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Magazine of the Chartered Institute of Journalists

Chartered Institute of Journalists’ submission to the Cairncross Review into sustainable journalism

CIoJLogosmallThe Chartered Institute of Journalists (CIoJ) is the world’s oldest professional association of journalists and operates under a Charter granted in 1890 by HM Queen Victoria.

We represent staff and freelance journalists across all sectors of the media including local and national newspapers, periodicals, broadcasting and electronic publishing.

The CIoJ welcomes the opportunity to submit views to the Cairncross Review into Sustainable Journalism, which comes at a time when journalism as we know it has never been under greater threat.

  • The review’s objective is to establish how far and by what means we can secure a sustainable future for high-quality journalism, particularly for news. Looking ahead to 2028, how will we know if we have been successful, in relation to:
  1. publishers

It can only be judged by expansion of print and online services, increase in print circulation and reliably measured online visiting, preferably by subscription, increased competition between news services at all levels, and increase in professional remunerated journalist positions.

  1. consumers

This can only be judged by measured surveying of trust and appreciation of standards of reporting, informative and analytical journalism and in increase in the consumption and financial engagement by payment for local, regional and national newspaper and online journalism. The critical breakthrough will be the effective education and engagement of printed newspaper literacy by younger generations of readers and subscription to online platforms. A free and competitive press needs participation in a commercial market-place and a willingness for consumers to buy and invest at cover price and contact as well as advertisers to buy advertising in the printed form and online.

A short conclusive answer is that the closures will halt and the redundancies will stop in local newspapers, and there will be reverse in decline of circulation in all sectors including regional and national titles.

The Institute believes neither the newspaper industry nor our wider society should give up on the printed medium as the primary platform for sustainable income generation in journalism. Books have not been replaced by Kindle and electronic publishing. We believe the printed word can become trusted and valued again and can help to restore the damaged reputations of professional journalists as well as re-establish the democratic and scrutinising role of independent media. 

  • Do you consider that the future of high-quality journalism in the UK is at risk – at national, regional and/or local levels?

Undoubtedly. We would agree that quality journalism is at risk. This bleak future presents a threat to democratic accountability and the quality of journalistic freedom of expression in the United Kingdom.

  1. What are the main sources of evidence that support your view?

Many local newspapers are staffed by increasingly fewer journalists, driving down the ability to cover news properly.  Not only are they understaffed, but many journalists work some distance from the area they cover.  Budgets have been cut to shoestring levels, with all the resultant consequences.

This situation is now spilling over into the national newspaper arena.  The Independent newspaper’s print operation was shut down recently, and others are struggling to maintain their presence in the market place.

  1. What are the main sources of evidence which support an alternative perspective?

The alternative perspectives are few and far between though significant by example.  Models that have bucked the overall trend e.g. Financial Times, Economist, Spectator and Private Eye, and signs of digital sustenance through membership subscription. The Guardian culture of ‘donation/subscription’ or the pledge to use an American expression is the mainstay of public interest journalism in the USA where public television and public radio (NPR, Pacifica and public radio foundations) depend on listener subscription and donations, often intensified during ‘pledge weeks.’  It is significant that the Guardian’s source of income from this genre of contribution has enabled it to reach the tipping point in 2018 of online income exceeding print publication income. Buzzfeed has engaged a similar strategy.  The persuasion to donate and support in a financial way that is additional to the printed-cover price, advertising and regular subscription is an engagement with the democratic imperative as a voluntary contract of commitment.

This is how the Guardian presents its pledge to online readers:

‘Your support is vital in helping the Guardian do the most important journalism of all: that which takes time and effort. More people than ever now read and support the Guardian’s independent, quality and investigative journalism. Like many media organisations, the Guardian is operating in an incredibly challenging commercial environment, and the advertising that we used to rely on to fund our work continues to fall. Advertising revenues are falling. We haven’t put up a paywall. We want to keep our journalism as open as we can.’

The virtues and values expressed here could be adopted by local and regional newspapers in setting out public service duties to their readers and communities. We believe that high standards of professional journalism serving the interests of local, regional and national communities represent a qualitative contract that news consumers will always appreciate. The method and terms of financial expression could be expressed in different ways. The pledge and donation model appears to be working for the Guardian and is certainly worthwhile investigating and supporting at other levels.

It is significant that Private Eye and the Spectator, both periodicals, can sustain and increase print circulation. In the case of Private Eye, they can achieve this without developing any matching online presence and certainly without giving away free content on the Internet.

It does seem to be the case that successful models of sustaining economic viability with declining print circulation is achieved through paywall structures that vary free and paid for access (e.g. the Telegraph) and online subscription only. (e.g. The Times and Sunday Times).

A successful business model might be the publishing company, Reed Elsevier, now known as Relex, that has built a hugely profitable internet publishing business over the last 20 years by putting their previously paper only scientific journals online and selling subscriptions to universities and libraries. The lesson here is in using new media as another form of legitimate commerce rather than an online promotion or advert for the printed form. The symbiosis between print and online should be commercially mutual rather than destructive.

