The Cairncross Review into the sustainability of the UK news industry in the digital age has issued nine recommendations that “have the potential to improve the outlook for high-quality journalism”.
Among the recommendations set out by Dame Frances Cairncross in her 157-page report, published today, are the creation of a new Institute for Public Interest News, an innovation fund and tax reliefs.
She said evidence submitted to the review between June and September last year showed the “scale of the threat to the press was abundantly clear”, with advertising and circulation revenues in decline across the industry.
The report comes almost two years since Press Gazette launched its Duopoly campaign, calling on Facebook and Google – the Duopoly – to stop destroying journalism and pay more back to news publishers on whose content they rely.
Both tech giants have made efforts to change and support news journalism in the UK. Google has pledged $300m (£214m) to the industry, on top of its €150m digital innovation fund supporting new journalism ideas. Facebook has donated £4.5m to fund 80 new community journalists in the UK.
All of these efforts are, however, a drop in the ocean compared to the billions made by both companies, who together dominate the online advertising market, worth £11.5bn in the UK alone in 2017.
In tackling the challenging market facing publishers, the Cairncross Review makes the following recommendations:
1) Online platforms should set out codes of conduct for commercial agreements with news publishers, which should be approved and overseen by a regulator “with powers to insist on compliance”.
2) The UK competition watchdog, the Competition and Markets Authority, should carry out a market study into the online advertising industry, taking a closer look at the different players, their “roles, costs and profitability” and identify whether the market is working and what remedies are needed, if any.
3) A regulator should supervise online platforms’ efforts to improve users’ news experience, including expanding efforts to identify reliable and trustworthy sources. “This task is too important to leave entirely to the judgment of commercial entities,” the report said.
4) The Government should develop a media literacy strategy, working with Ofcom, online platforms and news publishers and broadcasters, voluntary groups and academics to “identify gaps in provision” and opportunities to collaborate further.
5) A new Institute for Public Interest News should be created as a dedicated body, free from political or commercial obligations, that can “amplify efforts” to ensure the future sustainability of public-interest news.
6) The Government should launch an innovation fund to develop new approaches and tools to improve the supply of public-interest news which would ultimately be run by the Institute for Public Interest News once it is established.
7) The Government should introduce new forms of tax relief, including extending zero-rated VAT to digital newspapers and magazines as well as digital-only publications, and develop a new form of tax relief, under the Charities Act or along the lines of Creative Sector reliefs, to support public interest journalism.
8) The local democracy reporting service, managed by the BBC in partnership with the News Media Association, should be expanded (it currently employs some 140 journalists). Eventually the management of this should be passed to Institute for Public Interest News.
9) Ofcom should assess whether BBC News Online is “striking the right balance” between getting a wide reach for itself and driving traffic to commercial publishers, particularly local ones. The BBC “should do more to share its technical and digital expertise” to help local publishers.
Dame Frances said the most striking aspect of the “dramatically changing market” for news in the UK was the speed and extent to which it is taking place, with a majority of people reading the news entirely or mostly online.
She described online news, in which people see an individual story “chosen by a computer programme” and often without clear labelling on who published it, as the “unbundled experience”.
This is in contrast to the “mixed bundle of politics, finance, entertainment and sport that constitutes many papers”.
She said there was evidence of a “market failure” in the supply of public-interest news, for which the only remedy may be public intervention.
And she acknowledged the dominance of Google and Facebook in the online advertising market, saying the Duopoly’s “superiority” made it hard for publishers to compete.
On the creation of the Institute for Public Interest News, Dame Frances said the new body would work in partnership with news publishers and online platforms, Ofcom, the BBC and academic institutions.
“Its governance should ensure complete freedom from any political or commercial obligations, and its strategic objective would be to ensure the future provision of public-interest news,” she said.
“It would become a centre of excellence and good practice, carrying out or commissioning research, building partnerships with universities, and developing the intellectual basis for measures to improve the accessibility and readership of quality news online.”
She added that if new business models for journalism should “fail adequately to support public-interest news” the institute could become like the Arts Council, “channelling a combination of public and private finance into those parts of the industry it deemed most worthy of support.”
‘We are likely to see further decline’
Dame Francis said she had conducted interviews across the UK, US and Brussels in carrying out her review, which included a panel of advisers from the local, national and digital-only press.
She was instructed to look into the sustainability of the press by the Prime Minister last year.
In her conclusion, she said her recommendations were “designed to encourage new, sustainable journalism models to emerge, with the help of innovations in technology, business systems and journalistic techniques”.
But, Dame Frances warned: “The fact remains that we are likely to see a further decline in the size of the UK’s news publishing sector – in journalists and in titles.
“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.”
She said the “most energy” should be given to measures which “incentivise the provision and consumption of public-interest news”, which will require new sources of funding, out of direct government control, as well as “institutional and financial structures that combine a guarantee of independence with adequate support”.
“That will be a difficult combination to secure, but the future of a healthy democracy depends upon it,” she said.
‘A healthy democracy needs high-quality journalism’
The report has already been welcomed by news trade bodies, the News Media Association, the Society of Editors and regional publisher Newsquest.
The Government will now consider all of the recommendations made in the report in more detail. Culture Secretary Jeremy Wright has said he will write to the CMA, Ofcom and the Chair of the Charity Commission to open discussions about how best to take forward the recommendations which fall within their remits.
The Government will respond fully to the report later this year.
Wright said: “A healthy democracy needs high-quality journalism to thrive and this report sets out the challenges to putting our news media on a stronger and more sustainable footing, in the face of changing technology and rising disinformation.
“There are some things we can take action on immediately while others will need further careful consideration with stakeholders on the best way forward.”