by Elizabeth Ducie

Created on: May 05, 2009

"There will be blood on the streets and it will be over for some newspapers." This was the view of Cameron Yuill, CEO of Adgent 007, talking about the current turmoil in the newspaper industry on the BBC Money Programme recently.

There are huge challenges facing newspapers and they need to identify possible survival strategies.

There is a barrage of statistics thrown about these days on falling numbers, falling percentages and not all of them sound plausible or understandable. What use is it to know how many fewer papers are being sold, if you don't know what the original total was anyway? The message however is clear. The traditional newspaper reader is a dying breed.

Circulation numbers are falling globally as younger people in particular prefer to obtain their news instantly and electronically. Consequently, revenue from main-stream advertising is also falling. At the same time classified advertisements are moving en-masse to the internet. Local newspapers in particular are hit by this, but the overall drop in sales is being experienced by red-tops and broadsheets as well.

The effect of this on the industry and its workforce has been immense and rapid. In the UK alone in recent months, 500 journalists and thousands of print workers have lost their jobs as 55 titles have closed.

It is recognised by everyone that the industry has to change if it is to survive. Examples of immediate cost cutting exercises include the imminent move by the Independent and Daily Mail to share office space and back-room staff.

One tactic being employed by many of the newspapers is the free gift to encourage sales. These may be books, CDs, DVDs or vouchers for anything from restaurant meals to holidays. One particularly successful example was the new McFly album given away free with the Mail on Sunday. This resulted in an increase in sales from 2.1m to 2.4m for the MoS and 2.4m people listening to the new album on one day. Definitely a win-win situation.

A major figure in the newspaper industry is Rupert Murdoch, owner of the Sun, The Times and the Wall St Journal to name but three of his many titles. He has recently managed to buck the trend in reduction in sales in both UK and US (although, like everyone else, sales are down in the long-term). While other companies are cutting costs, he has recently invested heavily in both editorial and production and his new facility outside London is now the largest in the world. It can produce newspapers at a much faster rate and in full colour.

However, Murdoch is quite clear that the future of news media lies on-line. His views are supported by Alan Rusbridger, Editor-in-Chief of the Guardian who believes they will never again buy a traditional printing press. He sees this not as a loss, but as an exciting change.

While several newspapers have fully embraced the delivery of news via the internet, there is one problem yet to be resolved. How can they make money out of a medium which increasingly offers huge amounts of content for free? Particularly when the audience is very unwilling to pay for it. Advertising will once again be an important aspect of this, although with electronic delivery being global rather than local, there is a challenge associated with delivering relevant adverts to readers.

Big changes are certainly taking place in the newspaper industry and as Cameron Yuill says "not all will make it".

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