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Guardian editor Alan Rusbridger told a Lord's committee that an 'act of faith' was required when investing in a digital future.

Appearing before a Lord's communications committee looking into news media ownership - along with Times editor Robert Thomson - Mr Rusbridger said that classified advertising revenues of newspapers were being heavily eroded by services on the internet, presenting newspapers with an 'urgent problem'.

"For at least 10 years we are going to have to have an act of faith and pump money into digital markets without significant return… and we will do it with the expectation that things will change," he told the committee.

He speculated that the newspaper industry could have an 'Ipod moment' where a device is developed with the potential to consign printed newspapers to the history books.

Regardless of this, he added, the situation for local papers was more worrying than for national papers.

"Circulations of evening papers have been in sharp decline, consistent decline for 20 or 30 years… Google is killing off classified advertising, the property, car and job ads, so the two main sources of revenue are going.

"The response of virtually all owners is to cut back on editorial costs, so there is less to read and you get into a spiral of decline. Competition then comes in from the freesheets and further erodes them. It's going to be very tough.

"Because societies need news, web-based models will spring up, and are springing up in most countries including America, that are much more local and originate from citizens.

"They are really interesting things which may be more reflective of the communities than the local papers… I don't think the printed local newspaper has an optimistic future."

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Written by
Oliver Luft

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