Britain's corporate media are in a desperate situation: with revenues plummeting, they are begging the government to act.
In March, Matt Hancock, then Secretary of State for Digital, Media, Culture and Sport, spoke at the Oxford Media Convention.
Mr Hancock expressed concern about the rise of “fake news” and its impact on corporate media, and society as a whole. He highlighted that the lack of regulation of individuals making YouTube videos in their bedrooms meant that they were in an unfair competition for stories with corporate media.
But his main concern was the commercial side of media, its “sustainability”, and he spent a lot of time discussing the Cairncross Review, which was published about a month ago.
Chaired by Frances Cairncross, the review will “draw on experience from journalism, business and academia to tackle the thorny and complex issues at the heart of journalism sustainability”, and will “take a calm look at how journalism is delivered in this new world, explore areas where innovation is working well and whether intervention is needed to safeguard the future of a free and independent press”.
Corporate media has been slow to react to the rise of the internet, and in particular the impact of social media platforms like Facebook and Twitter. The availability of content “for free” on these platforms left corporate media with a cash crunch that they hoped internet advertising would make up for.
But internet advertising is different from print advertising. In the days of print, publishers could charge for advertising space based on circulation. Advertisers had no way of knowing exactly what percentage of a publication's readers actually saw their ad, or, more importantly, what their conversion rate was.
Now, advertisers pay only based on the number of impressions their ads receive, and those impressions are tracked. And even worse (for publishers), advertisers now know exactly how often their ads are clicked and how often that translates into sales.
The prices that advertisers are willing to pay for ads on websites have been set accordingly and are orders of magnitude cheaper than in the “good old days”.
Even worse for publishers is the impact of having ads on their websites themselves: they slow down websites immensely as readers wait for the ads to load, and many publishers now use ad blockers, instantly cutting revenue to zero.
The results have been devastating for corporate media: They have fired their best journalists, imposed reporting quotas on the junior staff they currently employ, and charged content to limit its reach to only the few who were willing or foolish enough to pay.
As a result, publishers, desperate to grab reader attention, are churning out low-quality, unverified content that rehashes each other's news stories and corporate and government press releases — all the while accusing social media of being an echo chamber.
So the question remains, how will they raise the money?
Paywalls and memberships are the two primary non-advertising based revenue models used today, with other models under consideration.
For example, a “platform” for print media similar to that of broadcast TV: a branded platform equivalent to Sky or Freeview, open only to “approved” publishers, with access to all content through a single subscription and receiving a share of subscription and advertising revenue generated across the platform.
Or what about NGOs and campaigning groups funding “investigative” journalism? There is discussion about the possibility of Greenpeace or Friends of the Earth paying for the production of content.
These and other options are being considered, but it remains to be seen whether they will be fully embraced.
In the meantime, Cairncross Review is their best option, and perhaps the social media platform will pay for it.
The News Media Association, the “voice” of the UK's corporate media, said:Fair and equitable content licensing fee agreementsThe bill would “ensure news media publishers are fairly compensated for the use of their content by tech giants and protect the future of independent journalism, the foundation of our democracy.”
“The biggest concern today is the loss of advertising revenue that has traditionally supported quality national and local journalism, now going to global search engines and social media companies who contribute little to the costs of producing original content from which they make huge profits,” the NMA said.
Some would argue that they have a point: publishers' revenues are plummeting while Google and Facebook in particular are raking in billions, and to them, it's the fault of giant corporations that “don't make a meaningful contribution.”
Is this the case, or is what we're seeing here just market forces – that no one is buying what's being sold?
The Cairncross Review is due to report in early 2019.
