which could be applied in editorial pursuits as well as producing special-interest magazines and events. A communications director for that newspaper’s publisher said that rather than considering the organization as merely a newspaper, it is a ‘house of news stories and services’, allowing them to identify what they do best and transfer it to other platforms, such as transitioning from offering classified ads to hosting an online job site. An editor-in-chief at a regional newspaper in the United Kingdom said that local newspapers owned by national publishers combine local editions and centralize production once their advertising revenues drop to a certain point, while her organization focuses on local news as its ‘bread and butter’ because it brings credibility and the local audience. However, to generate revenue, they supplement their news production with other revenue streams, such as building websites, planning events, and providing marketing and public relations services to local clients.
Discussions of how to achieve sustainability in the digital environment often came down to questions of niche versus scale, particularly whether to maximize online traffic and advertising or focus on drawing and monetizing a more loyal, localized readership. An executive editor with a local newspaper in the United Kingdom, which was owned by a national publishing company, said achieving growth while maintaining a local focus was difficult. As an example, she said the newspaper has published stories about the legality of Kodi TV streaming boxes ‘because it affects people, but it’s not about [our town]. You can grow by doing things like that, but it’s a really fine balancing act about [. . .] what we make our main focus’. An editor for digital with the company owning this newspaper said this balancing act is part of the business model, in that his role is to pursue an ‘audience of scale’, which drives advertising, while building an ‘engaged, loyal audience’.
Some news organizations pursuing scale expressed concern about this model, particularly in the United Kingdom. The director of digital for a UK publishing company said his organization operates according to a model in which more paid views leads to more revenue, but many of the local newspapers the company owns will never achieve the scale to ensure long-term sustainability. Rather, he said the long-term approach should emphasize ‘trusted, quality, relevant news’ monetized via a paywall or a ‘datawall’ that allows newspapers to better understand their audiences and target them with advertising and personalized content. A director of emerging products with a UK publisher said that instead of driving scale with one product, news companies should ‘find multiple ways to do what matters’, such as creating niche products or emphasizing a geographic focus. A director for digital with a UK national publisher said that now that his company has built scale, it must focus on reaching specific communities and groups, particularly those that have never been served through online local news.
Other newspapers, particularly independent outlets or those owned by smaller publishers, focused on better understanding their audiences over significantly growing them. A regional newspaper in France, which is owned by its journalists, focused on engaging with its readers and developing valuable content to accelerate subscriptions. As a result, the newspaper publishes local breaking news for free and monetizes long-form solutions journalism, which draws a younger audience and addresses regional topics. Although, as a journalist on the solutions journalism team said, the articles might not generate ‘huge page hits’, staff members use A/B testing to determine what types of stories resonate most with readers. The editorial director for a regional newspaper in the United Kingdom said that in contrast to local newspapers owned by national companies, which publish national stories to draw clicks, his organization prioritizes local news because, ‘It’s what gives us our credibility and our audience’. These organizations, like others in the sample, use data to better understand and grow their readership, but they do so within more targeted groups and locations, limiting their reach but perhaps drawing more loyal readers.
Many respondents said the challenges posed by changing audience consumption habits actually present opportunities. An audience engagement editor for multiple regional newspapers in the United Kingdom said his newspapers are exploring new channels for reaching readers, such as newsletters, apps, and chat groups, rather than relying on ‘one sole, big conglomerate’. He said that in contrast to suggestions that legacy media are resistant to change, in a newsroom setting, ‘you can really see change quite rapidly’. A digital director with a national publisher in the United Kingdom said that evolution is necessary and difficult, but local newspapers are up to the task and may even navigate it more successfully than digital-born outlets:
The reason that we still stand, the reason that we still operate, is the same reason [. . .] tomorrow as it was 200 years ago: that we provide quality content, relevant content, trusted content to people.
A commercial director with a UK regional publisher said his organization focuses on its print and online advertising and has also seen growth in radio: ‘We’ve made them into multi-media customers, and it worked for them’. These responses suggest that while the future of local newspapers and strategies for monetizing digital content is highly uncertain, respondents remain focused on experimenting with new approaches and reassuring their staff members that they are flexible enough to handle continued shifts.
