All change in the North West publishing sector

Nick Jaspan looks at the changing landscape in regional publishing.

How-Do merging with Confidential, the Liverpool Daily Post going weekly, Newsco (Insider) and Ten Alps up for sale, regional newspaper groups hurting, Excel morphing into a sales house…where will it all end?

The recent merger of How-Do – and its sister website Place North West – with the Planet Confidential titles, was just one of a number of recent developments taking place in the publishing sector here in the North West. And the How-Do news was itself quickly over-taken by the Trinity Mirror announcement a couple of days later that the Liverpool Daily Post - ironically the oldest title in the stable of the publishing company that acquired the Mirror -  was to become a weekly title in early 2012.

These developments have taken place against a background of continuing decline faced by the majority of regional publishers as the much vaunted ‘flight to digital’ and the ensuing holy grail of newly discovered riches, has yet to materialise.

The established and hitherto highly profitable model of sales people from a regional paper or a B2B or B2C publisher ringing up advertisers with an offer of a full page ad or a special classified position have long since proved irrelevant as a combination of the digital world and economic malaise, have torn apart the traditional ways that publishers made money.

The malaise is widespread but it is quite fragmented and has not affected everyone. But it is certainly starting to reshape the region’s publishing sector in a way that is likely to result in an entirely different landscape over the next few years. 

How-Do, launched in 2007 with modest expectations (home working anyone?) surprised the market by establishing a position within just a few months as the first port of call for the region’s rapidly growing community of media and creative industries folk as they enthusiastically embraced How-Do’s diet of news, occasional gossip and a number of industry events.

The site grew through the recession and indeed for the year to July 2011 turned its first profit, a modest five figure sum. However, an earlier decision taken in September 2009 to acquire a controlling stake in PMU Publishing, the owner of commercial property web site Place North West, was proving harder to manage as the malaise affecting the commercial property market was substantially worse than that affecting the media and marcomms sectors. With construction output showing no sign that the future held anything other than continuing decline, How-Do’s lack of capital necessitated third party conversations as the lack of in-house tech capability and limited sales resource was proving to be an issue.

Planet Confidential, based in the same building in Manchester as How-Do, had itself been through several  iterations as it sought ways to monetise its purely digital offerings.

Paywalls, restaurants on monthly retainers, e-shots, loyalty cards and other initiatives came and went as staff numbers in the space of three years rose and fell from a dozen to 30 to ten to 40 to 25. And the further the Confidential title wandered away from its Manchester base and its alter ego Mark (Gordo) Garner, the harder the title found it to engage meaningfully with city audiences - and subsequently make money.

Rationale behind How-Do/Confidential merger

The rationale went that a merger of Confidential, How-Do and Place, offered an unusual opportunity to pool resources and exploit three remarkably well-known brands more fully, particularly here in the companies’ home base. If this could be done, the potential would be there to create the leading online publishing company based in the North West, which in itself would prove attractive when the mergers & acquisitions climate returned to headier times.

The newly merged company now has around 25 staff, with five departures post merger including How-Do’s sales director.

Readers of the three titles can expect to see Confidential offers extended across How-Do and Place with How-Do and Place jobs going back across the piece, a stronger focus and related offerings on classifieds  together with new Confidential events coming onto the market during 2012.

Back in the world of pure B2B publishing, the persistent rumours have been intensifying in recent weeks that two of the region’s three biggest B2B publishing companies, Ten Alps and Insider Media, are up for sale while the third of the leading B2B trio, Excel, appears to be moving away from its publishing roots and into broader sales-led propositions including e-marketing and promotional sales goods, where it hopes to bring its publishing expertise and resources to bear.

Sale mandates now being actively circulated

Sale mandates relating to one or both companies have been circulating among corporate finance advisers for some time now.

Potential purchasers of Ten Alps’ content and production companies have been on alert since early this year as the turmoil engendered by the demise of Teachers TV took grip but the more recent talk of selling the Macclesfield-based publishing operation will surprise many.