  • What can the review learn from successful business models in other sectors or other countries, including those which work at scale? We are particularly interested in any organisational or business models which might promote or advance the future of high-quality journalism at the local and regional levels:
    1. Where new and viable business models are emerging for high-quality journalism, what does this tell us about changing consumer behaviour and preferences?

The hollowing out of professional journalistic resources in other Western countries through declining circulation, the transfer of advertising to online and social media consumption, and a continued expectation that news journalism is something that can be received without payment online is a transnational pattern.  There is no sign that any business model has succeeded in reversing this trend in the United States.

In some European countries there has been a longstanding culture of state subsidy in various forms and we appreciate that the Cairncross Review has quite rightly travelled to the EU zone to appreciate how this operates in the context of the drift of younger audiences from print to digital online platforms.

The essential problem facing UK news media groups is that this advertising drift to global US digital platform giants has been catastrophic. It has given business corporations situated abroad massive profits and income that previously underpinned and funded UK journalism at all levels. These global online corporations refuse to accept the responsibility of being publishers, avoid fair taxation and fail to fairly remunerate links and content generated by traditional journalistic media institutions.

We are not confident that new and viable business models are emerging as an answer to the problems identified by the Review. We do believe that new and viable business models could develop if links and content generated online by traditional print media received a proportionately supportive income and share of the global online giants’ advertising bonanza.

This could be achieved by direct levies or licensing of Google, Facebook, and Twitter and their equivalents that was then distributed to professional news publishers in the same way that PPL, PRS, and ALCS distributed royalties to music publishers, composers, performers and authors.

  1. Are different approaches needed for different parts of the market (e.g national and local; general and special interest news)?

One of the difficulties of introducing any form of state subsidy and grant-funding in the form of a national ‘Journalism Council’, equivalent to the national Arts Council, or regional arts boards, is that a vital and perhaps only sustaining funding stream would be subject to political interference, and the success and failure of the application process rather than the intrinsic and provable merits of demand for qualitative journalistic content.

It is very difficult for politicians to agree on what is ‘the public interest’ and the very process of defining a public interest quotient that will measure qualification for subsidy could prove to be problematic in political constitutional terms.

In free market or qualitative commercial and capitalistic terms, the trend in the UK to agglomeration in ownership, and large corporate groups in local media e.g. Reach, Archant, Newsquest, and Johnston Press has been driven by the need to rationalise, share resources, and manage declining circulations through an accommodating protection of large economies of scale.  A continuing retreat in the overall income context means large economies of scale cannot reverse a decline in publication and readership that undermined smaller and independent businesses.

We would argue criticising the trend to agglomeration may obscure the advantages of using tax relief and other central, regional and local government economic incentives to encourage national media groups such as Guardian Media, News UK, Associated Newspapers, The Telegraph Group and even the Financial Times to invest in local newspaper/media titles to widen and diversify their economic base of publication.  These groups have the economies of scale to research and develop local journalistic resources and publications that can feed and cross-pollinate their national and international publishing activities.

  1. To what extent do new and emerging business models such as online-only, hyperlocals and cooperative models work or mitigate issues felt by traditional players?

We are not convinced that these models are effective substitutes and have any future as working business models. We do not challenge or question the worthiness and good intentions of hyperlocal and cooperative players, but the narrative up until now is unfortunately not a solution to the problems being addressed by the Review.

The Institute fully respects how hyper local news sites and independently produced free newspapers can combat the centralisation of large publishing companies by engaging their readership in content they actually want to read and can relate to. The ‘local’ paper in Kensington and Chelsea for instance employed no reporter in the area who could have been able to hear and publish the concerns of Grenfell residents as to the safety of their building. Yet neither was there any effective presence of online-local, hyperlocal and cooperative operating to replace the function of professional local journalistic publication. The idealism and good intentions are not at present matched by real economic and professional sustainability.

  1. What alternative income streams (other than advertising) are most likely to sustain high-quality journalism in the digital age? Are there barriers to their effective exploitation and if so, how could these be addressed?

 We believe we have addressed answers to these questions at 2b, and 3a & b.  We believe solutions can be found in creative and redistributive forms and measures of tax relief, taxation, licensing of copyright and intellectual property, and rewarding individual reader pledges and donations, in a similar way to the advantages offered to recognised charities.

  • What has been the impact of the operation of the digital advertising market on the sustainability of high-quality journalism in the UK?

It has been clear for some time that advertising revenue is being drained out of the traditional media sector and into the hands of global Internet giants.  The loss of this revenue on traditional media has been identified by the research done for this consultation by Mediatique.

Mediatique_-_Overview_of_recent_dynamics_in_the_UK_press_market_-_Report_for_DCMS.pdf

Despite the Internet giants making money from creating Ad links connected to news articles produced by traditional media outlets, they make no contribution to the news sector.

Furthermore, the Internet giants are not worried about mixing genuine and fake news sources, so long as the advertising revenue comes off the back of the link.

