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Research Into Recent Dynamics of the Press Sector in the UK and Globally Research into recent dynamics of the press sector in the UK and globally May 2020 Tony Lavender, Laura Wilkinson, Dr Gordon Ramsay, Dr Sami Stouli, Stephen Adshead, Yi Shen Chan plumconsulting.co.uk About Plum Plum is an independent consulting firm, focused on the telecommunications, media, technology, and adjacent sectors. We apply extensive industry knowledge, consulting experience, and rigorous analysis to address challenges and opportunities across regulatory, radio spectrum, economic, commercial, and technology domains. About this study This study for the Department for Digital, Culture, Media & Sport examines recent dynamics of the press sector in the UK and globally. The research objectives are: (A) to assess the relationship between local news consumption and democratic engagement, and (B) to review the different forms of government support, including subsidies, that the press industry receives in other jurisdictions. Plum Consulting 10 Fitzroy Square London W1T 5HP T +44 20 7047 1919 E [email protected] Recent dynamics of the press sector Contents Executive Summary 5 Local journalism and democracy 5 Local newspaper performance 5 Relationship with local democratic participation 6 Government press sector interventions in other jurisdictions 8 Key findings and conclusions 10 1 Introduction 12 1.1 Objectives 12 1.2 Methodology 13 1.3 Caveats 13 1.4 Structure of this report 14 2 Democracy and the UK press sector 15 2.1 Journalism and democracy 15 2.2 UK news media market 18 3 Geographic analysis of local press sector 31 3.1 Methodology and limitations of the analysis 31 3.2 Local newspaper titles 33 3.3 Concentration of publishers and coverage 37 3.4 Local newspaper circulation 40 3.5 Print and online reach 44 3.6 Summary of geographic analysis 46 4 Local democracy and press sector analysis 48 4.1 Data description 48 4.2 Approach 49 4.3 Summary of findings 50 5 International examples of government press sector interventions 53 5.1 Australia – Regional and Small Publishers Innovation Package and ACCC Digital Inquiry Report 55 5.2 Austria – Press Promotion Act 2004 68 5.3 Canada – Federal Government Support for Canadian Journalism 79 5.4 France – Direct Aid to Regional and Local Press, and Strategic Press Development Fund 93 5.5 Netherlands – the Dutch Journalism Fund & the Dutch Fund for In-Depth Journalism 106 5.6 New Jersey (USA) – New Jersey Civic Information Consortium 115 5.7 Portugal – 2015 State Incentive Scheme 121 6 Conclusions and strategic recommendations for the UK 128 © 2020 Plum Consulting Recent dynamics of the press sector 6.1 Key research findings 128 Appendix A JICREG local newspaper data 134 A.1 Observation level and data transformation 134 A.2 Identifying ‘local’ newspapers 134 Appendix B Local press sector & democracy: econometric analysis 137 B.1 Data and methodology 137 B.2 Results 141 Appendix C Econometrics of results 149 Appendix D Additional geographic analysis 165 © 2020 Plum Consulting Recent dynamics of the press sector Executive Summary This study by Plum Consulting for the Department of Digital, Culture, Media & Sport (DCMS) examines recent press sector dynamics in the UK and internationally. The two main objectives of the study are to: (a) identify and understand the relationship between local news provision and consumption and local democratic participation, and (b) to examine the different forms of government support (including subsidies) that the press industry receives in other jurisdictions. The study was conducted in March to May 2020 and involved a review of publicly available information, relevant industry reports and academic studies, as well as analysis of local newspaper data supplied by the Joint Industry Currency for Regional Media Research (JICREG). The report provides a snapshot of the press sector at the time of writing. The UK press sector has been significantly affected by the outbreak of Covid-19 crisis that unfolded during the study, which has strongly exacerbated negative structural trends and placed increased pressure on already weakened publisher business models. Plum’s research has focused on three key areas: the current performance of the local newspaper sector across the UK; the relationship between local newspaper performance and local democratic participation; and the forms of government support for the press sector internationally. Performance of the national local newspaper sector, and its influence on national elections were out of scope. Local journalism and democracy Local journalism has a key role to play in civil society. The decline of the local newspaper industry, and resulting negative impacts on journalism, reduce scrutiny of democratic functions. There are differences of opinion on the specific