Internet killing the newspaper star

Posted by robin in Market Commentary Thursday December 11, 2008 1:03 pm

Who’s the first to go?

Our newspapers, I mean.

Creative destruction is at the heart of capitalism said the economist Shumpeter as the old ways of doing things are replaced by the new.

Few businesses provide more topical examples of that process than newspapers. The internet revolution has seen readers and advertising migrate rapidly online cutting both traditional sources of print revenue.

Circulations are in decline, staff are being cut and companies are making radical changes in a desperate bid to survive. Throw in a deepening recession and the odds are horrible.

A few news items have showe dup recently which makes me think the day one of our national’s stops printing is getting close…

  1. Last week-end’s Sunday Times published a piece by Andrew Sullivan titled: “Read all about it: Newspapers are done for.” Newspaper circulations globally have been declining by 2% pa for much of the past decade he writes and the fall in US circulations this year is running at more than twice that.   
  2. The Chicago Tribune group filed for bankruptcy on December 8. It was the second largest newspaper publisher in the US counting The Los Angeles Times and Chicago Tribune amongst its stable. Done for by a lethal cocktail of $13bn debt, an 8% circulation decline decline in the past year and collapsing ad revenues.
  3. In October, the US Christian Science Monitor announced it was discontinuing the print production of its newspaper and transferring it online.
  4. In November, the magazine which has been spreading the word on computers since 1982 - PC Magazine will exist online only from next January. 
  5. “I have a hunch that early next year at least one large British newspaper company will have to take the same drastic action as the Tribune company. But which will be the first to go into administration?” asks media correspondent, Roy Greenslade in last night’s Evening Standard.

No doubt he has a pretty good idea but keeps mum on naming names. Further comment supports the view as he reports layoffs at The Telegraph and the Indy. The latter is moving office too and bunking in with the Evening Standard in Kensington!

2009 is shaping up to be a watershed year.

 

Those in work…and those not

Posted by robin in Financial Articles Market Commentary Wednesday November 12, 2008 4:42 pm

Starting with the bleeding’ obvious…

From record lows, unemployment is now going up and the new trend will continue for many months from here. Cue TV news crews hunting down tales of financial hardship from the newly redundant.

Squinting at the latest government stats, let’s start with the big picture…

How many people of working age (aged between 16-59/64) are there in the UK?

Answer: 39.1m

So a ballpark two-thirds assuming a total population of 61m.

But, of course, it’s not that simple. Not all of that 39.1m work…

So how many don’t?

Well, more than a fifth of that number are, to use the official definition, ”economically inactive”.

Before abusive terms such as “lazy toe rags” spring to mind from taxpaying readers, let’s see who makes up this group…

The Office of National Statistics explains - they are unable to work.

Pourquoi?

Well, it’s a hotchpotch of circumstance really but ”reasons include being a student, being disabled, or looking after the family and home”.

So from our 39.1m we need to subtract these “inactives” to reach the total available to put in a day’s graft. 

This brings us down to near 31.7m souls. 

But as we know too well, not everyone of that number boasts a job.

How many don’t?

The latest count says 1.82m don’t. Up 140,000 on the previous quarter and rising at its fastest pace for 17 years says Bank of England governor Mervyn King. Gloomy estimates suggest it could hit 2m by Christmas and more than 3m by 2010.

But currently our 31.7m drops a little more, to 29.4m… A total now less than half the UK population.

And of the 1.82m unemployed, the number on the dole (aka Jobseekers allowance) is nearing 1m.

This is quite a sea change from a few short months ago when the Department for Work and Pensions proclaimed in a press release that there was a record high employment level at 29.4m and record low claimant count at under 800,000. Then Employment Minister Stephen Timms, now installed at the Treasury, crowed:

“These figures show we continue to have a strong and stable labour market with both record numbers in employment and the lowest claimant count for 32 years.

If you could have shorted the UK unemployment rate, that was the moment. Whenever news of a multi-year record in anything hits the airwaves it’s time to bet the other way, Everything, as they say, reverts to the mean. 

Interestingly, the total in work at 29.4m, continues at around the record level hit in February. But it did fall 99,000 over the quarter and not nearly gloomy enough to sell a newspaper.