Slim chance of a ‘white knight’ rid­ing to res­cue

The Ir­ish Times is strug­gling in the new dig­i­tal ad­ver­tis­ing world, write Liam Collins and Dan White

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

ARECENT EN­COUNTER with an Ir­ish Times staffer made for a sober­ing ex­pe­ri­ence. Usu­ally a bon viveur with the op­ti­mism of a Leav­ing Cert stu­dent head­ing to Ma­galuf, this Ir­ish Times vet­eran couldn’t hide their me­lan­choly. Asked how the mood was in the grand old in­sti­tu­tion that is the Ir­ish Times, they re­flected mo­men­tar­ily, cast their eyes down and af­ter a short pen­sive­ness, looked up and replied: “Like the Mary Ce­leste.”

Tak­ing into ac­count any sub­jec­tive­ness by our jour­nal­is­tic col­league, mat­ters do ap­pear to be com­ing to a head — and quite swiftly.

There has been in­creas­ing spec­u­la­tion that the Ir­ish Times is in need of a ‘big beast’ phi­lan­thropist to bol­ster its fi­nances and pre­serve the trust that owns the com­pany.

The print me­dia, de­spite the naysay­ers, is do­ing well, but only where re­struc­tur­ing and rig­or­ous cost-cut­ting have been im­ple­mented, some­thing that has yet to im­pinge on the cost base of the Ir­ish Times.

The re­cent de­ci­sion of editor Kevin O’sul­li­van to stand down and the de­par­ture last year of some key ex­ec­u­tives, in­di­cates the first ten­ta­tive steps to­wards a re­or­gan­i­sa­tion to save the paper and pre­serve the trust — en­forc­ing man­ag­ing di­rec­tor Liam Ka­vanagh’s mes­sage that “if we don’t make a profit we won’t ex­ist”.

The ‘paper of record’ has only been marginally prof­itable over the last five years — 40pc of its read­er­ship is on­line and con­tin­u­ing ef­forts to get more of them to pay for it are run­ning into con­sumer re­sis­tance.

It would seem that if a ‘white knight’ is called in the trust will be ka­put and some of the harsher re­al­i­ties of com­mer­cial life may ap­ply.

Adding to the prob­lems for new editor Paul O’neill is the fact that the Lon­don Times is to pub­lish an Ir­ish edi­tion, which can only lead to con­fu­sion at the news stands. The two com­pa­nies have al­ready fought a High Court bat­tle be­cause of con­fu­sion over dig­i­tal brand titles.

Staff are ex­pect­ing O’neill to start wield­ing the axe on head­count. The gen­eral gloomi­ness at the Tara Street of­fices is not helped by the sense of be­ing un­der siege from dig­i­tal ad­ver­tis­ing, which has grabbed up to 50pc of the to­tal ad­ver­tis­ing mar­ket.

The lat­est cir­cu­la­tion fig­ures also show that the Ir­ish Times sold an av­er­age of just over 66,000 copies a day in the sec­ond half of 2016, down al­most 8,000 or 11pc on the sec­ond half of 2015.

Av­er­age daily cir­cu­la­tion has fallen by 42pc from 114,000 copies since the first half of 2009.

The Ir­ish Times is par­tic­u­larly vul­ner­a­ble to the in­creas­ing pro­por­tion of ad­ver­tis­ing go­ing on­line as, tra­di­tion­ally it had been far more de­pen­dent on ad­ver­tis­ing rev­enue than most of its main com­peti­tors. Lu­cra­tive property and jobs ad­ver­tis­ing rev­enue al­lowed the Ir­ish Times to rack up an­nual prof­its of over €20m dur­ing the Celtic Tiger era.

Ad­ver­tis­ing rev­enue at INM, the pub­lish­ers of this news­pa­per, was €63.9m in 2016. This was the equiv­a­lent of about 36pc of its news­pa­per rev­enues (ex­clud­ing dis­tri­bu­tion and con­tract print­ing). State broad­caster RTE recorded €110m of ad­ver­tis­ing rev­enue in 2015, the last year for which fig­ures are avail­able, 33pc of its to­tal rev­enues (in­clud­ing €179m from the TV li­cence). Un­for­tu­nately the Ir­ish Times doesn’t pub­lish a break­down of its news­pa­per-re­lated turnover, claim­ing that to do so “would be se­ri­ously prej­u­di­cial to the in­ter­ests of the Group”. How­ever, in­dus­try sources be­lieve that it rep­re­sents a much higher pro­por­tion of to­tal sales than at most of its ri­vals, per­haps 50pc or more.

The IAPI, which rep­re­sents ad­ver­tis­ing agen­cies, cal­cu­lated that to­tal billings through its mem­bers were worth €639m in 2015. How­ever, a large chunk of ad­ver­tis­ing, both on and off-line, is booked di­rectly by the ad­ver­tiser and so isn’t in­cluded in the IAPI fig­ures. News­brands Ire­land reck­ons that of the €154m spent on news­pa­per ad­ver­tis­ing last year, €60m or al­most 40pc was placed di­rectly with its mem­bers. This €60m fig­ure would in­clude ev­ery­thing from death notices to plan­ning per­mis­sion ap­pli­ca­tions.

Un­for­tu­nately the IAP fig­ures for dig­i­tal ad­ver­tis­ing don’t break out agency spend­ing from di­rect ad­ver­tis­ing.

How­ever, most dig­i­tal ad­ver­tis­ing, par­tic­u­larly with Google and Facebook, doesn’t go through tra­di­tional agen­cies. This means that the to­tal Ir­ish ad­ver­tis­ing mar­ket is worth about €1bn an­nu­ally. Which means that the Ir­ish Times is swim­ming against the dig­i­tal tide.

All of which goes some way to ex­plain­ing the pes­simism of our bon viveur friend. It also makes it very hard to en­vis­age a char­i­ta­ble ‘white knight’ with very deep pock­ets com­ing to the res­cue.

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