The shareholder and the licence fee payer

The owner of the Western Mail, Wales’s sole national newspaper, is struggling. Yesterday Trinity Mirror’s shares fell to around 105.75p at 4pm, down from the closing price of around 151.50p last Friday. The fall followed yesterday morning’s announcement that Trinity Mirror’s full-year operating profit would be about 10 per cent below expectations.

The reasons for Trinity Mirror’s troubles are numerous. As the IWA’s recent report, Media in Wales – Serving Public Values, showed circulations have fallen dramatically, even since the inception of the National Assembly in 1999. Its circulations continue to slide. Advertising is a regional newspaper’s lifeblood and in the case of Media Wales (Trinity Mirror’s company in south Wales) it has been bleeding away thanks in part to the consumer slowdown affecting both classified and display advertising and to wider challenges, including technological developments. Central to its plight, however, is shareholder pressure – the pressure to grow profit every year. In television ITV plc is scaling back its regional output across the UK thanks again to the pressure of the shareholding model. Its shares have also taken a battering in recent years, falling from 115.0p a year ago to around 47.5p last Friday. As the financial screw tightens for ITV the decline of regional programming is accelerated.

The lesson to draw from the (mis)fortunes of Trinity Mirror and ITV plc is that the conventional shareholder model just does not seem appropriate for media organisations that have such an important public service role. Choice is important for the citizen: it can promote healthy competition and media plurality; and, most importantly, gives the citizen democratic power. Whatever system we have in place must allow the citizen democratic power to choose.

Yet, in recent years many in and around the media industry have have tended to focus – perhaps too much – on plurality of media ownership rather than plurality of output. At the moment only the BBC seems immune to shareholder cost pressures. The BBC stands as the exception, with its funding by the licence fee. In Wales the BBC is the only national radio service and, if ITV plc’s decline continues, could be the only player in television media as well. This surely cannot be healthy for Welsh democracy.

One thought on “The shareholder and the licence fee payer

  1. Peter Wilby writing in the Guardian today states that the Sun’s marketing spend is £16m and the Daily Mail’s is £20m. Is it surprising therefore that the Western Mail’s circulation continues to fall when its owners, Trinity Mirror, seem to believe that it will sell itself in a highly competitive market with virtually no promotion? The Western Mail is poor value, too, when compared with the papers it has to sell against. It is both more expensive at 58p than comparable mid-market papers and barely less expensive than the qualities such as the Guardian. Yet, for his or her 58p (up from 25p in 2001)the reader gets a very slim daily. Indeed, pagination has declined very significantly since the paper went tabloid. A 28 page Western Mail pre-tabloid equates to 56 pages now in tabloid – a size the Western Mail rarely hits these days. If Trinity Mirror are tiring of the paper should we perhaps now in Wales be seeking to find a group of business people who would be willing to acquire the paper if and when it comes on the market and who would be willing to establish a trust to run it?

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