Five key takeaways from the UK select committee on the future of news

Credit: Screenshot via Parliamentlive.tv

The UK government has been called on to stop generative AI companies from stealing news content, to rethink its archaic support for local news and get big tech platforms in check.

At a UK select committee this week, two sessions explored the challenges facing news organisations.

Protecting news in a synthetic future

The first session discussed the picture at a national level, featuring David Dinsmore, executive vice president and COO at NewsUK; Peter Wright, editor emeritus at DMG Media; Jon Slade, chief commercial officer at Financial Times; and Anna Bateson, CEO of Guardian Media Group.

What is causing a headache is the proliferation of generative AI systems and their potential to undermine both the editorial and business models of news. 

Recent reports predict that 90 per cent of the internet will be synthetic by 2026 and news executives were concerned about how this could compromise the editorial and business model of news through website scraping. 

There were calls for the UK government to force generative AI companies to license news content; to require transparency about where their data comes from (both for the public and rights holders); and for there to be penalties for using news content without permission.

The FT’s Slade added that news publishers can block most web crawlers, but blocking those from Google would mean news content would disappear from its search results, which would do enormous harm to the publisher's business model.

DMG Media’s Wright warned that a future where generative AI models provide prompts fuelled by other generative AI models will multiply inaccuracies and biases. Independent journalism will become even more essential.

Don't mess with digital subscriptions

Paid licences for AI companies to use news content could also solve another great challenge: the need for multiple revenue sources at a difficult time for news organisations.

National news groups, like legacy print newspaper brands, have had to fundamentally change their businesses over the last 15 years. Besides needing new talent to create multimedia content for social media and online websites, they have also had to reinvent their revenue or distribution models. 

Digital subscriptions are the lifeblood of many news organisations now. The Financial Times revealed that 15 years ago, 70 per cent of its revenue was from print advertising and the rest from newspaper sales. Today, advertising accounts for a quarter of the total revenue. Half of its revenue comes from its successful digital subscription business.

But with every new revenue stream come fresh obstacles. The Mailonline launched a freemium paywall at the end of 2023, as print and digital advertising are declining. This has shown "promising" early uptake, but the publisher told the UK government that the pro-consumer elements of the proposed Digital Markets Bill will make it harder for news organisations to retain subscriptions.

"Take it or leave it"

Relationships with big tech platforms have soured as Meta, in particular, has stepped back from its support for the news industry, both in terms of news appearing on the platform and wider industry initiatives. News publishers have little or no room to negotiate over ad revenue terms or payment for content. 

The FT called for help from the UK government to mandate contractual relationships between publishers and platforms, as the current clear misalignment about the value of news content is causing instability for publishers.

A second session looked at the picture within local media and news startups, with Henry Faure Walker, CEO, Newsquest; David Higgerson, chief digital publisher, Reach plc; Jonathan Paterson, managing editor, The News Movement; and Joshi Herrmann, founder and editor-in-Chief, Mill Media Co.

Similar echos about the dominance of big tech platforms were made: classified advertising - recruitment, property and auto advertising - has been pulled away from news organisations and digital advertising has been taken up by Google and Facebook. 

Newsquest’s parent company Gannett last year filed lawsuits against Google for this monopoly of the market, as the tech giant earned $30bn in advertising, six times more than all other US local news providers. Newsquest said that this is a fair indication of the marketplace disparity in the UK, too. 

Newsquest, however, reported flat growth over the last few years, meaning it has steadied the ship despite dramatic declines in ad revenue over the last decade.

Frosty tensions in local news

Joshi Herrmann of Mill Media was less sympathetic about the state of the news industry, which has recently seen a spate of job cuts, saying it is a problem of its own creation. 

Platforms are not the primary problem, he says, as someone who built a successful, expanding media startup on the digital newsletter platform Substack. The local press is suffering, in his view, because the quality has not been maintained.

"Zombie local newspapers" exist purely to aggregate generic content and local news websites are cluttered with ads to the point of harming the user experience.

Reach plc said in defence that it has introduced an ad-free, premium service for readers who want it. Newsquest is also looking at that option. 

Newsquest’s Faure Walke says that readers are also happy with the current product, with the proof in titles like The York Press which see a fifth (30k) of the local adult population as loyal (returning to the site 15 times a month).

Herrmann insisted though that the news industry needs "a flood of innovation in new players and new ideas and new business models if [the news industry] isn’t going to continue the very clear trajectory it’s been on for the last 15 years."

He called for the UK government to reconsider how public notices work, which provide an estimated £46m a year of funding, which largely goes to large corporate publishers. It excludes newer, digital media startups because it is traditionally for print newspapers. It is money that would go a long way to fostering innovation in local news. 

Building bridges with big tech

Innovation is happening elsewhere in the form of The News Movement, a social-first startup that is trying to take journalism onto emerging platforms like Instagram and TikTok. 

Its research has found that 60 per cent of young people (18-24) get information first on social. "Social is the new search," says managing editor Patterson, and the future needs good relationships between news and tech platforms.

The News Movement has built 400k followers in the last two years - but followers do not equal revenue. The money on offer does not match operational costs and is made worse by trends around news avoidance.

He called for the UK government to help convene tech companies and news publishers to find better ways to work together. In a previous role with the BBC, he was on a YouTube news working group which helped design better features on the platform.

Tech companies need to work on amplifying authoritative content more consistently, producing better partnership managers and designing algorithms to be more sympathetic to news, such as making exemptions from downranking penalties if controversial keywords are used when publishing news content. 

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