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Pressing issue: Covid 19 effect means the media crisis is now 'deadly real'

Why advertising slump poses existential risks for Irish news producers


Read all about it: The news media landscape has altered radically since the days of street vendors

Read all about it: The news media landscape has altered radically since the days of street vendors

Challenges: Sean Mahon of the Southern Star believes local papers have always been resilient

Challenges: Sean Mahon of the Southern Star believes local papers have always been resilient

Emma Jervis


Read all about it: The news media landscape has altered radically since the days of street vendors

The Covid-19 onslaught has created an accelerating existential crisis for all media outlets, smashing through advertising revenue across platforms and in some cases shutting shops and locking in consumers who want to buy a newspaper.

Ironically, the wave has hit at a time when the proliferation on digital social media of conspiracy theories and false reporting means that, arguably, the need for verified information delivered by accountable sources is more important than ever.

Even before the pandemic, 'The Southern Star' was a rarity in the media world.

The 130-year-old Skibbereen-based regional newspaper remains family-owned in a world where media control has been increasingly gobbled up by big consolidators in the past two decades.

As the costs of media technology have risen and margins come down most local papers and radio stations are now part of bigger groups, with multiple titles under their umbrellas. Most national titles also belong to bigger groups and increasingly have international ties.

"The economy was going well for the last few years," says Sean Mahon, managing director of 'The Southern Star', which serves the west Cork community and had an average pre-pandemic circulation of about 10,000 copies a week - a figure boosted in summer months, with the area a magnet for tourists. With 21 staff, the paper is owned by the local O'Regan family.

"All businesses and most papers had benefited from that in terms of advertising," he says.

"There were still obviously the challenges that we've all faced - both nationally and locally - about trying to maintain circulation.

"We've been trying to develop ways to bring in revenue via our digital platform and, not that this was going to be an overnight solution, but I felt that we were starting to make progress in building our digital audiences and starting to convert some of that into revenue from local advertisers and other brands."

Mahon says that local newspapers have always been "very resilient".

"I felt that, looking five years ahead or 10 years ahead, the more progressive local newspaper businesses would continue to evolve, continue to survive and continue the important role that they have locally," he says.

"But obviously something like the Covid-19 crisis is a crisis that's affecting all businesses, not just our industry, and so it's a case of absolutely trying to find a way to navigate through this."

The scale of the challenge facing media outlets is truly unprecedented but its come on the back of major trends - like the shift to digital media consumption and the even more challenging gobbling up by global technology giants of national and even local advertising revenue.

Accelerating some of those trends means the long-term impact of the pandemic might forever change how we consume news and information and the viability of the industry that produces it.

For the media sector, those changes had already been evident for years.

The pandemic has accelerated the evolution, with an ever-changing media genome challenging a sector that was already struggling to find ways to generate the kind of revenue and profits it needed to survive.

For now, for most, it's about survival mode.

Last month, Iconic Newspapers, one of the country's biggest local newspaper publishers, said it was laying off dozens of staff for six weeks, putting a total of 100 jobs at the group at risk.

Controlled by UK businessman Malcolm Denmark, Iconic publishes 22 titles, including 'The Limerick Leader', 'The Longford Leader' and 'The Kilkenny People'.

Elsewhere, Celtic Media, the publisher of 'The Connaught Telegraph', 'The Anglo Celt', and other titles, has laid off a number of staff - temporarily it hopes.

Big national media groups, including the Journal.ie publisher, 'The Irish Times', Communicorp and Independent News & Media - the publisher of this newspaper - have temporarily laid off staff, reduced hours or cut pay to cope with a sharp decline in advertising revenue during the crisis.

On Wednesday, national broadcaster RTÉ confirmed it will avail of the Government's Temporary Wage Subsidy Scheme because of the hit to its commercial and TV Licence revenue since the Covid-19 outbreak.

In a memo circulated to staff, RTÉ Director-General Dee Forbes said the broadcaster's revenue could collapse by 25pc to 35pc this year.

Alan Cox, CEO of Core, Ireland's largest marketing communications company, whose primary business is that of an ad buyer, says total advertising spend here will fall about 30pc this year from just over €1bn in 2019. That includes a decline of up to 60pc for May and June, he says.

"We expect that come July and August, the fall in advertising spend will be not as deep as May and June - perhaps 35pc to 40pc - and then for the last four months of the year, we'd expect it to be about 15pc to 20pc down," he says.

"This is an enormous economic shock and it's going to lead to a deep recession, but I do expect that the growth will return faster than in previous recessions because of the concerted efforts of the governments of the world and the stimulus that they will, in an integrated way, put in place," Cox predicts.

He thinks that the world will eventually revert to being much the same as it was before the crisis, with subtle differences that will see more use of technology, for instance.

But will this recovery - and the eventual return of advertising spend - come too late for local and regional media in particular?

For some, it might. But Cox remains optimistic about the sector's longevity, despite the death knells that have been sounded on many occasions.

"There's always going to be demand and a necessity for local and national media," he insists.

"The role that national and local media play in this country is of massive importance to our society, our culture, our democratic reporting and making sure that all of those things are protected.

"I think there'll be both a requirement at a national level to consider policy that encourages that, and also I believe the demand will always be there in the country for those outlets," says Cox.

"The problem is the viability," he warns. "Each of these crises that occur really batter those organisations, and in some cases right to the very edge. It's really important for the Government to take a look at the entire ecosystem of the Irish media market and engage with all stakeholders to consider its importance and what policies are required to protect it in the future."

Newsbrands Ireland, a lobby group for newspapers, has argued that slashing VAT to zero for news products, in line with the UK, would help underpin the industry.

But there's also the cold, hard commercial reality: private media outlets - just like any other business - are there to make a profit. If they can't, capitalism dictates they should fail.

Yet it's a simplistic view. Look at how taxpayers bailed out the banks, or the supports the farming sector gets, says John Purcell, chief executive of KCLR, a station that broadcasts to Kilkenny and Carlow, as well as the chairman of the Independent Broadcasters of Ireland which represents about 34 stations.

A banking collapse posed a systemic risk to Ireland's very economic and social fabric.

Farming, at least, can be seen as potentially important for security of domestic food supply.

So where should the line be drawn post-crisis? Which businesses get life support, which ones don't?

"There has to be a mature think," he adds. "You're running a business that is a commercial concern, but it is providing an essential service.

"We've never looked for subsidies or support in relation to everything we do, but just in relation to the critical news and current affairs, which we're obliged to provide."

"None of the issues that are applicable to the survival of the media in this current crisis are new," says Purcell. "They just need to be dealt with, with urgency. This is deadly real.

"We're not just putting on the poor mouth. This is a crisis. There's no question of the benefits of it - the readership, the listenership - there's no question that people want the information.

"There's no question of the importance of it and the damage that will be done if it isn't there.

"We all have to work together to figure out how to fund it in a new and radical way."

But he and others remain optimistic for the future of local and regional media, despite current circumstances and the longer-term impact of technology, including social media sites.

Mahon insists that closures of local media would be a "massive loss to local connectivity and local democracy".

"Most people who work in this industry are passionate about local. It's a career and a vocation. They see it as their role to retain connectivity for local communities, and particularly across rural Ireland."

Can the media industry thrive or even survive in post-pandemic Ireland?

Irish Independent