Cairncross Review a Sustainable Future for Journalism

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Cairncross Review a Sustainable Future for Journalism THE CAIRNCROSS REVIEW A SUSTAINABLE FUTURE FOR JOURNALISM 12 TH FEBRUARY 2019 Contents Executive Summary 5 Chapter 1 – Why should we care about the future of journalism? 14 Introduction 14 1.1 What kinds of journalism matter most? 16 1.2 The wider landscape of news provision 17 1.3 Investigative journalism 18 1.4 Reporting on democracy 21 Chapter 2 – The changing market for news 24 Introduction 24 2.1 Readers have moved online, and print has declined 25 2.2 Online news distribution has changed the ways people consume news 27 2.3 What could be done? 34 Chapter 3 – News publishers’ response to the shift online and falling revenues 39 Introduction 39 3.1 The pursuit of digital advertising revenue 40 Case Study: A Contemporary Newsroom 43 3.2 Direct payment by consumers 48 3.3 What could be done 53 Chapter 4 – The role of the online platforms in the markets for news and advertising 57 Introduction 57 4.1 The online advertising market 58 4.2 The distribution of news publishers’ content online 65 4.3 What could be done? 72 Cairncross Review | 2 Chapter 5 – A future for public interest news 76 5.1 The digital transition has undermined the provision of public-interest journalism 77 5.2 What are publishers already doing to sustain the provision of public-interest news? 78 5.3 The challenges to public-interest journalism are most acute at the local level 79 5.4 What could be done? 82 Conclusion 88 Chapter 6 – What should be done? 90 Endnotes 103 Appendix A: Terms of Reference 114 Appendix B: Advisory Panel 116 Appendix C: Review Methodology 120 Appendix D: List of organisations met during the Review 121 Appendix E: Review Glossary 123 Appendix F: Summary of the Call for Evidence 128 Introduction 128 Appendix G: Acknowledgements 157 Cairncross Review | 3 Executive Summary Executive Summary “The full importance of an epoch-making idea is But the evidence also showed the difficulties with often not perceived in the generation in which it recommending general measures to support is made... A new discovery is seldom effective for journalism. Not only is it still unclear what shape practical purposes till many minor improvements the industry will eventually take - established and subsidiary discoveries have gathered companies have often found it hard to reinvent themselves around it.” themselves and thus survive profound technological change (think of Kodak or Blockbuster). In addition, Alfred Marshall: many national news publishers are viewed by Principles of Economics, 1890 the public with some mistrust (although mistrust for social media is much greater). Moreover, most national and regional news publishers are It is now 35 years since the dawn of the internet, generating good profits, with margins of 10% or and more than ten years since Steve Jobs more. But for several publishers, a large proportion brandished the first iPhone and predicted that it of those profits is being used to pay down debts or “changes everything”. But only in the past decade pension liabilities (as in the cases of Johnston Press have these epoch-making ideas begun to have and Reach/Trinity Mirror respectively).1 As a result, a serious impact on the main sources of high- they have reduced staffing, closed local offices, quality news: television, radio and above all, the and have less money available for investment in newspaper. The ways in which news is provided the substantial innovation that a successful digital and the ways people find and read it are changing future requires. more rapidly and radically than ever before. This digital revolution is bringing enormous potential The goal of the Review has not been to protect benefits to consumers, but is also challenging the news publishing companies themselves, but to future of news provision. advocate measures that will ensure the market in which they operate is efficient, and to defend their This Review was asked to consider the most democratically significant outputs. As such, sustainability of the production and distribution of the Review focused on the following two areas: high-quality journalism, and especially the future of the press, in this dramatically changing market. It First, is the market in which publishers now operate has looked at the overall state of the news media a fair one, or has the rapid growth of the big online market, the threats to the financial sustainability of platforms2 - especially Google and Facebook publishers, the impact of search engines and social - created distortions that justify government media platforms, and the role of digital advertising. intervention? The platforms now not only take a large share of the market for advertising, they The Review received a large body of evidence, and also provide the routes that many people use interviewed a wide range of people: journalists, to find news online. The Review offers some academics, entrepreneurs, and representatives of recommendations intended to create a better every corner of the industry. From the evidence, balance between publishers and platforms, and to the scale of the threat to the press was abundantly persuade the online platforms to use their position clear. The news publishing business is undergoing in more accountable ways. an extraordinary period of contraction in both of its main traditional sources of revenue: advertising and circulation. Cairncross Review | 5 Second, how should society continue to support The scale of change the monitoring of, and reporting on, the activities The most striking aspects of the change that is of public bodies not just in central government, but occurring are its speed and its extent. A majority also in localities: local councils, courts, inquests? of people - in the case of young people, a huge This area of reporting, which this Review calls majority - now reads the news entirely or mostly “public-interest news”, has always been one of online. In 2018, the Reuters Institute for the Study the most important functions of journalism, and of Journalism reported that 74% of UK adults used brings undeniable public benefit. At a national level, some online method each week to find news, it attracts considerable reader interest. However, and 91% of 18-24 year olds.3 Most online news at a local level, the story is different. Now that it is available for free and much of it is carried by is possible to see online how many people read aggregators such as Google News or Apple News, reports of local councils, for instance, it is all too posted on Facebook’s news feed, or sent from one evident that the numbers rarely justify the cost of person to another at the tap of a finger. This vastly sending a reporter. So here are activities which expanded availability of news, and the speed with are important public goods, essential to the which it can be found, is clearly something that preservation of an accountable democracy, with people value. poor market incentives for supply (and limited demand), but which it would be inappropriate for At the same time, sales of both national and the state to finance directly. local printed papers have plunged: they fell by roughly half between 2007 and 2017,4 and are still In considering recommendations, the Review dropping. In addition, print advertising revenues, has primarily looked for ways to help publishers which used to carry much of the cost of producing become self-sufficient: for ways to foster news, have fallen even faster, declining in a decade innovations in technology and in business models, by 69%.5 Small wonder so many news groups and to ensure sustainable private provision of are struggling, including digital-only groups like public-interest news. In the shorter term though, HuffPost and Buzzfeed, as well as many local more direct support from government may be newspaper publishers. To cut costs, there have necessary to ensure a minimal level of provision. been mergers, as well as heavy cuts in staffing: the Undoubtedly new institutions will also be required. number of full-time frontline journalists in the UK In conducting this Review, I have had the industry has dropped from an estimated 23,000 in support of a panel of advisers with experience of 2007, to 17,000 today, and the numbers are still different aspects of the news business, including swiftly declining.6 national and local papers, digital-only news, and Moreover, the switch to online has changed the advertising. I have also had considerable support way people find news and the way they absorb it. from DCMS and from Enders Analysis. I have met a They are much less likely to see the mixed bundle wide variety of people involved in the production of of politics, finance, entertainment and sport that news, in various parts of the advertising industry, at constitutes many papers, and more likely to see Google, Facebook, Apple and Twitter, and the other an individual story, chosen by a computer program main online outlets for news. I have conducted and not necessarily clearly labelled with the interviews across the UK, US and Brussels. I have name of a particular publisher. This “unbundled” also read the wide variety of replies to the Call experience has implications for the visibility of for Evidence. However, the views expressed are public-interest news and for trust ultimately my own. in news. Cairncross Review | 6 Yet the transformation has happened because Chapter 2 reports on the dramatic changes in the it offers people something they like: free and market for news: the fall in print circulation of both portable access to a vast array of news sources national and local papers, and the changes in the and stories, constantly updated and easily shared ways people now navigate to news online and the with others.
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