The UK news industry could lose up to £500m in revenue to online platforms such as Facebook, Twitter, Google News and Apple News in the next decade, new research warns.
The figure is equal to 10-15 per cent of the industry’s revenues, according to the “Is Content King After All?” report, published today by Global consulting firm OC&C Strategy Consultants.
It says “online disruption” has already cost the industry an estimated 46 per cent in revenue within the last ten years and warns online platforms are set to become “more powerful in controlling the flow and consumption of news traffic”.
The report claims 41 per cent of UK millennials now rely on social media or shared content for their news, hitting digital subscriptions and advertising at established news brands.
Figures are based on an international survey of about 10,000 people as well as analysis on the impact of platforms across multiple industries.
Reuters said it was already putting “severe pressure” on existing media business models.
Last month, Facebook revealed its advertising revenue was up by 63 per cent to £4,740m ($6,239m) for the second quarter of this year, compared with the same period last year.
Cuts to staffing have been rampant across the newspaper industry as it reels from the loss of revenue from classified advertising and newsstand sales.
But today’s report warns cost savings are “unlikely to be a radical enough strategy to offset this predicted loss in revenue, most of which will hit the bottom line directly”.
Toby Chapman, associate partner at OC&C Strategy Consultants, said: “It’s already a familiar story in other industries such as music, and now the news industry looks next in line for platform disruption.
“The reaction of incumbent brands will be critical to what happens next. There are strategies that can be taken – by news and other industries vulnerable to the threat of online platforms – to avoid a similar fate.”
Chapman has proposed a “collaborative, industry-wide response” to the growth of online platforms in order to “retain control” of the market.
“It needs to happen fast, have broad industry support and, in order for it to work, focus on the consumer,” he added.
A feasibility study into how newspapers including the Sun, Guardian, Daily Mail and Daily Express might work together to find a solution to the decline in advertising revenue is said to be already underway.
Dubbed “Project Juno”, it is being chaired by former advertising chief executive Steve Booth.