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22 September 2016

NMA: Digital News Value Chain ‘Wildly Out of Step’ With Publishers’ Investment in News

The News Media Association has called on the Government to ensure that online platforms operate within a framework that is “fair, non-abusive and respectful of media plurality” to protect the ability of news media publishers to invest in highly sought after news and information.

In a briefing to Ministers on news publishing in the digital environment published today, the NMA said: “The value chain of digital news has become wildly out of step with the contribution that each player makes and that this is not sustainable.” 

Detailing the issues facing the news media industry such as adblocking and news media publishers’ relationship with Google and Facebook, the NMA highlighted the news media’s role as a creator of highly sought after news content which “can be counted on to provide the subject matter of the country’s democratic conversation.”

“The online news environment is characterised by aggregation of news stories by third party players who repackage, serve, link to and monetise that content. In particular, Google dominates these activities in search and Facebook dominates in social. There are potential benefits for news publishers in working with them, not least in terms of reaching new audiences. However, the situation is far from win-win and significant value is being captured by companies who do not invest in original journalism at the expense of those who do.

“The costs of producing quality journalism are substantial and remain with news publishers. It is becoming increasingly difficult to meet these costs, partly because of the lower value of digital advertising compared to print, but also because of the diversion of advertising spend from publishers towards aggregators.

“Attempts to achieve sustainability in this difficult environment are also being undermined by the restrictive practices imposed by the most powerful online platforms and by the rise of adblocking outfits, who in their own way are part of the scramble to generate ad revenues from content to which they have made no contribution.

“If the viability of independent news production comes under pressure, it will not just be a headache for news publishers. The impact on media plurality and the functioning of democracy will be profound. Independent news publishing accounts for two-thirds of the total spend on news provision in the UK. Every day, the UK’s newspapers – digital and print- can be counted on to provide the subject matter of the country’s democratic conversation. However they can only survive if the relationship between rewards for producing journalism is commensurate with costs.”

As the UK prepares to leave the European Union, the NMA is calling on the UK Government and regulators to “ensure that online platforms operate within a framework that is fair, non-abusive and respectful of media plurality.”

The full detailed briefing has been sent to Baroness Neville-Rolfe, Minister for Energy and Intellectual Property, who requested a summary of issues facing the industry following a meeting with the NMA and member publishers earlier this year, and to Matthew Hancock, Minister for Digital Policy and Culture.