The chief executive of Reach, the UK’s biggest commercial news publisher, has pledged to hire more journalists if the Government spends more on advertising within the industry.
In 2022 the previous Government spent less than 3% of its advertising budget with local news media versus 17% with Google and Facebook, according to industry body the News Media Association.
Speaking at Press Gazette’s Media 100 breakfast event in London on Thursday, Jim Mullen shared an offer he has made with the new Labour Government.
“What we’ve said to the government is, we don’t want a handout, right? Publishers shouldn’t look for handouts – if you do, you’re compromised anyway. So we will come to you and say, actually, give us a fair share of the ad revenue you give to the platforms… and put it into our local and regional news sites. And if we get that to us, I’ll put more journalists on the ground. So that’s the deal that is there.
“The amount of money that goes into the likes of Meta and the platforms – give it to us to put into the [Liverpool] Echo, give it to Newsquest to get into their regionals, put it in National World, and I can’t speak for them, but if that went to us, then there would be more journalists on the ground the day that that decision is made. I mean, what a deal.”
Mullen later added: “We don’t want to see advertising going into platforms, because they’re not making a commitment to invest in journalism. We will put journalists in the newsrooms if we get the revenue…”
Mullen said Keir Starmer’s Government is “very smart with this idea that news should be free at the point of access”.
‘Paywalls don’t work for us’
He spoke passionately about the idea that publishers like Reach should not paywall their content. Two days earlier CNN, the biggest news website in the US, announced plans to implement a metered paywall.
One of the UK’s biggest news websites, Mail Online, has also implemented a part paywall in the past year with about ten to 15 stories per day allocated to paying subscribers only.
Asked if Reach had looked at doing anything similar, Mullen said: “We have a responsibility to shareholders to look at all the ways we can increase value for the company, so we’ve run multiple tests on paywalls on some of our titles, and it just doesn’t work for us.”
However, he said there is a “fundamental reason” he is against paywalls: “I think you have to be really careful what you want your country to be… What environment, society do you want to live in where in order to get news, to inform your opinions whether it’s about right-wing protesters coming in from outside your community, whether it’s about social housing that’s not working, whether it’s about NHS Trusts where you can’t get your breast scan, you have to pay for that to make a decision.
“It’s always put to me pretty quickly that other publishers and other nations are doing it and that’s a good thing. Is it? Is that a good thing?”
Mullen added that he did not want to live in Scandanavia or Germany “where you need to pay for your news. This is Britain. We have a different approach to it… if you do pay for your news and you can’t afford to get it and you don’t know what decisions are getting made in your local NHS Trusts, and you don’t know what decisions are being made in the local councils, is it any surprise that people feel that they’re not involved?” he asked, issuing a warning about the rise of extremist views.
Addressing the room of senior publishing leaders, Mullen continued: “I’m not judging anyone else’s business models, there are a few publishers in here that I subscribe to, but I’m lucky, I can afford to do it, and some of the stuff I subscribe to is brilliant, and I’m willing to pay £9.99 for it.
“But don’t assume it’s the norm, because if we don’t have free local news in these communities, then we’re diluting democracy.”
‘Why is the BBC doing brownie recipes?’
Unlike many countries, the UK does have a free-to-air (though licence-fee funded) news provider in the form of the BBC.
Mullen repeated calls made by numerous commercial news publishers that the BBC is “overreaching” to the detriment of commercial news publishers.
“The BBC’s quite clear: it should be producing very specialist news and content that is not covered by commercial news publishers, because, luckily, we live in at least a partial free market… I think the country would be a lesser place without the BBC, but I think it’s overreached.”
He cited the example of Reach, Newsquest and BBC sites all publishing brownie recipes. At Reach, Mullen said, selling advertising on recipes funds the journalism done by the likes of the Liverpool Echo. “Why is the BBC doing brownie recipes?”
Users should see ‘gradual reduction’ in number of ads on Reach sites in next few years
Asked about the high advertising load on Reach websites, Mullen blamed the longstanding pension fund deficit and legal costs for phone-hacking claims for the need to show so many ads.
A pension fund agreement for Mirror Group Newspapers agreed a year ago means the deficit will be removed via payments of £46m each year until January 2028, while the dismissal of hacking claims on time limitation grounds last year means cases that began after October 2020 are now likely to be dismissed unless there are exceptional circumstances.
Mullen said these issues meant “we need to put a certain amount of ads on our pages.
“All that money is paid off in 2028 so we should see a gradual reduction. We’ve already launched a new platform which has managed the latency of it, which is on some of the regional titles, the Liverpool Echo, you will notice a difference, but over the last couple of years, it was pretty packed, and that is gradually getting better now as our obligations go down and as the investment in new technologies shows…”
Reach now has 12 million registered customers (people who have shared some personal data such as their email address) in total but nine million who have given permission to be served content every day, for example through a newsletter.
Mullen said Reach is “building relationships on a single line of content that people are interested in” giving the example of topics like Arsenal, cooking or gardening in the autumn, adding that “all we need” is “five, ten, 12 minutes a day” of people’s time in order to sell to advertisers at a higher yield.
He said in the Reach annual report published earlier this year that “the return on data-driven advertising is currently ten times more valuable than volume-related programmatic advertising returns”.
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