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March 15 2010

10:38

No such thing as free money to save the local press

As I was leafing through the Guardian on Saturday morning I came across an article with the rather alarming headline

Google news tax could boost local papers, report says

Google and other websites that carry news they do not produce should be taxed and the money generated used to prop up local newspapers, says a report which warns control of the media is concentrated in too few hands.

I tweeted it and got a number of interesting replies:

The report comes from the Carnegie trust UK’s commission on Making Good Society. It does indeed set out a suggestion for Industry levies citing Institute for Public Policy Research research that a 1% levy on pay TV providers of 1% “bring in around £70m a year”

A similar fee imposed on the country’s five mobile operators could generate £208m a year. Making Google meet its full tax liability in Britain would boost the pot by a further £100m.‘ The same IPPR report argues that ‘such sums could save many local newspapers and web sites from closing down, could stop the destruction of local and regional news on ITV and could help new media start-ups to plug these gaping holes in public service provision – all without the taxpayer having to stump up any more cash and without having to raid the licence fee.’

But the report also makes it clear that the money would come with something of price

Levies on the use of aggregated material have the potential to generate significant revenue to support the production of new public service and local content, involving civil society associations. If this form of funding were to be explored, changes in regulation would be needed to ensure that revenues go to original news producers and not just to those who present and disseminate material. Original news reporting needs to be supported so that it is financially viable; this could require charging those who are not authorised to use and distribute this material.

Not quite free money from a google tax.

The whole report makes for an interesting read (I mean genuinely interesting not that other academic definition of interesting)

It’s pretty wide ranging but it singles out “democratising media ownership and content as one of it’s four main areas where “a stronger civil society could make the most difference”

A whole chapter (chapter 3) is devoted to trying to understand the pressures and drives on news production and the impact that has. They are clear that technology plays a key part citing radical cultural shifts associated with pervasive technology and the rise of ‘digital natives;’ as an uncertain driver of change. But the discussion is a bit more broad ranging:

…[D]espite the proliferation of online platforms, more of the news we receive is recycled ‘churnalism’ and aggregated content. Trends of concentration in media ownership and increased pressure of time and resources have narrowed the sources from which original news derives. Moreover, the centralisation of news production and neglect of local issues has particular repercussions for access to information across the UK and Ireland, especially in the devolved nations.

And it’s clear where the problem is:

…the central issue affecting traditional news providers is not the decline of audiences or interest in news, but the collapse of the existing business model jeopardising the democratic role of journalism. According to the National Union of Journalists: ‘The media industry is essentially profitable but the business model is killing quality journalism.’

Media concentration.
When I first read the Guardian article I bristled at the idea of a google tax of newspapers. Why? Because we would essentially be propping up commercial organsiations who still work at a profit. It would be akin to a bail out. So I found myself drawn to the areas of ownership and centralization in particular. The report is pretty robust here.

The challenge of creating original content and the diminishing number of newspapers is further compounded by the concentration of media ownership in relatively few hands…..with four dominant publishers controlling 70% of the market share across the UK

That concentration of ownership and the influence it exerts is cited as a “key obstacle to transparent policy-making which incorporates a sustainable role for civil society associations” Which comes from the ‘continuing and intimate relationship between key corporate interests and policy-makers; a relationship whose bonds are rarely exposed to the public’

Their suggestion seems to be that the Scott Trust/Guardian model is more likely to serve the development of a pluralist media landscape than a purely commercial one. But it sounds a note of caution

While independent funds directly supporting journalism can come with strings attached and endowments are not immune from economic pressures, philanthropic funding can help preserve journalistic independence and secure guarantees on public service content.

General suggestions.
The big ticket suggestions like tax breaks and levies are balanced by some more specific suggestions that form the main discussion of the chapter.

  • Growing local and community news media.
  • Protecting the free, open and democratic nature of the internet.
  • Strengthening the transparency and accountability of news content production.
  • Enhancing the governance of the media.
  • Protecting the BBC.
  • Redirecting revenue flows to promote diversity and integrity.

Their ideas for strengthening transparency include the suggestion of a Kite mark that shows no dis or mis-information. Good luck with that one.

But back to funding, the last three points are interesting in themselves.

When they talk about enhancing the governance of the media they say that”

“All news organisations in receipt of public funding should actively engage with the public and with civil society associations, through their governing bodies as well as through their daily practice.”

Which could only really mean the BBC right? But in developing the suggestion of redirecting the revenue flow they:

…want to see new funding models explored: for example, tax concessions, industry levies or the direction of proportions of advertising spend into news content creation by civil society associations, or into local multimedia websites.

The price of public money.
My reading of the report was that nothing comes for free. In an earlier chapter the financial sector comes in for a real battering. But though the media orgs are more delicately handled the implicit message is still the same. All the money that could come from tax breaks, funding and other sources comes at a cost. That cost is de-centralisation, openness, stronger regulation and in transparency (a phrase that seems to disappear mid report to be replaced by integrity)

Would be nice but I can’t see it happening.

