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Review of news industry

BBC, Facebook and Google targeted in Cairncross plan

BBC Scotland

Cairncross calls for the BBC to complement commercial news (pic: Terry Murden)


The BBC should do more to help local publishers and think further about how its news provision can act as a complement to commercial news, according to a review of the industry.

Dame Frances Cairncross, a former economics journalist, also calls for tax relief to support local and investigative journalism and a regulator to tackle the tackle an “uneven balance of power between news publishers and the online platforms – such as Facebook and Google – that distribute their content, and to address the growing risks to the future provision of public-interest news.

She rejected proposals from publishers that Facebook and Google should be made to pay to include news content on their systems, warning that such a move could cause “significant harm to people who want to see news”. However, she suggested that the BBC needed to avoid stepping on the toes of for-profit local news sites.

Ms Cairncross, currently chairman of the Court of Heriot-Watt University and a Trustee at the Natural History Museum, was advised by a panel of experts from the local and national press, digital and physical publishers and advertising. She is married to financial journalist Hamish McRae.

Her report concludes that intervention may be needed to improve people’s ability to assess the quality of online news, and to measure their engagement with public interest news. The key recommendations are:

  • New codes of conduct to rebalance the relationship between publishers and online platforms;
  • The Competition and Markets Authority to investigate the online advertising market to ensure fair competition;
  • Efforts by online platforms [such as Facebook and Google] to improve their users’ news experience should be placed under regulatory supervision;
  • Ofcom should explore the market impact of BBC News, and whether it inappropriately steps into areas better served by commercial news providers;
  • The BBC should do more to help local publishers and think further about how its news provision can act as a complement to commercial news;
  • A new independent Institute should be created to ensure the future provision of public interest news;
  • A new Innovation Fund should be launched, aiming to improve the supply of public interest news;
  • New forms of tax reliefs to encourage payments for online news content and support local and investigative journalism;
  • Expanding financial support for local news by extending the BBC’s Local Democracy Reporting Service;
  • Developing a media literacy strategy alongside Ofcom, industry and stakeholders.

Ms Cairncross said: “Ultimately, the biggest challenge facing the sustainability of high-quality journalism, and the press, may be the same as that which is affecting many areas of life: the digital revolution means that people have more claims on their attention than ever before.

“Moreover, the stories people want to read may not always be the ones that they ought to read in order to ensure that a democracy can hold its public servants properly to account.”

The Government will respond this year after the Culture Secretary Jeremy Wright discusses the findings with the Competition and Markets Authority, Ofcom and the chairman of the Charity Commission.

Some of the report’s key findings include:

  • Half of UK adults worry about “fake news” or disinformation. A quarter do not know how to verify sources of information they find online. So users need to get the right skills to spot fake news, and platforms must identify and quickly remove the deliberate spread of misinformation on their services.
  • Although news can be found on television and radio, written journalism (whether in print or online) originates the largest quantity of original journalism and is most at risk – particularly investigative journalism and democracy reporting.A Mediatique report Overview of recent market dynamics in the UK press, April 2018 commissioned by DCMS as the part of the Cairncross Review found:
    • Print advertising revenues have dropped by more than two-thirds in the ten years to 2017;
    • Print circulation of national papers fell from 11.5 million daily copies in 2008 to 5.8 million in 2018 and for local papers from 63.4 million weekly in 2007 to 31.4 million weekly in 2017;
    • Sales of both national and local printed papers fell by roughly half between 2007 and 2017, and are still declining;
    • The number of full-time frontline journalists in the UK has dropped from an estimated 23,000 in 2007, to just 17,000 today, and the numbers are still declining.

    A report Online Advertising in the UK by Plum Consulting, commissioned by DCMS as the part of the Cairncross Review (and available as an annex to the Review) found:

    • UK internet advertising expenditure increased from £3.5 billion in 2008 to £11.5 billion in 2017, a compound annual growth rate of 14%.
    • Publishers rely on display advertising for their revenue online – which in the last decade has transformed into a complex, automated system known as programmatic advertising.
    • An estimated average of £0.62 of every £1 spent on programmatic advertising goes to the publisher – though this can range from £0.43 to £0.72. *Collectively, Facebook and Google were estimated to have accounted for over half (54%) of all UK online advertising revenues in 2017.
    • The major online platforms collect multiple first-party datasets from large numbers of logged-in users. They generally, they do not share data with third-parties, including publishers.

    Tom Watson MP, Labour’s Shadow Secretary of State for Digital, Culture, Media and Sport, said:  “Dame Cairncross has adopted a number of Labour’s policies, such as tax reliefs for public service journalism, but attacking the BBC is barking up the wrong tree. 

    “While she has recommended an inquiry into BBC news online the real fundamental problem that the government must now deal with is the duopoly in the digital advertising market, with over half of all revenues going to Facebook and Google. As long as tech giants continue to completely dominate the market it’s difficult to see how a sustainable financial footing for journalism can be achieved.”

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