Recently, Google has been fined a record $5 billion by The European Commission for using its search engine to promote its own Adsense against fair competition. This is the second breach and a further one is still being considered. Google is appealing the decision but it shows that such profitable organisations are not easily kept accountable to any Government.

Twitter has shut down up to 70 million fake and suspicious accounts since May 2018, according to the Washington Post.

Facebook users post fake news extensively and the social media site has closed down 583 million fake accounts in the first quarter of the year.

Ofcom is also clear that the internet is the most popular platform for news among 16-24s (82%) and ethnic minority groups (EMGs) (73%).

Revenue is the driver for all these internet giants. Since the search engines and social media sites can direct users in any way they want – to genuine articles or fake ones – the impact they have on journalism, and readers access, is huge.

Quality news faces being drowned out by the plethora of fake news feeds. 

  • Many consumers access news through digital search engines, social media platforms and other digital content aggregation platforms. What changes might be made to the operation of the online platforms and/or the relationship between the platforms and news publishers, which would help to sustain high-quality journalism?

Government should explore ways in which to force the big global internet giants to pay towards the cost of producing news.  Internet platforms should contribute more fully to the cost of providing good journalism – by agreeing on a more realistic scale of charge received for content provided.  These charges should take into account the enhanced revenues that social media outlets enjoy by virtue of being able to make use of the news and other editorial content provided by newspapers.

There is a symbiotic nature to this model in the sense that the validity of the search engine, or social media site, would be enhanced with links to quality news feeds.  The news outlets would gain some income to support the costly nature of reporting news.

  • High-quality journalism plays a critical role in our democratic system, in particular through holding power to account, and its independence must be safeguarded. In light of this, what do you consider to be the most effective and efficient policy levers to deliver a sustainable future for high quality journalism?

Our answer here should be seen in conjunction with our answers to questions 3b and 5 above.

Closure of local papers is reducing the sense of community in areas across the UK and the industry is noticing.

When the bomb blast hit people attending a concert at Manchester Arena it was the coverage, by the Manchester Evening News which was held up as “a very good example of where good quality local journalism and a good quality local paper can actually be out there supporting their community.” MEN raised £2.5m for the victims but what was less well known was that thirty local journalists answered the call to cover shifts for the exhausted reporters, photographers, subs and editors.

Wider international research shows that local newspaper closures are partly related to Government needing to spend more. Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance was published on May 8 2018.

CIoJ has been instrumental in raising issues directly relevant to this.

In Scotland we objected to local authority advertising revenue being withdrawn from local print newspapers and put entirely online as complex issues such as planning applications were not accessible to people who were not computer literate or used a telephone for access.

CIoJ’s other major campaign is against local authorities spending revenue on non-accountable Pravda style newspapers which give only selective information and are paid for by Council taxpayers without any legitimate opportunity to question the information.

Recently, an Essex local authority has declared it will not respond to any questions from an independent newspaper. Is that even legal when it is public money the local authority are spending?

CIoJ suggested as early as 2012 that local newspapers are given greater tax breaks. This was pinned down to business rates and there followed a joint consultation, led by the Department of Culture, Media and Sport (DCMS) and the Department of Communities and Local Government (DCLG).

The consultation was launched in order to understand the challenges currently faced by local newspapers occupying properties in their local areas and whether relief on their business rates bills could help support them.

On 16 March 2016 the Chancellor announced at the Budget that the Government will introduce a £1,500 business rates discount for the office space occupied by local newspapers in England, up to a maximum of one discount per local newspaper title and per property, up to state aid limits, for two years from 1 April 2017.

The relief is intended to be specifically for local newspapers and is delivered through local authority discretionary discount powers (under section 47 of the Local Government Finance Act) and so there are deep concerns that this will spark more closures when it concludes next year.

Especially given the dire straits of many local authority finances. There is nothing in place to replace this support, but we would go so far as to say that this should not only be extended in time, but also enhanced to offer greater support.

We believe the Review could advocate a cultural and economic call to arms to reverse what is clearly a democratic deficit in the quality of information being provided and received by UK citizens towards the end of the second decade of the 21st century.

Economic incentives and guaranteeing remunerated income streams can be achieved through creative and imaginative legislative and executive policy without generating conflicts of interest that can arise through direct subsidy.

Statutory obligations to engage with legitimate professional news publications through advertising, sponsorship and distribution of central, regional and national government and private corporate commerce in promotion, and communication all help.

Is it the case that local, regional and national government bodies regularly buy and acquire their respective newspaper media?

To what extent could schools, colleges and universities and all forms of business support the commerce of the newspaper industry by acknowledging a responsibility to subscribe, buy, and make available to their employees, students and customers?

The Institute fears that a tendency to politically problematize and critically invalidate the role of all forms of newspaper journalism has blinded general public opinion to the benefits that it provides in empowering public knowledge and understanding of how public and private bodies exercising power influence and affect the lives of everyone.