The full report is available here.

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November 04 2009

15:08

Stop rearranging the deckchairs

If you want to ascribe something importance you traditionally don’t put the word ‘sub’ before it. The immediate message sent by the Broadcasting Sub-Committee’s report on Welsh newspapers is that the subject is not very important. Furthermore, asking the Broadcasting Sub-Committee to report on Welsh newspapers is the political equivalent of asking a veterinary surgeon to replace an elderly relative’s hip.

Today, Assembly members will discuss the report, and Assembly time will be largely wasted in the process. It is a document that contributes very little to the overall debate about the future of Welsh newspapers. This is primarily because any report that attempts to deal with the decline of newspapers but discounts the opportunities of new media so casually is largely useless. It’s like trying to explain to someone how to grow an apple tree, without ever mentioning seeds. You can do it, but chances are it won’t make an ounce of sense.

The headline recommendation of this report would be nothing short of catastrophic for the future of the Welsh media if the UK government were to implement it:

Recommendation 1: The Welsh Assembly Government should make representations to the UK Government seeking assurances that cross-media rules are relaxed to allow the exploration of new partnerships.

The Welsh media is, and has always been, structurally weak. This weakness has been significantly increased by the dominance of media monopolies in Wales. This, in turn, has had a detrimental effect on plurality in the Welsh media and has been a plague on diversity of press opinion. It also means that when one organisation is failing, lots of newspaper outlets suffer.

The Broadcasting Sub-Committee’s recommendation is that rules that restrict media organisations from venturing into other marketplaces, like TV and radio, should be relaxed. This is a truly astonishing recommendation. The desperate problems the newspaper industry in Wales faces have come about, in part, because of monopolies. This report is seeking to extend the power of these monopolies. This is presumably so that they can then ruin broadcast news in Wales as well.

This recommendation is in many ways what we should expect from a report that consulted so widely with local newspaper owners, but never sought to ask them how they thought they might be culpable in the demise of their own titles. It is to be expected that they would ask for more power to branch out into other media and then set about squeezing every last penny from it, with little or no regard for the public service they should provide. What is also striking about this report is that Bob Franklin, an informed commentator and media expert, appears to have been largely ignored.

Franklin, quite rightly points out in the report that cross-media ownership rules are already dangerously close to collapsing in on themselves because media organisations so readily ignore them. He states:

‘…banks are suggesting to media companies that they ignore existing competition regulations which they see as primitive and as not suitable for the digital age because monopolies are understood within geographical boundaries…I think that big financial institutions are recommending a sort of ‘gung-ho’ challenge to existing regulation along the lines of ‘see what they do, call their bluff.’

The report cites the IWA in response: ‘There is something to be said for enabling some of the strengths of newspapers such as the Western Mail and Daily Post to be used to strengthen news coverage on commercial radio.’

Well, there you go then. The problems that the Welsh newspaper industry is facing could be solved by putting Western Mail content and/or journalists on commercial radio stations. Despite using this strange defence against Franklin’s concerns the report then does something very odd. It makes a recommendation that seems directly opposed to the previous one. Recommendation two states that:

The Welsh Assembly Government should make representations to the UK Government seeking assurances that any move to relax regulations relating to cross-media ownership should be accompanied by measures to protect plurality of local media.

This is directly contradictory. It is not possible to maintain plurality in local or regional media when you are reducing the strength of cross-media ownership rules. You either do one or the other, you can’t do both. You either defend the plurality of media or you allow large media groups to own more than one type of outlet.

When AM Huw Lewis made his announcement about the possibility of local newspapers having a stake in digital news channels, it was welcomed as an interesting idea by many. Commentators, on the whole, failed to understand that having more media outlets doesn’t necessarily increase the plurality of perspectives. The Broadcasting Sub-Committee has made the same mistake. Plurality in the media needs to be plurality of opinion, and the recommendation of this report would put that at risk by creating more media outlets that are saying the same thing.

Another of the recommendations in this report is about improving government support for newspaper groups. This, as a suggestion, has two fundamental faults. Firstly, the independence of media from government is vital in any democracy, and cannot be guaranteed if media producers have to apply for government grants. Secondly, and perhaps most importantly, large media corporations in Wales bear a heavy responsibility for the problems the Welsh media is now facing. Giving them a bail out is no better than bailing out bankers. And, of course, as with the bankers there is no guarantee they won’t just screw it all up again.

Despite all of this, there are some good points made in the report. The recommendation that there should be a review of the provision of publicly funded training courses for journalists is an excellent idea. The report also supports the idea of a Welsh Media Commission and/or a forum for discussing the newspaper and broadcasting industry in Wales. This is an important idea which, should it come to fruition, would at least ensure major media issues don’t get swept under the carpet.