Adrian Dunleavy, chief executive of Ten Alps Communications division - of which publishing is a key part - categorically denied the rumours when asked by How-Do. “The Northern operations are core to Ten Alps” he said. “Macclesfield and Manchester are highly successful units and the former also houses most of the group’s central services functions.”

The publishing operation has though, in common with its peers, felt pain as staff numbers in the North West have dropped from 200 just a couple of years ago to around 150, added Dunleavy.  He was, however, reluctant to go in to further detail as the listed company’s half year figures are due for release next week.

He did though offer the view that B2B publishing in the region “has gone through a period of transition, primarily hitting the top (sales) line which in publishing typically affects the bottom line more disproportionately than in most other business sectors. It is inevitable that consolidation will follow.”

Ten Alps and its offspring

What may or may not happen to Ten Alps’ publishing operation will be felt far beyond the company’s two North West offices. The operation was originally known as McMillan Scott (MS) and made its name and reputation publishing contract titles for Chambers of Commerce, trade bodies and the public sector. A whole host of companies have spun out of MS over the years; from larger players such as PSCA in Stoke to Govnet and the most recent GovToday.

Govnet’s latest filed figures show staff numbers at 80 with sales of circa £8m, pre-tax profits of £904k and over £2m in the bank. However, it is believed that numbers have fallen since the company last filed its figures and that the tougher economic climate has finally caught up with the company and its mercurial owner Jo Walsh, who declined to respond to How-Do’s request for a comment.

Govnet, like its newest competitor GovToday (primarily staffed by ex Govnet senior management), targets the public sector and those who make their living supplying the public sector. Both create and manage from their Manchester bases, high quality events and conferences, usually in London.

Alongside these events they publish on and offline titles.

GovToday, established in November 2008, now employs 30 staff, down from 40 just over a year or so ago. The company claims its sales are around £2.5m (it only files small company accounts so is not compelled to divulge sales figures) and is profitable says one of its co-founders Rob Hollis.

Early and rapid success “allowed us to get too far ahead of ourselves” said Hollis. “In year two we grew too fast in hindsight and we found ourselves over-staffed at a time when cash was getting tighter. But when we realised what we’d done, we applied the brakes and moved into consolidation rather than growth mode.”

“My view” he added when responding to a question about the regional landscape “is that you simply need to be a lot smarter these days and your end product has to achieve results or you won’t see your customer again.”

This theme is echoed by Martin Regan, the co-founder of Manchester’s biggest independent publisher, Excel Publishing.

Excel, best known in the North West for its monthly business title EN, derives the majority of its sales from the construction sector, contract titles and events across the UK. Having grown rapidly over the years, sales dipped in 2009 to c£5.5m with pre-tax profits falling to c£450k. In 2010 the company made its first loss in over 15 years but Regan is adamant that for the current year he is “expecting us to just about break even.”

The company has restructured itself over the past year and has closed some print titles while planning to launch new digital titles. Staff numbers are down from 130 in 2008 to around 105, up this year on the back of an increase in the number of sales people employed.

Regan and co are targeting further digital launches but it is Excel’s growing e-marketing division and the most recent new initiative, a promotional products division, which Regan believes may point to the company’s future composition.

The days of publishing primarily predicated on ads in print titles and websites or events related to the title’s masthead are over he says. “The flight to digital is proving more problematic than people envisaged,” he added.

Advertisers want and demand ever greater returns on their marketing expenditure and Excel’s ability to deploy its sales resources across a broader variety of products that can support companies’ sales activities are where Regan believes the future lies for publishers like Excel.

“My view is that these are the toughest conditions we’ve ever faced and I don’t think we’re ever going to go back to where we all were. In terms of regional publishing, there’ll only be a few serious business publishers outside London in two to three years and it will be the survival of the fleetest of foot, not the fittest.”

Insider Media

Arguably the best known of the region’s business publishers, Insider Media, is believed to be back up for sale although the managing director Marlen Roberts declined to respond to How-Do’s questions. Since publication of this article however, Ms Roberts has been in touch to say that they categorically deny the company is for sale.

