The local press is in an existential crisis: relentless decline in revenues since 2004 has rebased the scale of the sector, but there is little if any consensus about what to do next, despite broad agreement that the implications for democracy are deeply troubling

Incumbents have focused on incremental innovation with limited success, and have failed to adapt their digital strategies from those created 20 years ago, despite overwhelming evidence that they do not work, and never will

We argue for radical innovation, switching the industry’s focus from advertising to communities, building new use-cases while also sustaining print media for as along as possible, both to buy time but also to develop a multimedia roadmap for utility, entertainment and public good services

Consumer magazine circulation and advertising continue to spiral down, with notable exceptions at the top of the market and in a handful of key genres, triggering ever greater revenue diversification and innovation The market is fundamentally over-supplied and the gap between successful portfolios and the glut of secondary titles is growing. Furthermore, the distribution and retail supply chain hang by a thread There are some encouraging signs. Publishers are evolving, with their strategies and leadership capabilities increasingly defined by the needs of the industry they serve rather than the publishing brands they exploit, bringing the consumer model closer to more thoroughbred B2B models

The number of people willing to pay for online news now roughly matches print paid circulation, and will soon be substantially greater, with publishers increasingly demonstrating that their strategies are influencing industry outcomes

Our thesis is that subscriptions work in some cases, but that a more systematic reader-first approach benefits all cases, recalibrating management focus to media’s core purpose

Effectively implementing such an approach is a more radical, transformative development than is sometimes assumed. The winners will deploy sophisticated, bespoke audience acquisition and retention funnels and undergo detailed appraisals of the trade-offs necessary for optimal user experiences

After the most challenging period in its history since 2012, Facebook has been able to stabilise its fundamental metrics and announce a major product overhaul

Despite talk of a business model pivot, Facebook’s focus remains on advertising, whose growth will remain concentrated in developed markets

News publishers wishing to stay relevant on the upgraded product set need to target exclusive layers of social interaction, with groups particularly important

The decline in demand in print presents trading challenges, but the more immediate pressures are on the supply side, with a 15% rise in paper prices accentuating the burden of production and distribution costs

With digital advertising growing at stubbornly low rates, UK publishers need to return to their fundamental consumer-centred strengths by switching their strategic attention towards strong brands, curation, and community

The case for specialist, branded publishing media remains robust: products, services, and consumers are still best brought together in an authoritative, trusted media environment. Advertisers and agencies (and also media) have undervalued the effectiveness of those environments, and direct-to-consumer opportunities have been exaggerated by many brands

Bleak prospects for digital advertising leave no choice to news publishers but to generate revenue from readers, and the lack of widespread frictionless micropayment options means there is no alternative to subscription — the vast majority of western ‘quality’ newspapers have rolled out paywalls; meters and registrations are the most promising approaches

Recent politics have increased demand for quality journalism and readiness to pay. Despite clumsy commercial models the rise in subscriber numbers is encouraging, but current price points may be too low for a sustainable digital transition. Churn is high, publishers have yet to fully develop and optimise ecommerce

The transition to an audience-centric model is a shift away from click bait, with distinctiveness, curation and news agenda hierarchy among the most important factors. Leveraging data to optimise audience engagement remains challenging

Even though Facebook is not a producer of news, 6.5 million UK internet users claim to mainly source their news from the platform. Posts and shares by friends in the user's network, in the context of Facebook's algorithm, determine the order of stories in the personalised News Feed, removing the control of the news agenda that publishers have for their websites

Premium publishers operating a paywall (The Times, The Financial Times) have a lower key approach to Facebook than publishers generating advertising revenue from referral traffic to their websites or from on-platform consumption of Instant Articles. The latter will seek to stimulate social media engagement, optimising stories through attention-grabbing headlines, and installing Facebook’s share and like buttons on their websites

Case studies of the news stories that were prominent on Facebook (measured by likes, comments and shares) in the periods leading up to the Brexit Referendum and General Election 2017 votes respectively demonstrate that newspaper brands (the Express for Brexit, and The Guardian for the General Election) achieved the highest reach on Facebook during these periods, despite being ranked below other news brands (BBC in particular) in terms of traffic to their websites

Facebook content shares suggest that misinformation had broad reach during both US and UK political campaigns, but outright fake news was rare, particularly in the UK 

Mis- and disinformation by both established and new publishers was distributed on Facebook, but monetisation took place predominantly off-site, and content was distributed by a wide range of search and social platforms 

Facebook has acted to limit the reach of disinformation, but can’t and shouldn’t be expected to do so alone as digital news distribution touches on complex questions including information and democracy, media literacy and heterogeneous cultural and social norms

In an immersive industry workshop in Turin celebrating La Stampa’s 150th anniversary, quality news publishers from around the world expressed a strong collective belief in membership, an editorial strategy supported by an emerging advertising opportunity

Editorial and service relevance was defined by widely varying publisher missions, categorised by a range of local and specialist use-cases, creating highly differentiated services for print, mobile and other delivery

A low-level hum in the discussions was a recognition that fundamental change in company culture – editorial and commercial as well as business operations – is a complex but urgent requirement for achieving a long-term sustainable news service