Written evidence submitted by the Professional Publishers Association (PPA) (PEG0057)

About Us

The Professional Publishers Association (PPA) is the membership network for UK consumer magazine media and business information publishers, representing around 200 of the UK’s most renowned publishing houses. With more than 40 million adults in the UK reading magazine media every month, the sector is worth £4 billion to the UK economy, employing more than 100,000 people.

The PPA's membership incorporates the UK’s largest publishing houses, including Bauer Media Group, Centaur, Condé Nast, Dennis Publishing, The Economist, Haymarket Media Group, Hearst UK, Immediate Media, TI Media, and William Reed Business Media as well as many smaller independent publishers. A full list of members can be found here: www.ppa.co.uk/Resources/Members

Executive Summary

PPA welcomes the opportunity to submit evidence to the Select Committee on Business, Energy and Industrial Strategy, following its decision to investigate whether the post-pandemic world presents an opportunity for a resetting of the UK economy. This is a crucial piece of work, given the importance of drawing lessons from the pandemic so that the UK is more resilient and better placed to deal with future pandemics and shocks.

While the full impact of the COVID-19 crisis on the UK economy remains unknown, it is clear that the economic fallout will be like no other recession that has come before. Magazine and business media publishers, in particular, need to not only navigate their way through the pandemic, but also the long- term economic repercussions of how the current crisis will impact the media landscape.

Publishers have continued to operate since the lockdown began in March, however both newsstand and advertising revenues have collapsed. At the same time, we have seen the demand for quality news and information grow – particularly in digital environments – with people hungry for the trusted sources of information and entertainment our members publish.

Despite growing audience reach, publishers struggle to monetise digital content and continue to face a variety of pressures, including the escalation of fake news, the erosion of reporting rights and the financial impact of monopolistic competition from global digital giants. Furthermore, the necessary measures to slow the spread of COVID-19 over the last four months have further exacerbated these challenges to publishers’ revenue streams, contributing to the cancellation or postponement of events and exhibitions, delays to product launches and the suspension of titles.

The recovery strategy plays an important role in what the future UK economy looks like. For publishers, the pandemic has significantly altered the economic viability of the industry, and changes need to be made to ensure publishers can bounce back from this, in both print and digital environments. It is therefore vital that the industry emerges on the other side as strong, sustainable businesses.

PPA members play a valuable role within society and the economy, not least in these times to keep the public informed, educated and importantly entertained; as well as providing essential business information in the B2B sector to keep the economic wheels greased and turning. It is therefore vital media plurality in this country that the industry survives.

The current circumstances present a direct threat to journalistic endeavour and output in the UK. A healthy, free press – where high-quality journalism holds powerful people and institutions to account – relies on publishers operating in a commercially viable environment. While much attention has rightly been given to the impact of COVID-19 on regional and local press, high quality journalism is not the exclusive preserves of news brands, and magazine journalism is critical to the functions of civic society.

There is significant overlap between magazine and newspaper journalism, not least among the many journalists who have graduated with a shared set of ethics and core skills gained from journalism courses at leading universities across the UK. There remains, however, key differences in the dynamic of the two sectors that impacts on how their journalism is perceived.

Newspapers are bound together in relatively small number by a daily print schedule and a shared focus on national and international news. By following, and at times setting, the country’s agenda, the journalism within these publications is often higher in profile by its very nature. With some notable exceptions, such as Time magazine’s iconic covers, this is not always the case in magazines, which are larger in number and typically more focused around a particular audience or community, or dedicated to a given subject, passion or profession.

While they may be more targeted in their readership, however, magazines adhere to the same journalistic principles as the news media, with the majority of major magazine publishers committed to follow the Editor’s Code of Practice set out by the Independent Press Standards Organisation (IPSO). As such, the impact of magazine journalism is no less significant, with Appendix One setting out a handful or examples providing an indication of how journalistic principles are being put to powerful use by the editors, reporters and writers of the magazine world.

We have responded to the Committee’s specific questions below, and would be happy to provide further evidence on request.

