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03 August 2017

Highfield: Newsbrands Need ‘Fair Deal’ With Digital Distributors

News Media Association chairman Ashley Highfield has reiterated his call for the news media industry to be fairly rewarded for its investment in news as a financial update from Johnston Press shows strong growth in digital display for the publisher.

In an interview with Press Gazette on the day Johnston Press published its interim results, Mr Highfield pointed to encouraging growth in digital display, also evident in Trinity Mirror's results earlier this week, but highlighted that the industry was not getting a fair deal from the digital aggregators who profit from news media journalism.

Mr Highfield said: “We certainly don’t get enough as an industry. We put the majority of investment in and get a tiny sliver of the reward out.

“The industry has recognised this is unsustainable and unfair and the Government has as well. I think that we probably need to work with Google and Facebook to come up with a better economic model that sees sustained viability for content creation – with their help in their algorithms to highlight and promote quality trusted content. There’s probably a win-win way of doing this.”

In its results yesterday, Johnston Press reported that digital advertising revenues were up 14.8 per cent year on year, with growth accelerating through the period, driven by growing audiences and stronger yields both locally and nationally, via the 1XL network, as demand for trusted, quality, targetable news increases. 

Digital audiences for the publisher grew 15 per cent to a record high of 26.5 million unique users a month, and with increased engagement, page views were up 20 per cent to over 110 million average page views per month.

Johnston Press' results follow Trinity Mirror's half-yearly financial report in which the publisher reported growth in digital revenues and audiences and reported on the strong performance for several new websites launched recently by the publisher.   

Average monthly page views grew by 9.4 per cent to almost 680 million with two thirds of those now on mobile, the publisher reported, with like for like publishing digital revenue growing by 5.9 per cent to £41.4 million with digital display and transactional revenue
growing by 18 per cent.

New websites launched by the publisher in key UK citities were performing well with, launched in January, achieving 1.8 million monthly browsers and 5.5 million page views in June 2017.

Belfast Live, Dublin Live and Glasgow Live delivered 4.2 monthly browsers and 14.0 million page views in June, up on the three million monthly browsers and 8.7 million page views in December 2016. and launched in the period and Trinity Mirror said it anticipated good traction on audience during the second half. 

In its results, Johnston Press reported that the i has seen significant growth in advertising and circulation revenues. Acquired on 10 April last year, the paper had seen circulation revenue increase from £4.4 million to £11 million and advertising revenues from £0.8 million to £3 million.  

In the comparable 12 weeks period post acquisition (from 10 April to end of each half year), total i newspaper revenue increased 28.6 per cent, the publisher reported.

Over the year, the publisher is on course to make £40m EBITDA profit on turnover of around £200m – a 20 per cent profit margin which shows there is still money to made from its network of 200 local newspaper titles, despite the challenges the industry faces, Press Gazette reported.

Highfield said: “There was a period during last year when people were starting to wonder whether the growth in digital was running out of steam.

“It’s encouraging and very important for the business that we are able to post digital display growth, and the most recent figures for June and July getting stronger still [up 25 per cent year on year].

“The reasons for that are pretty clear – that we are creating great content and content that’s trusted because of our trusted brands in a world of increasing fake news and advertisers want to know where their adverts are appearing.

“After a couple of years of advertisers and agencies saying that context wasn’t important, they just wanted to buy programmatically, I think they’ve woken up to that fact that context does matter.”

He said that quality ad slots and new technology which enables advertisers to target audiences more precisely are what gives JP a “USP over the likes of Facebook and Google”.

In 2016 the UK’s regional newspaper industry websites collectively made £193m in digital revenue versus more than £6bn for Facebook and Google, Press Gazette reported.