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News agency employing 30 calls time due to falling publisher budgets

Michael Leidig blames fall in commissioning budgets and newsroom AI for difficulties.

By Dominic Ponsford

A news agency network that employs 30 people and distributes stories to the UK national media has ceased publication.

Michael Leidig’s news agencies are Newsflash, Central European News (CEN), AsiaWire and Clipzilla. He said a shortage of commissioning editors and falling budgets had hit his company’s finances and voiced concern that AI-written in-house content was putting agencies like his out of business.

Leidig has offices in Austria and Macedonia and also has staff working in China, Egypt, Turkey and Iran.

The operation works like a traditional local news agency but working internationally, sourcing local stories and selling them to media in the UK and elsewhere.

He said the company’s income had dropped to around £25,000 per month making the business no longer viable. It needs to make £47,000 each month to cover costs.

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Chairman of the UK National Association of Press Agencies Jon Harris wrote in Press Gazette in 2022 about how rates paid by national newspapers had barely changed since the 1980s. The fee paid by a UK national newspaper for a lead story on a news page varies from around £100 to £150.

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Leidig said the rates being paid made it all but impossible for agencies to do original journalism.

He added: “One of the biggest problems is that many publications don’t want to pay for the story, only for the pictures or video.

“One news editor told me that we need to view stories like picture captions, they are only there to sell the illustrations.

“Others argue that there is no copyright on facts, only on word order and they can now do their own word order with AI.”

His agencies supply content to publications including The Times, The Telegraph, Dagbladet, New York Post, Mail, Metro, Mirror, Express, Star and The Sun.

Leidig said: “Our agency is not alone, I’ve spoken to other agencies that are in the same boat and struggling to work out how they are going to be able to continue in the current climate.”

CEN was founded in 1995. In 2006, it pitched a story to The Sunday Telegraph about the trafficking of women from eastern Europe to the UK and the resulting investigation won that year’s Paul Foot Award for investigative journalism.

The agency balanced popular ‘viral’ content with more serious news. But it was dealt a serious blow when Buzzfeed News published an investigation in 2015 accusing Leidig of distributing sensational stories not based in fact.

Leidig sued Buzzfeed and lost in the US.

He has now published a book giving his side of the affair, based partly on Buzzfeed’s legal disclosures during the case and using their headline as its title: The King of Bullshit News.

Leidig said the agency has faced an uphill struggle since the Buzzfeed investigation.

He hopes an ambitious project to create a new freelance journalism market based around cryptocurrency could yet invigorate the flagging agency market.

Leidig said NewsX is a community interest company, meaning it sits between a charity and a normal not-for-profit company and is created with a purpose in mind. The NewsX purpose as registered at Companies House is journalism.

He said: “I believe it could reinvigorate the news agency model and lead to NAPA agencies becoming the number one independent suppliers of content in the UK, and together with other freelancers could end up with a 25% to 30% share of the UK news market without having any publishing organ of its own.

“Our model is to support traditional media partners with exclusive content at no cost, they in turn verifying it with their brand. It’s a perfect partnership.”

Other than Leidig, a handful of people are involved who he described as “ordinary working journalists… whose expectations are simply to create something that pays a living wage to others like us for a job that should be the best in the world, yet is most often voted the worst”.

Leidig described cryptocurrency as “a great solution for funding news at a grassroots level and it’s inherently community oriented”.

He said the current business model is “no longer viable, and crypto has the potential to replace it and fund a return to the traditional values of newsgathering with the separation of church and state and original source reporting”.

He explained: “We have a vast network of media partners that we either supply directly or via other syndication partners, and this enormous network is available to publish content in the future in partnership with a cryptocurrency.

“The huge advantage is that we can build a newsroom of opposites so that we can cover any story that we want knowing that there will always be someone somewhere that wants to publish it.

“We have registered the NewsX Newshound trademark and will be launching it as a memecoin on the Solana blockchain. If it works, the first thing we’ll do is bring other agencies and freelancers into the equation, and the second thing we’ll do is fund a network of reporters to cover UK courts.

“It is one of the founding principles of UK legal system that justice is not only done, but is seen to be done, but every day people are appearing in court and nobody knows about it. It is not exactly an incentive not to do something wrong when you know you can pay a fine and nobody will ever know.”

Leidig is also continuing to run his alternative press regulator, Quis Custodiet, which aims to provide redress for those who lodge complaints against unregulated publishers.

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
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