Consultation Questions

Question One: what core/guiding principles should the Government adopt/prioritise in its recovery package, and why?

The necessary measures to limit the spread of the COVID-19 virus continue to have a severe impact across many sectors of the economy. This is acutely felt in the publishing industry and we therefore urge the Government to prioritise support for consumer magazine and business media publishers, who have a vital role in society and, in the case of business intelligence and media, in greasing the wheels of economic growth.

Many retail outlets that would normally sell magazines were closed (mainly independent and travel outlets) for three months and changing consumer shopping habits as a result of social distancing has reduced browsing time in store. The net impact has seen a near 35% decline in newsstand sales since the start of this crisis, an impact that is likely to be long-lasting as we adapt to the ‘new normal’. It equates to around £6m a week in lost revenue. There is little prospect of this improving, even now most restrictions have been lifted. Additionally, the impact of COVID-19 has taken more than £8m a week out of the industry in lost advertising revenue and we anticipate potentially £250m in advertising revenue loss this year, even with some recovery in Q3/4.

The position is unsustainable, with many magazine brands and jobs under threat.

We recognise that the Government has introduced several welcome measures to support businesses financially, however many of these are not open or accessible to publishers. We were unable to furlough staff as they are needed to do their job to inform, educate and entertain readers throughout this crisis. Yet record demand for our content is not matched by revenues to support its creation.

Without support, investment in this part of the economy will be encumbered and the recovery halted.

Question Two: How can the Government borrow and/or invest to help the UK deliver on these principles?

The combined consumer and business magazine media sector in the UK consists of over 250 premium publishers and many more brands, which all have a highly trusted and deep relationship with the communities they serve.

These brands fulfil a unique role as unbiased, objective commentators and advisors for areas of interest that really matter to their readers and users. For consumers of TV news, The Radio Times super serves their needs both in print and digital; Campaign magazine is the bible for those working in the advertising industry; The Grocer has the same high relevance and trust amongst those working in the FMCG and supermarket sector.

Across the whole sector it is the nature of this relationship and the quality of attention paid to the content that enables complex messages to be consumed, understood and acted upon.

The unique coverage both in scale and depth of messaging that magazine brands offer would support the Covid-19 messaging with significant impact away from political opinion or bias in positive, trusted environments.

Government should direct its advertising budget accordingly to both support the sector and boost confidence as consumers and businesses seek to return to ‘normality’ in COVID-secure ways.

Question Three: What measures and support will businesses need to rebuild consumer confidence and stimulate growth that is sustainable, both economically and environmentally?

We recommend the extension of the business rates holiday afforded to hospitality, leisure and retail (many of whom have been able to reopen) to include publishers, as is happening in part in Scotland. This will help ease the financial impact of the coronavirus pandemic and allow us to continue investment in frontline news gathering and reporting.

Furthermore, greater support for event businesses would be beneficial for the economy. Many publishers have diversified their revenues over years off the back of – and to support – trusted brands with live events and exhibitions. A recent PPA survey suggests up to 90% of this revenue will be lost in 2020.

For the events and exhibitions part of this industry to recover and rebuild from this crisis, publishers need to make decisions now about activity in Q1 and Q2 2021. For many, the scale of uncertainty is a roadblock to recovery, as any investment now to deliver 2021 activity is threatened if the COVID alert level were to increase, forcing the closure or cancellation of events. There is no insurance product available in the open market to insure against such a risk and thus publishers are faced with either carrying high levels of risk to make investment now, or putting off investment and delaying economic recovery.

While events and exhibitions are a significant revenue stream for publishers, across the UK economy the events industry is worth more than £40bn, with exhibitions and trade fairs contributing £11bn and conferences a further £20bn in 2018. There is further benefit to the UK from hosting such events, with an estimated £8bn of spend in hotels, hospitality and across the economy from those accompanying event attendees.

We would welcome government measures to provide assurance that planned events and exhibitions down the pipeline in 2020 and 2021, which may have to be halted due to a change in the COVID threat level, can be underwritten in some way in order to protect publishers against this large scale risk. We envisage some form of government backed insurance that would pay out against losses in the event of movement restrictions due to COVID-19.