Insider Media was close to a sale prior to the recession in 2008 having enjoyed sales of c£7m and ptp of £975k in the year to December 2007. However, timing ultimately went against it and as with most of its peers, the hatches were battened down as the recession took grip.

Sales for the year to December 2009 dropped to under £5m and a loss of £160k was incurred. The company didn’t disclose its sales line for the year to 2010 as losses widened further.

How-Do hasn’t been able to establish the value that the low-key Roberts and her fellow shareholders have put on the business but it is certainly much less than that they almost pocketed three years ago.

The company is facing continuing downward pressure on its key revenue streams and despite an increasing investment in digital, revenues from those sources are still minimal. With revenue from its primary source – print media – declining sharply with little respite in sight (a page ad in the North West edition is now believed to be available to canny buyers for around £600 against a rate card nearer £2,000), would be buyers of Insider will need to be convinced they can significantly enhance more revenues from the company’s broad portfolio of products than the current management is able to.

Events, Insider’s second key source of revenue, remain comparative money spinners for the company but even in this area, sponsorship revenues underpinning the events are proving challenging, as they are for all in the sector.

The company is also faced with issues outside its North West homeland. NW Insider is still a cash cow, How-Do understands, but Yorkshire, the Midlands, the South West and Wales continue to be a strain on management time and company resources while the headcount at around 80 together with high fixed costs spread across several regional offices are more appropriate to a growth environment than one facing structural decline. 

In stark contrast to Insider, Yorkshire-based business website The Business Desk, has no print legacy having launched in Leeds in 2007 as a web only publication. The company moved into the North West in 2008 and the Midlands last year. The company recently announced that it had reached a milestone in its development with subscribers now above 100,000 and annualised sales approaching £1m. Staff numbers at TBD are believed to be just 14 across the three regions.

But just how the company is generating its income remains a complete mystery to the majority of media pundits, given the apparent reliance on banner ads which typically these days don’t command the rates they did do a few years ago. A search at Companies House reveals losses to date of £735k, funded by the company’s original group of wealthy Yorkshire private individuals and, with the launch in the Midlands, a couple of wealthy Brummy investors.

The company’s founder and MD, David Parkin, without going into detail, is adamant however that the company is now breaking even and despite the poor economic forecasts for next year, is confident that 2012 will see the company recording its first profit.

With the three regional titles now seemingly smoothly run operations overseen by the three regional editors and the commercial director Mark Webb (himself a former senior Insider sales manager), Parkin is now increasingly concentrating on ways to enhance shareholder value. A recent deal with a national property title should offer TBD access to national and international content while allowing the national title access to the three biggest regional markets around Leeds, Birmingham and Manchester.

Further tie-ups and new developments can be expected of TBD during 2012.

Something that can also be said of the regional newspaper publishing sector next year – albeit on a greater scale.

The regional 'press'

The region’s four major publishers Trinity Mirror, Newsquest, CN and Johnston Press, are all grappling with similar issues: declining print sales, on-going pressure on display advertising, the continuing migration of classifieds away from their established media brands to niche web sites, high legacy overheads and unions with an astonishing inability to face the realities of the situation.

In their favour is the remarkable fact that the titles published by the big four are all enjoying record readership when online and print numbers are combined.  But again, in common with their B2B peers, the question is how can they more effectively monetise their digital successes.

The regional press has in its favour an almost unique ability to communicate with so many disparate audiences within a given locality.  But, unlike the arguably fleeter of foot publishers in the B2B and B2C sectors, the management teams within most regional press still instinctively lean towards print as their natural home. In this context, the appointment of Ashley Highfield as Johnston Press’ new chief executive this November will be fascinating to watch given Highfield’s previous position as a vice president of Microsoft, responsible for the UK consumer and online business. Prior to joining Microsoft, he was the director of new media and technology at the BBC.

The potential is clearly there for the ‘regional press’ to drive home its advantage in so many areas; from replicating and supplanting Groupon activities locally, more effectively data-mining their considerable but typically under-utilised CRM (customer relationship management) systems, increasing offline and in person engagement with their niche audiences, extending the range of merchant services, opening up entirely new areas of affiliate activities, mobile engagement and indeed exploiting the broader opportunities offered by e-commerce and the growing trend to buy online.

