For-profit independent news publishers saw revenue decline last year despite growing audience, according to a survey by the Public Interest News Foundation.
PINF estimates that 300 to 400 independent publishers in the UK make around £30 to 40m in annual revenue combined. The figure was extrapolated from the £10m in reported income from the 100 publishers surveyed (most of whom are local news outlets). Publishers with an annual revenue of under £2m a year were included in the survey.
PINF’s third annual Index of Independent Publishers found that among the 100 publishers that responded to its online survey, average revenue for the sector was up 19% year-on-year, rising from £74,000 last year to £89,000 this year.
There was however, a large discrepancy between for-profit publishers who saw revenue decrease 14% to £81,000 and revenues of non-profit publishers which increased by 53% to £97,000. This is the first time the survey has recorded a higher average revenue for non-profit publishers than for profit-making publishers. Asked about the discrepancy in revenue, PINF executive director, Jonathan Heawood said that the non-profits were better able to attract grant funding reserved to charities and community interest companies. Some had also run at a loss this year.
There was a similar split in the size of unique digital audiences which while rising 11% overall, was up by 2.8 times compared to last year for non-profit publishers. The combined audience to for-profit publishers was meanwhile down one-third.
Taking the average reported audience of 860,000 people and combining this with an estimated universe of up to 400 independent publishers in the UK, the report authors suggested that this indicated that it was likely "that a large majority of UK citizens are reading news from an independent publisher." Most independent publishers are now digital-only.
Heawood said: "This year’s PINF Index shows that the independent news sector is steadily growing, with larger audiences, higher staffing levels and stronger impact. This is a testament to the hard work of indie publishers across the UK. But it also reveals the deep challenges facing the sector, as revenues continue to lag behind audiences, and indie publishers are still left out of most industry support schemes."
Non-profit publishers also grew faster on social media than their profit-making counterparts. They saw their average number of Youtube subscribers increase by eight times, Instagram increase by five, Twitter by three and Facebook by two compared to last year. Across the whole sector, the average title has 6,500 email subscribers, up from 2,000 last year.
The survey did not include licensed broadcasters (including community radio stations) due to their distinct economic and regulatory environment. Four in ten respondents (42%) were IMPRESS regulated; 13% were IPSO regulated and the rest were not regulated by either body.
Two thirds (66%) of respondents were focused on local news, 10% on regional news, 15% on national news while 9% were international in their coverage.
Revenue is a major challenge
Despite their large reach and increase in income, revenue remains one of the biggest obstacles for the sector with sustainable funding challenging to find. The cost of living crisis was cited as an additional strain on revenue due to among other things, rising print costs. Last year, around half of respondents said they had a print publication, a figure which had dropped to 27% this year.
Despite rising costs leading many publishers to conclude that savings were necessary, many publishers however, felt in the words of one survey respondent that "there is nothing left to cut."
Among the specific revenue challenges, publishers cited were difficulties in attracting advertisers, increasing capacity to match ambitions and challenges in encouraging people to voluntarily pay for news.
Ideas to raise more income included paid-for newsletters, expanding membership schemes and selling more advertising.
Advertising revenue, mostly direct sales, remained the main income source for independent publishers, increasing from 45% of revenue last year to 52% this year. Government advertising however, fell sharply from 12% last year to just 3% this year. Grant revenue which made up 20% of revenue, was also down on last year, which PINF said was possibly due to the end of pandemic support.
Regular small donations from readers were the most common source of reader revenue making up 60% of audience income. Another 22% of reader revenue came from membership programmes, 9% from print sales and 5% from micropayments.
In the report foreword, Heawood underlined the strong need for an independent publishing sector given the advertising pressures facing corporate publishers.
He wrote: "The advertising that once funded public interest journalism has migrated to digital platforms, where it funds misinformation and influencers. Some commercial publishers have responded by cutting journalists’ jobs and pushing out a high volume of attention-grabbing online content.
"We fear that this marks a race to the bottom, where audiences will become ever less trusting of journalism and more likely to avoid the news altogether."
Heawood said that such publishers had little incentive to change since they continue to receive the bulk of public funding in the form of government advertising contracts in addition to part of the BBC licence fee.
The survey also uncovered increased professionalisation in the sector. Titles were found, on average, to employ 2.9 full-time equivalent staff, a slight increase on last year (2.6). While non-profits reported employing fewer people, staff hours increased, while for-profits reduced staff hours but reduced the total number of people employed even more. The sector was found to be less reliant on volunteers which Heawood said pointed to a "growing professionalism" of the sector.
Publishers also considered themselves to be more impactful this year, with the average independent publisher self-rating their impact 15% higher compared to 2022. The average non-profit reported its impact at 72 points (out of 100) while the average for-profit scored it at 63 points. The two-most commonly perceived impacts were their contribution to increasing public debate and changing public opinion (43% of respondents), followed by increased civil engagement (32%).
While most publishers said that they made some effort to serve diverse audiences, staff make up did not reflect the readerships that publishers are reaching or trying to reach. Just 22% of employees in the sector were women while 19% of leadership roles were held by women. In the UK corporate publishing sector in contrast, 35% of 'top editors' and 40% of journalist are women, according to the Reuters Institute. An average of 4% of employees and 4% of leadership staff of independent publishers meanwhile are from ethnic minority groups, including white minorities, far lower than their UK population share (25%).
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