Discussion
The local and regional newspapers in this study derive the majority of their revenues from their print products, recognize the need for journalists to better understand the business strategies of their organizations, and are experimenting with new approaches to drawing digital revenues, challenges that align clearly with the obstacles facing national private-sector legacy media (Cornia et al., 2016). Many managers and editors suggested a nostalgia for a time when display advertising and subscriptions sustained their editorial practices, and they value the readers who prefer this format. These responses reflect respondents’ interest in preserving what has traditionally distinguished their brands – historical presence, professional values, and reader trust – while capturing it online. In some cases, the reluctance to abandon the print-centric business model came from journalists, suggesting a generational divide in newsrooms wherein some managers and editors serve as digital evangelists working to convince their colleagues of the importance of digital content not only editorially, in terms of reaching larger and more engaged audiences, but also to their organizations’ financial stability.
These efforts suggest that managers and editors recognize the importance of making their journalists aware of the economic status of local media and efforts to maintain their sustainability. Many still generate 90% or more of their revenues from print in an environment in which people, especially younger people, are rapidly abandoning print in favor of digital media. The challenge they face is to balance preservation of a legacy editorial and commercial product in inexorable structural decline with the evolution of new, digitally native editorial and commercial products, a challenge that requires what management scholars call an ‘ambidextrous organization’ capable of exploring new opportunities while exploiting existing capabilities (O’Reilly and Tushman, 2004).
To develop this capability and ensure that different occupational groups work together not only on preservation but also on evolution, interviewees across the sample described resorting to increased transparency about revenue performance and efforts to combine the work of editorial and business departments. Journalists monitor analytics to better cater to particular audience segments and suggest new editorial products, examples of incremental innovations; news organizations have developed interdepartmental or distinct research-and-development teams to create new tools for content creation and monetization, examples of discontinuous innovations; and they harness local knowledge in pursuit of completely new products and services, including B2B content, events, and e-commerce, reflecting discontinuous innovations (O’Reilly and Tushman, 2004).
These discourses do not pit a professional orientation against a profit orientation but represent opportunities to pursue dual interests, reflecting the shift from an agnostic view toward the separation of advertising and editorial to a symbiotic stance allowing journalists to maintain their autonomy while ensuring their outlets’ economic future (Ferrer-Conill and Karlsson, 2018). This emphasis represents a survival tactic in which news organizations, to adapt to digital trends, must consider the value of content and the behaviors and preferences of readers (Picard, 2016), efforts many respondents, particularly managers, editors, and newer journalists, saw as opportunities to integrate, collaborate, and adapt (Cornia et al., 2018). In aiming to provide content that audiences will find both informative and engaging – and worth paying for – as well as new offerings (from content marketing to events) that serve and profit from communities, local media provide ‘mediated social capital’ (Hess and Waller, 2017) that connects communities while drawing revenue from their efforts.
Discussions about digital-driven business strategies also involve a tension between scale and niche. Multiple scholars have addressed the problem of print-oriented managerial approaches and corporations engaged in ‘managing profitable declines’ (Cawley, 2018: 6). Respondents in this study suggested a more complex picture, suggesting that their parent companies offer access to economies of scale for advertising and technology, as Ali and Radcliffe (2017) found, and opportunities to share expertise for effectively using digital tools. Despite these benefits, respondents, in both local newsrooms and at the central management levels, expressed concerns about the long-term viability of seeking scale and sought opportunities to find niche groups within mass audiences. Editors and journalists discussed these initiatives hopefully, suggesting that they can use them to remind online readers of the value of local news while demonstrating that local media have the capacity, expertise, and flexibility to innovate. Some newsrooms eschewed scale completely, focusing on drawing smaller numbers of loyal local readers.
Although the local and regional newspapers – and their parent companies – continue to face declines, respondents also expressed optimism about new approaches, recognizing digitization as an important driver of change for legacy business models (Nielsen, 2019). In addition to recognizing the financial value of these projects, respondents discussed their potential for drawing larger audiences and highlighting value-added content, products, and services with local interest. While some newsrooms discussed producing online content in which they feature a national trend that is also recognizable to local readers, which can draw traffic, others focused on monetizing particularly local stories or commentary that cannot be found elsewhere, their ‘unique selling proposition’. This is similar to recommendations that publishers should promote their local news as a niche product (Chyi, 2013; Hess and Waller, 2016) that distinguishes them in a crowded digital marketplace. Although some interviewees questioned the increasing emphasis on producing ‘content’ rather than journalism, a shift that could affect local media’s ability to fulfill its normative aims, a civic discourse (Harte et al., 2016) permeated their perspectives, reinforcing their commitment to serving local readers and reflecting local interests.
Footnotes
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was supported by Google UK as part of the Google News Initiative.