Can the iPad save Fleet Street?

Will Steve Jobs go down as the saviour of the British newspaper industry? Quite possibly, if iPads are the big Christmas hit this year. That would mean they are becoming essential gadgets for business people, commuters, air travellers and the reading classes in general. They might just mark a turning-point for the fortunes of a British industry grappling desperately with dramatic declines in sales, defection of advertisers and woeful returns on the huge investments made in glitzy websites and marketing budgets. It is an industry praying for a miracle.

Few newspaper readers appreciate the nightmare facing the companies who produce them. Classified ads, once about a third of an average newspaper’s revenues, have steadily migrated online — a shift accelerated by the recession. Display advertising is now defecting too. And with so much content available cost-free on the web, and free-sheets given away to commuters, circulations are plummeting. Normal readers are also defecting — either grabbing a free-sheet on their way to work, or picking up their news via Google for free.

Newspapers everywhere have been affected but no country, apart from the United States, has suffered as much as Britain. Since 2007, UK circulations have fallen by a quarter according to a new OECD report. In America, they have fallen by a third — with 293 newspapers and 1,120 magazines folding last year alone. Advertising revenues may recover a little this year, but the trend is clear: over the last year, British broadsheets have seen declines of up to 16 per cent. Few businesses can deal with structural change on this scale. The losses are mounting.