'Platforms should pay for news' a peer committee says

Public interest news, such as investigations into government spending or court reporting, often does not make for the most exciting or entertaining reading, but it is essential for a functioning democracy.

The problem is that high-quality journalism is costly and resources to finance it are getting scarcer every year. Advertising spending has taken a nosedive during the pandemic, subscriptions to news are still painfully low and philanthropic funding - although flourishing in the US - is pretty much non-existent in the UK.

Could readers pay for essential news? Should the government chip in? Or should social platforms who use publishers' content pay for it? We caught up with Lord Gilbert of Panteg who chaired the House of Lords Communications and Digital Committee that today published a report on the sustainability of journalism.

Lord Gilbert answered our questions via email and the answers were lightly edited for brevity and clarity.

Q: Many of the problems raised in the report have been affecting the industry for years. Did you come across any findings that genuinely surprised you?

It is right that many of the challenges around income from news online are not new. In April 2018 my committee called for the Competition and Markets Authority to conduct a market study of digital advertising which it launched in July 2019, after others supported our recommendation. However, we were struck by the pace of change and how covid-19 has accelerated that.

Similarly, we have been critical of the Apprenticeship Levy since its introduction in 2017. It just does not work for the media and creative industries. Even so, we were surprised at how very few journalists enter the profession through that route. One survey found that 98 per cent of early-career journalists have at least a Bachelor’s degree – and there is evidence of increasing pressure to do a Master's in journalism too. University should not be the only route into journalism. It is essential that the Government listen to the industry's concerns and introduce greater flexibility to how the Levy can be spent.

Q: It became evident, especially since the beginning of the pandemic, that organisations with membership or subscription models are faring better. However, the British public is still largely not willing to pay for news. How can we incentivise them?

Only seven per cent of people in the UK pay for online news, which presents a major problem for publishers. Audiences are used to paying for Spotify, Netflix and other subscription services but there is more work to do to encourage people to pay for journalism rather than relying solely on free services.

Part of the answer is supporting media literacy and recognising that it is about more than spotting 'fake news' – it is about understanding the value of high-quality journalism. There are lots of good initiatives, particularly for younger people, but they lack coherence. We recommend that Ofcom or another body across government, media organisations, platforms, academia and charities. France's media literacy body, CLEMI, could provide a useful model.

Q: Should the UK tax US tech platforms more to support domestic journalism?

We did not examine taxes in this inquiry. However, the problem with any new tax to support journalism is that it is essentially a subsidy. In distributing the funds raised, the Government would be picking winners. Google and Facebook both run initiatives to fund innovation and training, which is welcome.

What publishers need, though, is structural change to address the imbalance of power in their relationship with platforms. That means reform of the online advertising market and a new mandatory bargaining code, modelled on the Australian system, to compel platforms to pay publishers for the use of their content. These kinds of measures can create a fair market in which publishers do not need to rely on hand-outs.

Q: Is there political will to grant charitable status to public news organisations?

This change is unlikely to come in the form of primary legislation: the Government has stated that the Charities Act already provides enough room for journalistic organisations to gain charitable status.

Rather, as demonstrated by its recent decision to grant charitable status to the Public Interest News Foundation (PINF), it will likely come from the Charity Commission. This decision is encouraging for public interest journalism organisations seeking charitable status. It sets a precedent for future decisions: PINF was the first public interest journalism organisation to meet the charitable purpose of advancing citizenship. While PINF itself is not a publisher, this link between public interest journalism and promotion of citizenship could be used by other organisations to argue their case.

Q: What is the most important recommendation?

The success of our news industry is critical. Established news providers have reminded us of their value once again during the pandemic, even as economic pressures have placed unprecedented strain on their business models.

The government must create the conditions for news organisations to thrive. There are many great examples of innovation in the industry, but it can only succeed if the government fixes the dysfunctional online advertising market and addresses the imbalance of power between platforms and publishers.

There are many funding schemes for the industry, both public and private, some of which have received a mixed reception. It is not always clear how they fit together. Their independence is crucial, but we think there is scope for the major funders to get round the table and work out a more strategic approach to helping smaller and local news organisations to build sustainable business models.

Q: What other enquiries are you planning?

It became clear from the evidence we heard that the Digital Markets Unit is the right way forward and urgent so I congratulate the government on listening to the arguments and acting.

Many of the issues we discussed overlap with the scope of our next inquiry, which will be on freedom of expression online. We will be returning to debates around how the algorithms which surface and promote content are designed and the extent to which platforms are now acting as publishers. Anyone interested can follow the inquiry and make a written submission on our website.

Join us at our next digital journalism conference Newsrewired from 1 December 2020 for four days of industry expert panel discussions and workshops. Visit newsrewired.com for event agenda and tickets.

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