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Regional Media - UK - February 2011

This report examines the market for regional media, including newspapers, websites, radio and TV. This is an industry which has been more affected than most by the economic downturn, since it relies heavily (or in the case of freesheets, exclusively) on revenue from advertising, which has slumped as advertisers have reined in their spending.

  • The regional media industry has been badly affected by the economic downturn because it is so reliant on advertising, which can account for 75% of more of revenues. Between 2005 and 2010 UK adspend fell by 9.7% but spend through regional press fell by 45.7% and through local radio by 16%.
  • Higher-than-average declines in adspend in local media have been driven by weakness in the core areas where classified advertising is generated – jobs, property and motors – as well as intense competition from specialist websites in those areas.
  • A structural shift in media consumption habits, from print to digital, has meant that circulations of regional papers have been declining steadily in the past five years, down by 23% between 2005 and 2010. The recession hastened this trend, as people have either cut back on their discretionary spending or switched to free alternatives.
  • Local commercial radio has been more insulated from recessionary pressures but has still suffered from competition from digital media. After having seen listening hours drop by 10% between 2005 and 2009, saw recovery in 2010, with 6.7% growth. It has also benefited from the increase in ways in which people can listen, while the more cohesive branding of stations through linking local stations to form national networks under a single brand name has presented a stronger image to both listeners and advertisers.
  • Around half of all adults (51%) do not engage with any form of local media, indicating both a lack of interest on the part of consumers in what is going on in their area and a lack of appeal in terms of the content that they are currently being offered.
  • Just 28% of adults agree that it is important for them to keep up with what is happening in their local area, underlining the extent of the apathy towards local content.

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Table of contents

  1. Issues in the Market

      • Key issues
        • Definition
          • Abbreviations
          • Future Opportunities

            • Turning tradition on its head?
              • The Local Guide to Life?
              • Market in Brief

                • Recession accentuates underlying structural issues for regional press
                  • Heavy reliance on ad revenues has exposed operators
                    • Print to digital shift challenges traditional business model
                      • How to monetise digital channels is biggest challenge for industry
                        • A trend towards free or combined titles
                          • Radio recovery due to stronger branding and more listening opportunities
                            • Big four regional press companies under pressure?
                              • Newspapers still most popular form of regional media…
                                • …but do we care?
                                  • General news and features biggest draw
                                  • Internal Market Environment

                                    • Key points
                                      • Falling ad revenues create tough times for media operators
                                        • Figure 1: Trends in total UK advertising expenditure, 2005-10
                                        • Figure 2: UK advertising expenditure, by sector, 2010
                                      • Reliance on advertising revenues hurts regional papers in tough times
                                        • Shift from print to digital…
                                          • …not just affecting regionals
                                            • Figure 3: Trends in daily national newspaper* circulations, May 2005-May 2010
                                          • Paid-for national titles see strongest decline
                                            • Figure 4: Trends in daily national newspaper* circulations, by broad sector, May 2005-May 2010
                                            • Figure 5: Trends in selected free daily newspaper circulations, by title, May 2005-May 2010
                                          • All change: government relaxes local cross-media ownership rules…
                                            • …and seeks to scrap them altogether
                                              • Going local…
                                                • …but funding still an issue
                                                  • It’s about the product
                                                    • Joining up the various strands
                                                      • Rising newsprint costs cause additional headaches
                                                        • Competition from ‘propaganda on the rates’ to stop
                                                        • Broader Market Environment

                                                          • Key points
                                                            • Economy set to remain weak
                                                              • Figure 6: GDP, PDI, consumer expenditure and savings, at constant 2010 prices, 2005-15
                                                              • Figure 7: Trends in quarterly GDP, Q1 2005-Q4 2010
                                                            • Consumers still have the ‘jitters’
                                                              • Figure 8: GfK NOP Consumer Confidence index, January 2008-December 2010
                                                            • Rise of the old
                                                              • Figure 9: Trends in the age structure of the UK population, 2005-15
                                                            • Rise in ABs positive for regional media
                                                              • Figure 10: Forecast adult population trends, by socio-economic group, 2005-15
                                                            • Retired growth plays to strengths of regional media
                                                              • Figure 11: Forecast adult population trends, by lifestage, 2005-15
                                                            • Online growth opens up opportunities
                                                              • Figure 12: Broadband penetration, by demographics, 2005-10
                                                              • Figure 13: Types of activity undertaken on the internet in the last three months, April 2009-October 2010
                                                            • Age of technology
                                                              • Figure 14: Device ownership summary, October 2010
                                                          • Competitive Context

                                                            • Key points
                                                              • Internet now second most popular news source
                                                                • Figure 15: Frequency of accessing different types of media for news, April 2010
                                                              • Competition from free news sources
                                                              • Strengths and Weaknesses in the Market

                                                                  • Strengths
                                                                    • Local papers have little competition
                                                                      • Brand and reputation
                                                                        • Industry presents a united front
                                                                          • Data
                                                                            • Affluent customer base
                                                                              • Weaknesses
                                                                                • Risk that more UGC could erode trust
                                                                                  • Apathy towards local issues
                                                                                    • Vulnerable to competition
                                                                                      • Better data on digital usage
                                                                                        • Ageing user base
                                                                                        • Who’s Innovating?

