The Review into the future of the UK news industry has delivered its final report. The report looks at the role of online platform in the markets for news and advertising. It makes recommendations on how to safeguard the future sustainability of the UK press and journalism.
The UK has a well-developed and growing online advertising market. Globally, the UK sits behind only the US and China in digital advertising, spending £11.5 billion in 2017 Industry analyst eMarketeer estimates Google and Facebook share of 37.2% and 19.6% of the advertising market in the US. In the UK, Facebook and Google were estimated to have 54% of all UK online advertising revenues in 2017.
The independent review, undertaken by Dame Frances Cairncross, was tasked by the Prime Minister in 2018 with investigating the sustainability of the production and distribution of high-quality journalism. It comes as significant changes to technology and consumer behaviour are posing problems for high-quality journalism, both in the UK and globally.
Disrupting news journalism
The ways in which news is provided and people find and read it are changing more rapidly than ever before. The internet has impacted and disrupted virtually every sector of society. This is particularly the case for the media, publishing and newspapers in particular. This digital revolution is bringing enormous potential benefits to consumers, but is also challenging the future of news provision.
Dame Frances was advised by a panel of experts from the local and national press, digital and physical publishers and advertising. Her recommendations include measures to tackle the uneven balance of power between news publishers and the online platforms. Platforms such as Facebook and Instagram, that distribute content. The report sought to address the growing risks to the future provision of public-interest news.
According to Dame Frances Cairncross, ”The proposals put forward have the potential to improve the outlook for high quality journalism. They are designed to encourage new models to emerge, with the help of innovation not just in technology but in business systems and journalistic techniques.”
The report examines the marketplace in which publishers now operate and asks if its fair. Or has the rapid growth of the big online platforms such as Google and Facebook, created distortions that justify government intervention. The platforms are taking a larger share of the market for advertising. In addition, they also provide the routes that many people use to find news online.
Fake news concerns
The review also looked at the overall state of the news media market. The threats to the financial sustainability of publishers, the impact of search engines and social media platforms. The report also looks at the role of digital advertising. Some of the report’s key findings include:
- Half of UK adults worry about “fake news” or disinformation. A quarter do not know how to verify sources of information they find online. So users need to get the right skills to spot fake news. Platforms must identify and quickly remove the deliberate spread of misinformation on their services.
- Although news is on television and radio, written journalism (print or online) originates the largest quantity of original journalism. This form of journalism is most at risk – particularly investigative journalism and democracy reporting.
Balancing publishers and platforms
The review offers some recommendations intended to create a better balance between publishers and platforms. It also aims to persuade the online platforms to use their position in more accountable ways. The key recommendations are:
- New codes of conduct to rebalance the relationship between publishers and online platforms
- The CMA to investigate the online advertising market to ensure fair competition
- Online platforms’ efforts to improve their users’ news experience should be placed under regulatory supervision
- A new independent Institute should be created to ensure the future provision of public interest news
- A new Innovation Fund should be launched, aiming to improve the supply of public interest news
- New forms of tax reliefs to encourage payments for online news content and support local and investigative journalism
- Google and Facebook also increasingly control the distribution of publishers’ content online. Because of their position, these platforms can impose terms on publishers without needing to consult or negotiate with them. This could threaten the viability of news publishers’ online businesses.
Department of Culture Media and Sport, Secretary of State Jeremy Wright said,
“A healthy democracy needs high quality journalism to thrive. This report sets out the challenges to putting our news media on a stronger and more sustainable footing. We face of changing technology and rising disinformation. Some things we can act on immediately. Others will need further careful consideration with stakeholders on the best way forward.
The report notes the need to measure engagement with public interest news. The report concludes that intervention may be needed to improve people’s ability to assess the quality of online news.
Enterprise Times: What this means for businesses?
When it comes to user data, the online platforms know vastly more about their users than almost anyone else, including news publishers. They can therefore personalise advertising to an astonishing degree. The choices a Google or Facebook user makes while on the platform tell the company a tremendous amount about what that person does, likes and buys. As a result, these platforms will remain particularly attractive to advertisers. Therefore, it not surprising the economic power these platforms wield in the digital advertising marketplace.
As a result, news publishing business is undergoing an extraordinary period of contraction. The decline is in both its main traditional sources of revenue: advertising and circulation.
The report suggests that the government must take steps to ensure the position of Google and Facebook does not do undue harm to publishers. But unfortunately, in this 157 page report, the authors fail to outline those steps. Asking these platforms to draw up codes of conduct is a pretty lame response. It will do nothing to ensure the long term viability that these publishers require.
Ultimately it was beyond the scope of this review to establish whether, legally speaking, platforms such as Google and Facebook are dominant. This was not a competition review. However, the question is increasingly urgent and requires policy-makers’ attention.