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. Their role providing trusted and accurate information to the public has become even more important during the coronavirus pandemic.  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 extract an ever-increasing proportion of the ad spend available, while other sectors lose share. As a category, internet pure play - mainly Google and Facebook - is forecast by AA/Warc to account for more than two thirds of the adspend in the UK in 2020 and, in Q3 2020, the tech giants increased share by 6.2 per cent while every other sector lost share.

Internet pure play is forecast to take over £14 billion this year in UK digital advertising, while the news media companies producing the content from which the duopoly benefits will take less than £490 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.

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.

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, combined with the unprecedented pressures of the coronavirus pandemic, 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 the NMA doing about it?

The News Media Association has presented these concerns to Ministers, Parliamentarians and regulators and for many years led the way in calling for the Competition and Markets Authority to undertake a market study into the digital advertising marketplace. 

Published in July 2020, and repeatedly citing NMA evidence, the report laid bare the “exploitation” of commercial relationships with news media publishers by Google and Facebook, which the CMA said was likely to lead to consumer harm as publishers were less likely to be able to monetise their content.

The NMA welcomed the Government’s response to the study and the announcement that it will set up a Digital Markets Unit, which the NMA had campaigned for. 

The DMU will begin work in April and sit within the CMA to oversee a “pro-competition regime” for platforms including those funded by digital advertising, such as Google and Facebook. 

As part of the work, a new code will be introduced to govern commercial arrangements between publishers and platforms to help keep publishers in business - helping enhance the sustainability of high-quality online journalism and news publishing in the UK. 

The NMA has also been working with publishers overseas and closely monitoring developments in other key marketplaces. In Australia, the Government has introduced the News Media Bargaining Code to govern relationships between the tech platforms and the publishers, which could inform the development of the code in the UK.   

The welcome acknowledgement of the principle of paying publishers for the news content they produce has led to publishers striking deals with the tech platforms.

But the deals in no way diminish the urgent need for a robust regime, underpinned by legislation, to level the playing field between the platforms and the publishers, and the NMA continues to campaign for the legislation to be brought forward as soon as possible. It is vital that the new regime delivers significant benefit to both small and large publishers alike and the new regime will help deliver this. 

The NMA is also campaigning hard for robust and complete exemption for news media from the new regime designed to crack down on online harms promulgated by the tech platforms.

As well as news publishers’ websites, which the Government has already confirmed will be out of scope, this exemption must include trusted journalistic content which appears on social media platforms, and user comments made on news media sites.