                                                                                          • Key points
                                                                                            • To charge or not to charge, that is the question
                                                                                              • Hyperlocal websites increase community focus
                                                                                                • Multi-platform, multi-routes to market: is this the future of regional media?
                                                                                                  • Going green locally
                                                                                                    • The radio empire fights back
                                                                                                      • Leveraging the brand
                                                                                                      • Market Size and Forecast

                                                                                                        • Key points
                                                                                                          • Regional newspapers: a resilient industry
                                                                                                            • Figure 16: Trends in circulation and number of titles for regional newspapers*, 2005-10
                                                                                                          • Market forecast
                                                                                                            • Figure 17: Forecast circulation of regional newspapers, 2005-15
                                                                                                          • Local/regional radio: Signs of recovery after years of decline?
                                                                                                            • Figure 18: Trends in weekly local/regional radio listening hours and hours per listener, 2005-10*
                                                                                                          • Market forecast
                                                                                                            • Figure 19: Forecast of radio listening hours, 2005-15
                                                                                                        • Segment Performance

                                                                                                          • Key points
                                                                                                            • Freesheets feel full force of downturn
                                                                                                              • Figure 20: Trends in the structure of the regional newspaper industry, by number of titles, 2005-11
                                                                                                              • Figure 21: Regional title number trends, 2005-11
                                                                                                              • Figure 22: Regional weekly circulation trends*, by frequency of publication, 2005-11
                                                                                                            • Local commercial sector drives local/regional radio comeback
                                                                                                              • Figure 23: Trends in weekly local/regional radio listening hours and hours per listener, by type, 2005-10*
                                                                                                            • Advertising: A horror story but signs of improvement
                                                                                                              • Figure 24: Trends in regional newspaper advertising revenues, 2005-10
                                                                                                              • Figure 25: Trends in regional newspaper advertising revenues, by type, 2005-10
                                                                                                              • Figure 26: Trends in regional newspaper classified advertising revenues, by type, 2005 and 2010
                                                                                                            • Radio bounces back
                                                                                                              • Figure 27: Trends in local commercial radio advertising revenues, 2005-10
                                                                                                          • Market Share

                                                                                                            • Key points
                                                                                                              • Johnston Press leads the way on title numbers
                                                                                                                • Figure 28: Top ten regional newspaper groups, by numbers of titles published, January 2011
                                                                                                              • Trinity Mirror tops the table on circulation
                                                                                                                • Figure 29: Top ten regional newspaper groups, by weekly circulation, January 2011
                                                                                                                • Figure 30: Circulation trends for leading daily regional newspaper titles, 2005-10
                                                                                                              • Top four operators also dominate online
                                                                                                                • Figure 31: Leading regional press online networks, January-June 2010
                                                                                                              • Global and Bauer dominate local commercial radio
                                                                                                                • Figure 32: Leading local commercial radio operators by listening hours, Q2 2010-Q3 2010
                                                                                                            • Companies and Products