Finally, the Government should introduce an advertising tax credit for advertising and marketing services as a tool to accelerate recovery and stimulate the economy. Work is being undertaken by the Advertising Association to demonstrate the true value and impact of such a measure, but existing research shows that for every £1 spent on advertising, it has a £6 benefit to UK GDP. This stimulus would encourage businesses to spend more promoting their products and services to customers through multiplatform campaigns using magazine media. This would also increase advertising revenue for publishers who have experienced significant losses since March.

Question Four: Whether the Government should give a higher priority to environmental goals in future support?

Yes, we work to support members to continuously improve their sustainability and reduce carbon footprints. The Government should promote initiatives and business support packages that enhance the sustainability capabilities of all sectors of the economy.

Question Five: Whether the Government should prioritise certain sectors within its recovery package, and if so, what criteria should it use when making such decisions? What conditions, if any, should it attach to future support?

The economic recovery will be uneven. We already know that this pandemic has accelerated change and reshape the economy, with many suggesting a decade of change has occurred within the space of a few weeks. It is the sad reality that we must accept some business models will no longer be viable in a changed world. However, we encourage the Government to prioritise schemes that help publishers, acknowledging the critical role they have played during the pandemic to ensure readers are informed, educated, and entertained throughout this crisis. Publishers business models can and will adapt, for example the change in VAT rate announced in the March Budget will help publishers invest and adapt digital their digital offering, and to better monetise digital products. However, without support many are at risk of failure before being able to adapt and embrace this change.

Question Six: How can the Government best retain key skills and reskill and upskill the UK workforce to support the recovery and sustainable growth?

We propose the Government takes this opportunity to review the current apprenticeship levy scheme to enable businesses to re-skill furloughed workers and upskill those just entering the marketplace using the vouchers assigned under the Apprenticeship Levy. The current apprenticeship funding system is rigid and inflexible, has failed to deliver the desired policy outcome of an apprenticeship revolution. New measures announced in the Summer Economic Update will support this, but for many businesses it is simple not possible to take on an apprentice or design an apprenticeship around specific skill requirements. By taking a more flexible approach in the short term to levy funds, businesses can reskill employees and protect jobs, without new funding from Treasury. A more flexible approach, allowing fund to be directed toward training to progress employees, supporting new entrants and developing the supply chain would be more beneficial.

Question Nine: What opportunities does this provide to reset the economy to drive forward progress on broader Government priorities, including (but not limited to) Net Zero, the UK outside of the EU and the ‘levelling up’ agenda? What should the Government do to ensure that delivering on these priorities does not exacerbate the vulnerability of businesses, consumers and communities/workers that have been impacted by COVID-19?

Government should embark on talks with industries to ensure they are part of the conversation when setting new targets and workstreams. New initiatives should be developed in a way that gives businesses adequate time to make necessary reforms, and work in tandem with industry to achieve these objectives.

Question Ten: What lessons should the Government learn from the pandemic about actions required to improve the UK’s resilience to future external shocks (including – but not limited to – health, financial, domestic and global supply chains and climate crises)?

Greater attention needs to be paid to our diverse press industry and enhancing the sustainability of high-quality journalism. This crisis has accelerated some structural changes in the market, especially in digital subscriptions and revenue opportunities through the zero-rating of VAT on digital publications, the industry is facing significant economic challenges.

To help publishers develop greater resilience and innovate against future economic shocks, government should commit time and resources to developing a strategy to improve the relationship between publishers and online platforms. Publishers continue to raise concerns about the lack of competition in the digital advertising supply chain and how the duopolistic market positions of Google and Facebook provide little transparency for publishers to ascertain fair value in the supply chain.

Magazine publishers need urgent support to rebalance their relationship with monopolistic tech platforms and fair renumeration to combat growing economic challenges.

