National Assembly members call on Welsh Government to investigate 'sustainable business model' for journalism in region

The Welsh Government should investigate a sustainable business model for journalism in Wales, according to a report by the National Assembly’s Culture Committee.

The report, released this week, marks the end of months of inquiry into news journalism in Wales.

It said: “We believe that the position of news journalism in Wales is such that serious consideration should now be given to some way of subsidising public interest journalism in Wales.”

Separately a review into the sustainability of news journalism, the Cairncross Review, has been announced by the UK Government.

Members said they believed Wales faced the “most challenging news environment in the UK” which they said was a “profound public policy issue” that needed addressing “as a matter of urgency”.

The report said: “The Welsh Government needs to engage with this issue as a high priority for further research and further public investment.”

Wales has more than twice the number of hyperlocal news providers than expected, based on its share of the UK population, but members said they “cannot, alone, plug the gap left by the absence of a robust indigenous print media”.

Trinity Mirror is the most significant newspaper owner in Wales, under its Media Wales brand, and the biggest news provider outside of the BBC in the region.

It owns the Western Mail, South Wales Echo, Wales on Sunday, South Wales Evening Post, Llanelli Star and Carmarthen Journal, as well as a series of local titles in South Wales.

But, its business model of buying up titles and either merging or closing them, was not supported by members of the Culture, Welsh Language, and Communications Committee.

The report said: “We recognise that this is a challenging time for news providers, who have had to adapt their business models in order to mitigate the impact of declining print revenue.

“However, we are not convinced that closing or amalgamating titles and cutting back on locally-based journalism is the right way forward. Unless action is taken to counteract the negative impact of these trends then the situation will continue to worsen, whereby those living in Wales will have access to less and less coverage of the issues that interest and affect them.

“While we understand the reasons for Trinity Mirror’s strategy to maximise advertising revenue online, and to use print revenue to protect and further its digital first strategy, there are dangers to this approach which have not been adequately addressed.”

The committee’s report also criticised Facebook and Google, which take the lion’s share of online advertising in the UK, and said both needed to up their support of the news industry.

Both web giants turned down an invite to speak to the committee for its inquiry, however Google did submit written evidence about its Digital News Initiative project which funds innovations in the news industry.

The report said: “Though we welcome the support that Google currently provides to news journalism in Wales, given its global dominance of the online advertising market and the condition of Wales’ news journalism sector, we believe they need to increase this support significantly.

“It is highly regrettable that Facebook declined to contribute to this inquiry, given the market dominance they also enjoy and we also call on them to consider how they can put something back into the journalism which does so much to help support their business model.”

During the inquiry, as part of a draft budget agreement with Plaid Cymru, the Welsh Government proposed funding of £100,000 over two years for “start-up grants for journalists seeking to set up their own business in hyperlocal news”.

But committee members said they were “not entirely convinced” that this was “best use” of the payout.

The report said: “The fact that Wales has twice the number of hyperlocal start-ups than might be expected given its population shows that starting up hyperlocals in Wales is not a problem: sustaining them is.

“The consultation has led us to conclude that the new funding should be made available more broadly than simply to new hyperlocal start-ups through Business Wales.

“Though there was not a broad consensus amongst consultees on how the funding should be used, most believed that a contestable fund, which is also available to existing hyperlocal news providers, would be most effective and would provide best value for money.

“We agree with this approach. We also agree that the thoughtful response from the Centre for Community Journalism in Cardiff University should be given serious consideration by the Welsh Government. In particular we agree that:

  • The scheme should be contestable
  • Funding should be available both to new entrants to the field and incumbents looking to innovate and develop more sustainable business models
  • Funding should be available for platform and software creation that supports and enhances innovation in the provision of public interest local journalism, as this would help to improve sustainability across the sector.

“We are also attracted to the concept of publicly-funded news hubs as suggested by Dr Rachel Howells.”

The report also recommended a Welsh Government review of the BBC’s Local Democracy Reporters service, which aims to plug a democratic deficit left by the closure of titles and staff cuts.

It recommended that the BBC review its scheme after six months, as members expressed concerns that LDR would replace staff rather than be brought in to bolster ranks.

Picture: Reuters

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