                                                                                                              • Key points
                                                                                                                • Major players
                                                                                                                  • Regional press
                                                                                                                    • Gannett UK Ltd/Newsquest plc
                                                                                                                        • Figure 33: Key financial data for Gannett UK Ltd, 2005-09
                                                                                                                      • Archant Ltd
                                                                                                                          • Figure 34: Key financial data for Archant Ltd, 2005-09
                                                                                                                          • Figure 35: Archant Ltd, advertising revenue trends, 2008 vs 2009
                                                                                                                          • Figure 36: Archant Ltd, financial performance, by major business area, 2005-09
                                                                                                                        • Johnston Press plc
                                                                                                                            • Figure 37: Key financial data for Johnston Press plc, 2005-10
                                                                                                                            • Figure 38: Johnston Press plc, turnover, by major business area, 2005-10
                                                                                                                            • Figure 39: Johnston Press plc, trends in advertising revenue, H1 2009 vs H1 2010
                                                                                                                          • Northcliffe Media
                                                                                                                              • Figure 40: Key financial data for Northcliffe Media UK* division of Daily Mail and General Trust, 2006-10
                                                                                                                              • Figure 41: Northcliffe Media UK revenue analysis, by segment, 2009 and 2010
                                                                                                                              • Figure 42: Northcliffe Media advertising revenue, by sector, 2009 vs 2010
                                                                                                                            • Midland News Association Ltd (The)
                                                                                                                                • Figure 43: Key financial data for The Midland News Association Ltd, 2005-10
                                                                                                                              • Trinity Mirror plc
                                                                                                                                  • Figure 44: Key financial data for Trinity Mirror plc, 2006-10
                                                                                                                                  • Figure 45: Trinity Mirror plc revenue, by broad segment, 2005-10
                                                                                                                                • Commercial radio
                                                                                                                                  • Bauer Media Ltd
                                                                                                                                      • Figure 46: Key financial data for Bauer Radio, 2006-09
                                                                                                                                    • Global Radio (UK) Ltd
                                                                                                                                        • Figure 47: Key pro-forma* financial data for Global Radio (UK) Ltd, 2008 and 2009
                                                                                                                                      • GMG Radio
                                                                                                                                          • Figure 48: Key financial data for GMG Radio, 2006-10
                                                                                                                                        • UTV Radio
                                                                                                                                            • Figure 49: Key financial data for UTV GB Radio division, 2005-09
                                                                                                                                        • What Regional Media Do People Use Regularly?

                                                                                                                                          • Key points
                                                                                                                                            • Newspapers still most popular type of local/regional media
                                                                                                                                              • Figure 50: Regional media used regularly, November 2010
                                                                                                                                            • People keeping abreast of news in their area through papers, radio and TV
                                                                                                                                              • Figure 51: Regional media used regularly, by most popular regional media used regularly, November 2010
                                                                                                                                            • Regional TV viewers most avid consumers of local media
                                                                                                                                              • Figure 52: Regional media used regularly, by next most popular regional media used regularly, November 2010
                                                                                                                                            • Regionals overlap with national and mid-market tabloids
                                                                                                                                              • Figure 53: Regional media used regularly, by national newspapers read regularly (hard copy or online), November 2010
                                                                                                                                            • Around half of adults don’t use local/regional media regularly
                                                                                                                                              • Figure 54: Repertoire of regional media used regularly, November 2010
                                                                                                                                              • Figure 55: Regional media used regularly, by repertoire of regional media used regularly, November 2010
                                                                                                                                          • What Do People Use Local and Regional Media For?

                                                                                                                                            • Key points
                                                                                                                                              • General news and features, sports and events are main draws
                                                                                                                                                • Figure 56: Reasons for using local and regional media, November 2010
                                                                                                                                              • Sport provides a good hook for local/regional media
                                                                                                                                                • Figure 57: Reasons for using local and regional media, by reasons for using local and regional media, November 2010
                                                                                                                                              • Paid-for local paper readers show greatest interest in general news and features
                                                                                                                                                • Figure 58: Reasons for using local and regional media, by regional media used regularly, November 2010
                                                                                                                                              • Quality newspaper readers keenest on local news and features
                                                                                                                                                • Figure 59: Reasons for using local and regional media, by national newspapers read regularly (hard copy or online), November 2010
                                                                                                                                              • Two in five only want one thing from local/regional media
                                                                                                                                                • Figure 60: Repertoire of reasons for using local and regional media, November 2010
                                                                                                                                                • Figure 61: Reasons for using local and regional media, by repertoire of reasons for using local and regional media, November 2010
                                                                                                                                            • What Are People’s Attitudes towards Local and Regional Media?

                                                                                                                                              • Key points
                                                                                                                                                • Apathy towards local content
                                                                                                                                                  • Figure 62: Attitudes towards local and regional media, November 2010
                                                                                                                                                • Regional daily readers keenest to keep up
                                                                                                                                                  • Figure 63: Attitudes towards local and regional media, by most popular regional media used regularly, November 2010
                                                                                                                                                  • Figure 64: Attitudes towards local and regional media, by next most popular regional media used regularly, November 2010
                                                                                                                                              • Regional Media Targeting Opportunities

                                                                                                                                                • Key points
                                                                                                                                                  • Figure 65: Regional media target groups, November 2010
                                                                                                                                                • Want it Now
                                                                                                                                                  • Demographics
                                                                                                                                                    • Marketing message
                                                                                                                                                      • Happy to Wait
                                                                                                                                                        • Demographics
                                                                                                                                                          • Marketing message
                                                                                                                                                            • Disengaged
                                                                                                                                                              • Demographics
                                                                                                                                                                • Marketing message
                                                                                                                                                                  • Sport more important to Want it Now group
                                                                                                                                                                    • Figure 66: Reasons for using local and regional media, by target groups*, November 2010
                                                                                                                                                                  • Want it Now group most likely to use local paper websites
                                                                                                                                                                    • Figure 67: Attitudes towards local and regional media, by target groups, November 2010
                                                                                                                                                                • Appendix – Market Size Forecasts

                                                                                                                                                                    • Figure 68: Forecast weekly circulation of regional newspapers, 2010-15
                                                                                                                                                                    • Figure 69: Forecast of radio listening hours, 2010-15
                                                                                                                                                                • Appendix – What Regional Media Do People Use?