However, overall, it says little that is useful. This report ultimately fails because it talks about rescuing organisations that are dangerously out of step and out of touch with developments in their own industry. From Murdoch down, the media world is attempting to come to terms with an enormous shift in an industry that has been largely unthreatened for the best part of 300 years. New media is growing in strength, and the Assembly needs to spend some serious time looking forward towards it, and not just backwards to print.

It would, of course, be remiss to ignore the problems with new media. There are certainly plenty of them. Many popular news websites, for instance, still rely on the prestige and content of the print publications that they are associated with. Online news still only reaches certain social strata, with a large number of those on the breadline not bothering with internet access. Standards in online journalism, with a few exceptions, are often no better than those on local newspapers, with reporters relying on material that is secondary sourced, and rarely bothering to pick up the phone. As much as web 2.0 has contributed in terms of interactivity, an awful lot of user generated content is just rubbish, produced by hobbyists both unpaid and untrained.

These are big problems, but they are not insurmountable, and they are also not the reason this particular report dismisses new media so easily. The report brushes aside any future model of new/old media interaction because it is unable to envisage how this would be cost effective. This is in the main because the majority of newspapers still derive all their profits from the print side. The low value that advertisers ascribe to online placements means that news websites cannot survive by them alone. In short, because it might eat into the enormous profits these corporations, it’s not worth investigating.

There are a number of potential business models for online newspapers. There is the one that argues for subscription-based access to websites. This is, despite what Rupert Murdoch might think, an absolute non-starter. Recent analysis by Media Week showed that in a survey of 2,000 customers, nine out of 10 of them wouldn’t pay for web news.

Another popular model is one based upon using the brand of the newspaper to sell advertising space, cars, houses, upmarket holidays and lonely hearts services. The problem with this last suggestion is that it ignores the fact that the public reputation of many local or regional newspapers is extremely poor these days. Would you use a dating service advertised in your local rag? This approach may work with large national newspaper websites but it isn’t going to work in a local setting.

These difficulties combined allow this report to discount new media solutions with a frightening degree of casualness. They state:

‘The internet seems to be a difficult issue to address for newspaper groups and we did not receive any conclusive evidence from witnesses that it would be able to provide a financially sustainable and complementary medium to newspapers.’

This is difficult to swallow.

The truth about online business models for news websites is that a combination of subscription, newspaper brand endorsement and a savvy approach to advertising will be the model of the future. Large newspaper groups will inevitably adopt these strategies for local news websites and they will, eventually, make money. The trouble is that it will never make them enough money. The reason it will never make them enough money is that they can never make enough money. They are driven entirely and remorselessly towards ever greater profit. This is the difference between putting your readers first, and putting profit first.

Maybe we should be asking ourselves if we want these monoliths to continue running the local media for profit. Perhaps it would be better to have organisations whose bottom line is not the bottom line; who are doing it because they believe in the importance and values of local news, and not in how much revenue they can squeeze out of the punters.

This is why this report is such a massive failure. Of course, WAG needs to show willing in terms of the newspaper industry, and job losses are a real concern, but it also needs to start looking forward. And, most importantly, it shouldn’t be stepping in with recommendations to save organisations that have already failed by relaxing rules that are there to protect our media from being destroyed wholesale. Local newspaper owners have a public duty and they should not neglect that. If they do, they should not be surprised if they become obsolete.

On the whole people do not become journalists for the money. In fact, you would be mad to. Most do it because of – dare I say it? – higher values. The abandonment of those higher values in favour of profit chasing has done irreversible harm to our old media, and it should not be allowed to happen again in this new era.

The question of whether these bloated, faceless, mass-media corporations, are the ones who should be spearheading the future of local news is, to put it politely, a no-brainer. They shouldn’t be allowed anywhere near it. Key in the online news-environment, as anyone who has ever spent a day knocking about it will tell you, is quality. The degradation of local news, by owners who have neglected and battered their own titles year in and year out with cutbacks and a desperate drive for ever greater profits, demonstrates just how unfit these companies are to take new local journalism forward.

Hopefully in today’s debate someone will talk about the importance of new media and Assembly investment in the future of new media in Wales. Though it is doubtful they will.

It is time, therefore, that a grass-roots movement of journalists with a hyper-local approach had a go at cracking this. It’s also time the Assembly recognised the opportunity and thought about ways of encouraging it.

We should stop looking to those who ruined our local media last time to fix it temporarily, only to go and ruin it again. They have had their chance and they’ve made their money.  It’s now somebody else’s turn.

****

Rob Williams is a digital sub-editor at The Independent Online.

He is the author of The Mabiblogion a blog about Welsh Media and Politics

Article first published at waleshome.org

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