Scale of crisis facing news industry is exposed by NMA report: Google and Facebook must start paying fair share to publishers - Press Gazette

Scale of crisis facing news industry is exposed by NMA report: Google and Facebook must start paying fair share to publishers

media companies subsidiaries tax

The UK regional and national newspaper industry is still miles from making the transition from print to digital.

And thanks largely to the success of Google and Facebook at selling advertising (partly on the back of our content) much of the industry may never get there unless there is a big change in the way these giants operate.

The scale of this calamity is outlined in a report from the News Media Association which sets out how in 2015 the UK’s national and regional newspaper publishers had collective revenue of around £5bn – a figure which it said has halved since 2004.

Some 88 per cent of that revenue comes from print versus 12 per cent from digital.

The NMA reckons average revenue per print reader of £89 a year for publishers versus £15 from digital ones.

I suspect the imbalance between print and digital at many publishers is even more severe than that.

Looking at published data from The Guardian/Observer and the Daily Mail/Mail on Sunday I calculate that their daily print readers are worth £136 and £140 a year.

These are the UK’s most successful national newspapers online and their daily digital “unique users” are worth £10 and £7 a year each respectively. Unique users are different devices and may, or may not, equate to a similar number of people.

The table below takes print readership from the National Readership Survey and online daily users from ABC.

   Print revenue   Daily print readers   £ per reader   Digital
 Online daily users    £ per user 
Mail titles  £484m                     3,567,000                          136  £93m                   14,000,000                    7
 Guardian and Observer  £128m                         910,000                          140  £82m                     8,000,000                  10

Newspaper print revenue and advertising are in sharp decline. Online advertising is expanding vastly, but is all being hoovered by Google and Facebook.

Last year the UK advertising industry was reckoned to be £20bn. Some £8.5bn went on the internet (up 17.3 per cent) for which read Google and Facebook.

National news brands and their websites took £1.2bn (down 11 per cent) and regional newsbrands took £1.2bn (down 6.2 per cent).

To understand what all this means in terms of local democracy and ‘boots on the ground’ reporters, look at the annual report of the National Council for the Training of Journalists.

In 2005/2006 some 535 reporters took their senior journalist qualification.

This is test for reporters who are significantly serious about their trade to take an additional test after at least 18 months in the job (after already passing the post grad NCTJ diploma) to test their newswriting skills and legal and ethical know how.

Those who pass their NCE (now called an NQJ) may still be paid a comparative pittance (£18k to £20k). But they are an elite cadre of highly effective and well trained journalists.

In 2015/2016 the number taking this test fell to 216. This year it will be lower still.

Plenty of new journalism jobs are being created in this digital age (as the latest figures from the ONS suggest).

But these jobs are not for feet on the ground reporters covering council and court meetings, answering the phone to give a voice to readers and holding those in power to account.

As the NMA sets out in its report, more and more people are getting their news from social media and third-party aggregators. But Facebook (and it is mainly Facebook) is keeping all the advertising revenue from those eyeballs.

Facebook publishes with total impunity from privacy, libel or copyright law. News publishers face all these legal responsibilities and many more.

The Government is currently proposing to force newspapers into a state-backed press regulator while doing nothing about social media organisations who face no consequences for fake content which undermines democracy.

There is a grotesque imbalance in the market and the consequence is less professional journalism, a poorer democracy and fake news and propaganda taking the place of investigative journalism.

As News UK chief operating officer David Dinsmore said today, something must be done “to ensure that news media publishers’ ability to fund the original agenda-setting news and information our readers want us to produce is not fatally undermined by third parties who gain so much from our investment while contributing very little”.

The answer is that Google and Facebook must start paying their fair share to the news industry for use of the professionally-produced and copyright news content which their businesses are largely based upon.



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Author: Dominic Ponsford

Dominic Ponsford is the editor of Press Gazette


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