We hope the Government will act swiftly to implement the recommendations made within the recent CMA report on Online Platforms and Digital Advertising, which proposed a new pro-competition regulatory regime and the establishment of a new regulator with powers to act promptly to address both the sources of market power and its effects, and with a dedicated regulator that can monitor and adjust its interventions in the light of evidence and changing market conditions.

Action is needed now to safeguard conditions for the sustainability of high-quality journalism; the bedrock of democracy and free press.

Question Eleven: What opportunities exist for the UK economy post Brexit and the pandemic for export growth?

One key area for our sector is international trade, with a strong export market for UK published content overseas, not least supported by English language. For trade policy to support the continued strength of publishing exports, it is important that the Industrial Strategy for the Creative Industries is accommodated and progressed by Government within trade talks.

Despite, the distribution and manufacturing of magazines globally, much of the innovative branding, design and editorial IP-related content predominantly originates in the UK. Hence, UK Government needs to ensuring that "the gold standard" provisions for protection of intellectual property (whether for copyright, trademarks, designs or patents) are not eroded as a result of "qualifications" or provisions for liberal interpretation under the Intellectual Property Chapters of future trade agreements

Failure to ensure this will have adverse repercussions not only for publishers, but other creative industries who are likewise dependent on IP.

Question Twelve: What role might Government play as a shareholder or investor in businesses post- pandemic and how this should be governed, actioned and held to account?

The Government should not have a role in direct, or indirect, ownership of media businesses.

Conclusion

Consumer magazine and business media in the UK is facing an existential crisis, with COVID-19 and other economic challenges to the industry having long-lasting effects on the ability of publishing businesses to remain economically viable. More needs to be done to enhance the long-term sustainability of the UK press industry, building on the Cairncross Review. Failure to do so will lead to more brand closures and further reductions to the industry’s ability to perform its vital role for the economy and society.

Thank you for the opportunity to reply to this call for evidence. We are happy to answer any follow up consultation or supply further evidence or case studies as required.

