Executive Summary

The UK newspaper industry is a major sector of the UK publishing industry. At the end of 1996, there were around 1,200 newspapers in the UK. Total turnover of these papers in 1996 was £4.85bn according to Key Note estimates.

Although almost all the papers published in the UK are local papers, the total revenue of the few national papers is greater than that of all the locals combined. This is because the total weekly circulation of the regionals is only around 28 million, whereas the total weekly circulation of the nationals is approximately 96 million.

The industry is becoming increasingly concentrated, especially in the regional sector, where a number of large groups have changed hands in the last 2 years. Just 20 publishers account for 88.5% of the total circulation of the regional newspapers. Among the nationals, one publisher, News International, accounts for 36.7% of the market.

Since the middle of 1996, there have been some interesting developments in sales trends. Total national quality newspaper sales have risen strongly, while total popular newspaper sales have fallen yet again. In the regional press sector, the evening titles have been badly hit and several of the morning papers have also seen a sales decline. By contrast, more than half the weekly paid-for newspapers registered a rise in sales.

The biggest industry event so far in 1997 has been the agreed bid by the Mirror Group for a major regional press group, Midland Independent Newspapers (MIN). This means that in the space of a year, almost all the Midland's leading newspapers have changed hands, for EMAP's newspapers (focused around the East Midlands) were bought last year.

At the moment, the industry is largely doing very well. Although sales may be down, advertising revenues are up, so profits for 1997 will be good. The industry's fortunes will look less rosy by the middle of 1998. By then, the economy will probably be slowing down, advertising levels will be lower than in 1996, and the weaker papers will look vulnerable. 1998 could prove to be a year of considerable restructuring, with a change of ownership for at least one national paper. Overall, the revenue of the newspapers industry is forecast by Key Note to be £5.96bn by the year 2001.

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