Almost 60 of the UK’s independent publishers earned a combined revenue of less than £5.4m in 2020 despite a reach of 10.1m people per month, according to a new report examining the impact of the digital economy on small publications.
By comparison Reach, the UK’s largest commercial publisher, reached an average of 42.1m users per month with revenue of £600.2m while JPI Media, the third biggest, attracted 14.8m monthly uniques and made revenue of £88.2m.
The findings came in the Public Interest News Foundation’s first Index of Independent News Publishing in the UK which surveyed 56 independent publishers with turnover below £2m because of concerns the digital market is having a “particularly harsh impact” on them.
The survey, carried out in February and March, covered a range of titles across print, digital, audio and video but not licensed broadcasters because of the different regulatory system they abide by. Most were members of the Independent Community News Network, the regulator Impress, or both.
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PINF, led by Jonathan Heawood (pictured) who joined from his role as chief executive at press regulator Impress, said the findings showed how millions of people rely on small independent publishers for vital information but their reach far outstrips their revenue.
Competing with tech giants
Many said they found it hard to compete with Facebook and Twitter’s “grip on people’s eyeballs” or to persuade the platforms to verify them, making it harder to monetise their content.
PINF urged the Government to recognise the role of independent news publishers through Ofcom and the new Digital Markets Unit as they start regulating the relationship between tech giants and news media.
These publishers are operating on “shoestring” budgets, with their median income just £42,224. Four in ten of them generated less than £20,000.
Using 32% of their total expenditure on editorial costs, each publisher produces an average of 1,000 pieces of content each year and reaches a median of 36,000 unique users each month.
Dr Clare Cook, senior lecturer at the University of Central Lancashire who co-authored the report, said: “Digital open access publishing tools have created a myriad of opportunities to create new public interest news media, but finding a way to be remunerated with a corresponding slice from the digital economy remains a challenge.
“Many are lean operations generating sustainable but small incomes of less than £20,000. Advertising still makes up a significant part of the revenue mix, and the transition to reader revenues is small.
“Clearly, we need more granular understanding of workable revenues, how to generate better returns on investments and the success factors that can drive higher incomes and growth for those for whom economies of scale and scope are not necessarily the forward path.”
The difference between median revenue at those focusing on national news versus local or niche news was vast: £102,008 compared to £21,099.
The report said: “In this way, the digital economy is contributing to a market failure for important forms of journalism. Local and niche forms of news inevitably have smaller audiences than national or general news.
“However, these smaller audiences are no less important. The digital economy’s bias towards scale is not only contributing to a market failure; it is widening the democratic deficit, leaving some communities disenfranchised, and vulnerable to misinformation and disinformation.”
Quarter of revenue from grants
The report drew comparisons with the US market, where 47% of non-profit publishers’ revenue comes from grants. In the UK this was 25%. Heawood told Press Gazette last year grant funding “has to be part of the long-term picture for journalism”.
Meanwhile only 7% of the publishers surveyed said they had received Government advertising or public notice revenue and several complained they missed out even if they had a greater reach than the rival larger publishers in their area.
The ICNN, which represents 108 UK hyperlocal publishers, called for access to any Government, public health or NHS advertising campaigns to be shared with them alongside the News Media Association’s national and regional members as the Covid-19 crisis unfolded, but no policy to this effect was ever introduced.
A third of the publishers in the survey said the best support they could receive would be equitable access to funding and advertising contracts in line with larger organisations.
This was echoed in a recommendation by PINF, which also suggested local or niche titles should receive additional support from policymakers and philanthropists so they can provide vital coverage even when it is commercially unviable.
The report said philanthropy could "unlock" innovation in public interest news and help to "build the independent sector’s capacity for growth".
Most of the publishers said revenue was their biggest challenge. A significant minority pointed to “big tech support for larger organisations” - Facebook and Google make ad-hoc deals with major publishers and Facebook funds community news reporters placed with legacy brands - and “government favouring status quo organisations”.
Independent publishers are heavily dependent on advertising revenue, which has been hit hard during the Covid-19 pandemic, making a third of their revenue, or £1.8m, from ads last year. A third of ad revenue came from direct sell display and classified advertising.
Only one-sixth of revenue at the publishers in the survey came from readers, whether through memberships or subscriptions. Those with a higher percentage of membership revenue tended to be newer, non-profit co-operatives.
The report concluded that having a good engagement strategy was good for revenue, with the publishers with the highest revenues running more webinars, ticketed events, talks and email newsletters.
It also linked having a diverse staff with higher revenues, noting that organisations with a higher proportion of women had higher revenues. However 70% of the publishers employed no ethnic minority staff.
Post-Covid opportunities
Almost a third (30%) of publishers in the survey said their "greatest opportunity" in the next five years was to take advantage of the public's post-Covid awareness of the importance of local journalism.
The responses highlighted the opportunity for independent publishers that have "genuine connected audiences", saying many of them are covering news stories that may otherwise go untold.
Others expect to take advantage of any negative feelings towards the so-called mainstream media, with 14% saying this was their biggest opportunity.
Charts by Aisha Majid
Picture: ivosar/Shutterstock
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