July 2020 Appendix One

BMJ and clinical trial data In 2009, The British Medical Journal (BMJ) 2009 campaigned on behalf of its readers and the scientific community for access to the full clinical study reports on Tamiflu and Relenza, two globally stockpiled anti-influenza drugs. What followed was a four-year battle in the name of independent scrutiny of the data and avoiding the risk of hidden clinical trial data undermining doctors’ abilities to prescribe with confidence. The Open Data campaign was ultimately successful, helping bring in changes to data transparency policies in Europe and abroad. A further result of the campaign was that, as of January 2013, The BMJ decided it would no longer publish any trial of drugs or devices where the authors do not commit to making the relevant anonymised patient-level data available upon reasonable request. ELLE UK and The Warriors The Warriors is a year-long reporting project by ELLE UK and the Fuller Project for International Reporting that covered the lives of women from Moscow to Mogadishu and a range of issues, from domestic violence to ISIS slavery. The body of work examines acts of feminism and bravery from women around the world who are fighting to change laws and attitudes that have led to oppression and abuse. One such story saw journalists Corinne Redfern and Allison Joyce follow the lives of sex workers in Bangladesh over the course of seven months as part of an exclusive investigation into people trafficking across the country. Amnesty International recognised their work by naming them winners of the Features category at their prestigious Media Awards in 2019. Inside Housing and Grenfell In 2017, Inside Housing published an article highlighting the threat that flammable external cladding presented to tower block residents – it was a piece of investigative journalism work undertaken by Pete Apps following a blaze in Shepherd’s Bush twelve months earlier. Just weeks after Apps’ piece was published, a fire tore through Grenfell Tower, claiming 72 lives and prompting the title to go on and conduct a forensic examination of the situation surrounding the disaster. In addition, two years after calls were made for remedial action to be taken on buildings with similar dangerous cladding, and with safety work completed on just 89 of 434 high-rise buildings and ten of the 178 residential buildings identified as being at risk, Inside Housing magazine raised the profile of this injustice with the launch of the End Our Cladding Scandal campaign. It calls on ministers to take action and act in the interests of anxious tower block residents, the majority (65%) of whom say their mental health has been "hugely affected" by the ongoing crisis. Which? and nuisance calls As part of the Consumers’ Association, Which? magazine has used its editorial voice to fight its readers’ corner since 1957. Its many campaigning efforts and victories include banning lead-free paint in children’s toys and pushing for seat belts in cars. In 2013, the editorial team at Which? took aim at nuisance calls, which were a large source of distress and unnecessary expense for many consumers, particularly the elderly and vulnerable. The campaign ultimately generated support from half a million people and in 2019 led to the government rolling out a law where fines of up to £500,000 could be inflicted on anyone found responsible for making nuisance calls. Grazia and women’s rights Grace Millane was a British backpacker strangled to death on the eve of her 22nd birthday. Her killer attempted to persuade a jury that her death was the result of a sex game gone wrong – the so-called ‘rough sex’ defence, which had been identified by Harriet Harman MP, Mark Garnier MP and campaign group We Can’t Consent To This as being increasingly used in UK courts. Grazia added its voice to their calls for a law change in December 2019, helping attract over 67,000 petition signatories, encouraging readers to lobby their MPs, and eliciting a promise from Boris Johnson that he would tackle the problem. In June 2020, the Government published a new clause to the Domestic Abuse Bill which, if passed, means attackers and murderers can no longer claim their victim consented to violence during sex that then resulted in harm. It is an important victory that follows earlier campaigning triumphs for Grazia, which include Mind The Pay Gap. Inspired by the hit musical Made in Dagenham, this campaign eventually resulted in then-Prime Minister David Cameron introducing Section 78 of the Equality Act, which required large companies in the UK to publish their staff salaries, highlighting any gender pay gap and securing a significant step forward in the fight for equal pay. C+D and medicine shortages Published since 1859, Chemist+Druggist covers the latest developments in the UK’s community pharmacy sector. In September 2019, the editorial team revealed the extent of medicine shortages being experience on the ground, highlighting that pharmacy teams had suffered shortages in all 36 categories of medicines over the previous six months, with the problem most severe for hormone replacement therapy products. The Department for Health and Social Care responded with a commitment to resolve the persistent issue of drug shortages through better reporting and increased resource. The Economist and the right to die Established in 1843 with a mission to repeal the protectionist Corn Laws, The Economist has remained committed to its campaigning origins. In 2015, the newspaper (as it prefers to be known) championed the right to die through a bold initiative across its editorial platforms, on digital billboards and in a 20-minute film that, through the eyes of one individual, underlined the title’s standpoint on what it considers an important individual right – the right to die. As with all journalism published under the brand, it remains the collective, anonymous work of The Economist rather than being attributed to any given individual writer. New York magazine and #TheEmptyChair In July 2015, New York magazine published a cover story that would go on to spark a global conversation about women’s unheard stories of rape and abuse. The cover featured 35 women who had all accused comedian Bill Cosby of sexual assault and a vacant chair in the bottom right corner of the image to indicate the many other women who have accused Cosby but felt unable to come forward or believed they would not be heard. Behind the cover, there is an essay by Noreen Malone and the individual stories of the 35 women on the cover, who were shot over six months by photographer Amanda Demme. It is a powerful piece of journalism that ignited the conversation around Cosby and, through the hashtag #TheEmptyChair, a wider debate on reporting of abuse. Cosmopolitan and affordable housing With median rent payments in London standing at an eye-watering £1,452 a month, affordable housing is a growing source of concern for Cosmopolitan’s readership. The magazine, which has chronicled the implications for young professionals within its pages, pledged to take direct action in 2016, teaming up with social enterprise Dot Dot as part of its #HomeMade campaign. As a result, 12 readers were offered the chance to become tenants at two Cosmopolitan properties in the capital, benefiting from affordable rent in return for providing 16 hours of volunteering a month in the local area for female-focused causes. The campaign has now expanded to Manchester as part of a new phase, where two flats in a luxury city centre block are being made available to readers for just £1 a month rent, giving them a chance to become more financially secure as they progress in their careers.