Digital News Environment

Why is it important? 

UK newspapers – in digital and print - are by far the largest investors in journalism and every day they can be counted on to provide the subject matter of the country’s democratic conversation. However, in the digital age, funding quality journalism is an uphill struggle. This is partly because of the lower value of digital advertising compared to print, but also because of the diversion of advertising spend from publishers towards online platforms and Google and Facebook in particular

Current Threats

The digital news environment vastly rewards the distribution of content over its creation. The global tech giants’ dominance of the digital eco-system means that Google and Facebook are due to extract over 63 per cent of UK digital advertising expenditure in 2019 – even greater than their 59 per cent share of the US digital ad market.  Those two companies alone are forecast to take over £9 billion this year in UK digital advertising, while the news media companies producing the content from which the duopoly benefits earn just £500 million a year in digital ad revenues.*

These platforms distribute and monetise news content that publishers have produced and invested in. As ad revenues drain away from content providers towards online platforms, it becomes harder for publishers to meet the substantial costs that professional news production entails.

Search engines and social media, primarily Google and Facebook, distribute and monetise news content that publishers have produced and invested in.

The dominance of Google in the search advertising market and Facebook in social media gives these companies immense power over which stories are read by whom.

The dominance of Google in the search advertising market and Facebook in social media gives these companies immense power over which stories are read by whom. Sudden changes in algorithms can result in drastic declines in traffic to publishers’ sites that inflict further damage on the finances of independent news production. The algorithms of online platforms have also been observed to propel the viral spread of ‘fake news’ based on pirated and/or fabricated content, compounding the squeeze on real, professionally produced news online.

The danger is that these trends will hollow out the media landscape: Quality, professionally produced news becomes unsustainable and all that remains are fake news pedlars that can be run on a shoe-string and government-backed outlets, such as Russia Today, for whom money is no object.

What is NMA doing about it?

The News Media Association has presented these concerns to Ministers, parliamentarians and regulators.  Following this work, the NMA welcomed the launch of the Competition and Markets Authority’s market study into the online platforms such as Google and Facebook and has outlined a series of measures and potential areas for the study to look at.

In particular, the NMA has called for a new Digital Markets Unit to be established by statute and given effective monitoring and enforcement powers to oversee the new remedies, including drawing up and overseeing a binding code of conduct for online platforms of “strategic market status.”

Other recommendations include requiring the tech companies - the “unavoidable business partners” for news media - to give reasonable notice of any changes to terms of business or algorithms which impact on news publishers and clearly explaining the reasons for doing so.

The NMA is also campaigning hard for robust exemptions from any new regulatory framework for the tech giants, designed to crackdown on online harms, and from Information Commissioner’s Office proposals to introduce an age appropriate design code and standards for websites.  The NMA fears the ICO proposals could “wreak havoc” upon news media.

The NMA also commissioned research by Deloitte that highlighted the £5.3bn contribution of newspapers to the UK economy and their peerless role as investors in original news.

*Sources AA/WARC and eMarketer.