François Nel, director of the Journalism Leaders programme at UCLan and someone who has worked closely with many of the UK’s leading regional publishing companies believes that the web offers “the opportunity to move on just from advertising, to providing solutions up and down the value chain to all customers – not only those ‘formerly known as the audience’, but also those ‘formerly known as the advertisers and the sources’.”

The Liverpool Post

Perhaps the most surprising but equally most trailed development in the regional ‘press’ this year was the recent announcement by Trinity Mirror that in early 2012, the Liverpool Daily Post would become a weekly title, no longer to be published from Monday to Friday: the Saturday edition having been dropped a couple of years ago.

Trinity had similarly changed the publishing schedule of the Birmingham Post two years ago so it had experience of such a transformation. However, How-Do also understands that initially the bosses at Canary Wharf (TM’s HQ) wanted to close the title entirely but that was bitterly opposed by the regional team based in Old Hall Street which argued for time for the title to trial life as a weekly.

No one at TM was available for comment beyond pointing How-Do to the release it issued at the time of the announcement which stated that the new (working) title ‘The Liverpool Post’ would be published on a Thursday and was expected to carry over 100 pages per issue. At the time, the editor Mark Thomas said: “We are lucky to be custodians of one of the great brands in journalism and we’ve been serving our city for 156 years. This change sets us up to serve it for the next 156 – in print and online and through whichever channels readers seek to receive it.

“However, we appreciate that the world is changing and people’s buying habits and news consumption requirements are very different. There is clear evidence that a bumper Post once a week, full of high-quality news, views and analysis, will be better for readers and a more appealing vehicle for advertisers.

“This move enables us to maximise brand potential in what are extraordinarily challenging times for the media industry and for business in general.”

Certainly the revamp and relaunch of the weekly Birmingham Post appears to have been successful with the title continuing to command a healthy amount of business advertising and as far as How-Do can ascertain, there is little talk in the Midlands of Trinity not continuing with the title in its revised format. The one key difference however between the former Birmingham Post and the current five-days-a-week Daily Post was that the former commanded significantly higher levels of business advertising than the latter and retaining that loyal group of advertisers has been key to the title’s continuing success in Birmingham.

Other senior figures within Canary Wharf and Old Hall Street will also have noted the considerable and growing success enjoyed by MEN Media’s (also owned by TM) stand-alone weekly title GM Business Week but there is still no disguising the fact that both Birmingham and Manchester are home to much larger economies than Liverpool.

And while most folk in regional and indeed national publishing grapple with the ‘flight to digital’ and all that entails, a salutary lesson can be learnt much nearer to home.

Life titles buck the trend

The county ‘lifestyle’ magazines Lancashire Life and Cheshire Life have quietly and steadily continued to grow throughout the downturn. The latest ABCs saw both titles recording modest increases in copy sales with Lancashire rising to over 25,000 and Cheshire climbing to over 18,000.

Roger Borrell, the Preston-based group editor of Archant’s three northern titles (the other being Yorkshire Life), told How-Do that “there’s no doubt that things have got tougher for everyone but fortunately for us not to the terrifying degree encountered by most others in the regional press.

“The digital threat is not as great for us although we continually monitor the digital landscape, particularly now in the area of apps. We are of course though having to fight harder than ever for circulation and ad revenues but we have not been frightened to try new things, such as QRs and Buyamag (a website which allows customers to have discounted single copies sent direct to the homes of readers).

“But happily, the printed brand remains as strong as ever and from my point of view, I’m happy to say Archant has remained true to the philosophy that quality will always sell. We haven’t been tempted to cut corners, slash paginations or compromise editorial integrity. Readers recognise that and advertisers know that while they might get cheaper mediums they won’t get one that’s more effective.”

Time will tell who the winners and losers are but for now, the only constant is change and the likelihood is that several familiar names will disappear in the next two to three years.


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