functions that journalism should be expected to play in liberal democratic society. However, there is general agreement that democracies can only function effectively where the public has access to enough information to make informed decisions in civic life. Therefore, the presence of journalism in civil society is vital to its functioning. Scenarios in which there is a reduction of news capacity are likely to be damaging, and the absence of journalism potentially catastrophic. The impact on communities by the removal or reduction of local newspaper coverage can be profound. There are significant stresses arising from increasing commercial pressures on local newspapers’ ability to perform their civic roles. The closure of local and regional news titles has led to underreporting and less scrutiny of democratic functions. The resulting strategic responses to commercial decline by the local newspaper industry have been found to have detrimental effects, particularly in rural areas. Looking ahead, challenging conditions for UK local and regional news publishers are likely to continue. There is no doubt that the Covid-19 crisis has already and will continue to have a significant impact on the future market structure, news provision and consumption – particularly for the local newspaper market and its ability to maintain the presence of local journalism. Local newspaper performance Our analysis of local press performance is based on JICREG data, and focuses on local newspaper titles, reach and circulation across Local Authority District (LAD) areas. The purpose of this analysis is to provide a current snapshot to identify areas that are well or underserved by local newspapers and to illustrate general trends within the local newspaper industry. © 2020 Plum Consulting 5 Recent dynamics of the press sector Our key findings are outlined below. • There has been significant decline of daily and weekly local newspaper circulation from 2007 to 2019. Our analysis indicates that average daily print circulation across all LADs in 2019 is at 31% of 2007 figures, while weekly print circulation in 2019 is at 39% of 2007 figures. • The decline of daily local newspapers has been substantial, with a reduction from 209 of 380 LADs covered by a daily local paper in 2007 to 142 LADs in 2019 (once ‘national’ daily titles, non-local newspapers and newspapers with exceptionally low circulation and household penetration are removed from the LAD circulation data) – as shown in Figure 1 (left) • In 2019, 223 LADs were served by a single publisher. We identify that 73 LADs were covered by multiple titles from one publisher, while 150 LADs were covered by a single newspaper (47 by a daily title; 103 by a weekly title). Figure 1 (right) highlights the variation in the number of local news publishers serving LADs across the UK. Figure 1: Local daily newspaper titles (left) and local newspaper publishers (right) Source: Plum analysis of JICREG data Relationship with local democratic participation A central objective of this study is to establish and understand the relationship between provision and consumption of local news and local democratic participation across LADs. We use local election turnout as our measure of democratic participation. Our analysis indicates that local newspaper circulation and reach has a positive and significant effect on local election turnout over time, as shown in Figure 2. In particular, the positive correlation between circulation and turnout remains present across our analysis; areas with higher levels of local newspaper circulation also report higher local election turnout. We also find evidence to suggest that time invariant factors (such as © 2020 Plum Consulting 6 Recent dynamics of the press sector specific geographic or demographic factors that are not captured in the data) are important determinants of a LAD’s local election turnout rate1. Figure 2: Key findings for local newspaper performance and local election turnout over time Local newspaper Change in newspaper performance Impact on turnout rate measure Daily circulation A 1 percentage point increase in daily circulation amongst 0.37 percentage point increase adult population Weekly circulation A 1 percentage point increase in weekly circulation amongst 0.10 percentage point increase adult population Local newspaper title An additional daily or weekly local newspaper title 1.27 percentage point increase Daily average issue A 1 percentage point increase of daily average issue 0.50 percentage point increase readership amongst readership by over-65s in terms of adult population over-65s Weekly average issue A 1 percentage point increase of weekly average issue Direction (positive or negative) and readership across all readership across all age groups in terms of adult population strength of
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