                                                                                                                                                                    • Figure 70: Most popular regional media used regularly, by demographics, November 2010
                                                                                                                                                                    • Figure 71: Next most popular regional media used regularly, by demographics, November 2010
                                                                                                                                                                    • Figure 72: Repertoire of regional media used regularly, by demographics, November 2010
                                                                                                                                                                • Appendix – What Do People Use Local and Regional Media For?

                                                                                                                                                                    • Figure 73: Reasons for using local and regional media, by demographics, November 2010
                                                                                                                                                                    • Figure 74: Repertoire of reasons for using local and regional media, by demographics, November 2010
                                                                                                                                                                • Appendix – What Are People’s Attitudes towards Local and Regional Media?

                                                                                                                                                                    • Figure 75: Attitudes towards local and regional media, by demographics, November 2010
                                                                                                                                                                    • Figure 76: Attitudes towards local and regional media, by reasons for using local and regional media, November 2010
                                                                                                                                                                    • Figure 77: Attitudes towards local and regional media, by national newspapers read regularly (hard copy or online), November 2010
                                                                                                                                                                • Appendix – Regional Media Targeting Opportunities

                                                                                                                                                                    • Figure 78: Regional media used regularly, by target groups, November 2010
                                                                                                                                                                    • Figure 79: Target groups, by demographics, November 2010

                                                                                                                                                                Companies Covered

                                                                                                                                                                • Archant
                                                                                                                                                                • Associated Newspapers Ltd
                                                                                                                                                                • Bauer Consumer Media
                                                                                                                                                                • Berrow's Worcester Journal
                                                                                                                                                                • Birmingham Post & Mail Ltd
                                                                                                                                                                • British Broadcasting Corporation (BBC)
                                                                                                                                                                • Capital Radio Group
                                                                                                                                                                • Chrysalis Radio
                                                                                                                                                                • Classic FM plc
                                                                                                                                                                • Clyde & Forth Press Ltd
                                                                                                                                                                • Daily Mail
                                                                                                                                                                • Daily Record & Sunday Mail
                                                                                                                                                                • DC Thomson & Co Ltd
                                                                                                                                                                • Dundee Courier & Advertiser
                                                                                                                                                                • Eastern Daily Press
                                                                                                                                                                • Edinburgh Evening News
                                                                                                                                                                • Evening Standard
                                                                                                                                                                • Express and Star
                                                                                                                                                                • Gannett Co., Inc.
                                                                                                                                                                • GCap Media
                                                                                                                                                                • Glasgow Evening Times
                                                                                                                                                                • GMG Radio
                                                                                                                                                                • Guardian Media Group
                                                                                                                                                                • Independent (The)
                                                                                                                                                                • Johnston Press plc
                                                                                                                                                                • London Stock Exchange plc
                                                                                                                                                                • Manchester Evening News
                                                                                                                                                                • MEN Media
                                                                                                                                                                • Metro (The)
                                                                                                                                                                • Midland News Association Ltd (The)
                                                                                                                                                                • Newspaper Society (The)
                                                                                                                                                                • Newsquest Media Group
                                                                                                                                                                • Northcliffe Newspapers Group
                                                                                                                                                                • Orion Publishing Group
                                                                                                                                                                • Radio Joint Audience Research Limited
                                                                                                                                                                • Reading Post
                                                                                                                                                                • Skype Technologies S.A.
                                                                                                                                                                • Southernprint Ltd
                                                                                                                                                                • Sunderland Echo
                                                                                                                                                                • The Irish News Ltd
                                                                                                                                                                • The Scotsman Publications Ltd.
                                                                                                                                                                • The Sunday Post
                                                                                                                                                                • Tindle Newspapers Limited
                                                                                                                                                                • Trinity Mirror plc
                                                                                                                                                                • UTV
                                                                                                                                                                • Western Daily Press
                                                                                                                                                                • Western Morning News
                                                                                                                                                                • World Advertising Research Center
                                                                                                                                                                • Yorkshire Post Newspapers Ltd

                                                                                                                                                                Regional Media - UK - February 2011

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