Local radio
Local commercial radio has an unequal fight against BBC local radio: commercial radio spends £170 million per year on programming against the BBC's budget for local radio of £400 million.
In audience terms, there has been a steady drift from local radio to national radio, especially towards BBC Radio's 2 and 4.
Advertising revenues peaked in 2003/04 and have been steadily declining since then.
In general there is an over-supply of commercial impacts - advertising volumes are exceeding demand, which obviously implies falling rates.
Claire predicts that local commercial radio will be pretty much extinct within the next five to ten years.
Local newspapers
The sector is declining, and the rate of decline is accelerating. Income for local newspapers is heavily reliant on advertising which has been decimated in waves - first job ads, then property (and now retail).
BMRB figures show the time being spent with newspapers is declining even faster than newspaper's reach - especially amongst young people and most strongly amongst 20 to 24-year-olds. So even where people are still buying a Sunday newspaper for example, they are allocating less time in their day to reading it.
What's left is a hard-core of elderly local newspaper readers who are also 'Internet rejectors' - households which are not online and which see no point in going online.
The result is that ten to fifteen local newspapers are closing each week. And Claire predicts that half of all jobs in local newspapers will be gone in five years.
Advertising market
Also looking forward five years, the Advertising Association predicts that 34% of advertising spend will go online by 2013.
But that does not mean that online is the answer for local media. The value of a regular reader of a local newspaper, including direct and advertising revenues, is estimated at £91 per year. But a regular visitor to a local newspaper website is generating just £3 per year.
So where are the advertising revenues going? Some will have followed classified advertising online to sites like Monster, Autotrader, Gumtree and eBay. But the biggest share is going to our old friend Google. On Google, Claire made the interesting point that an algorithmic approach to content leads inevitably to monopoly, whilst a people-based approach encourages diversity.
Whilst Google is in many ways a blessing, it cannot be said to have delivered much value in terms of employment. According to Claire, on UK revenues of £1.2 billion, Google employs 10,000 people whereas the UK press, with total revenues of £2.4 billion employs a total of 175,000 people. (Actually I'd be amazed if Google employs anything like 10,000 people in the UK - there may be 10,000 staff across the UK offices and the European headquarters in Dublin.)
Can anything be done?
Claire Enders argues for a rapid removal of controls on the local media market, including cross-channel ownership restrictions which prevent the same company owning local newspapers and local radio stations.
Meanwhile newspapers are too reliant on Google for traffic to negotiate fair commercial terms for the content that Google indexes - so perhaps there is a role for government here, via a Google windfall tax, to redress the balance.
As for local radio, it seems unfair to blame the BBC for the poor performance of their commercial rivals. After all, very recently local radio stations were profitable - but the profits have not generally been re-invested in quality local programming.
One of the biggest problems with local media in general is not just that market dynamics have changed, but that they are changing incredibly fast. If we aren't careful, the diversity of local media will be destroyed before politicians and the general public really realise what is going on. By then writing a letter to the local newspaper or mouthing off on the local radio phone in will no longer be options. And advertisers will have lost an incredibly powerful way to connect to a local audience.
