Ofcom publishes a discussion paper on the impact of online news on media plurality

On Wednesday, November 16th, Ofcom published a discussion document. It deals with the impact online news (from players like Google, with Google News Showcase, and Facebook, with Newsfeed) has had on News publishers and “Media Plurality”.

Our concern is that a small number of platforms means a small number of outlets, limiting the opportunity for a diversity of voices.

We are also concerned that platforms have concentrated buying power over advertisers. Over the past decade, the major platforms have taken advertising revenue away from online news publishers.

Without income from advertising, news publishers cannot provide their product free of charge. They are being pushed increasingly into subscription services. The public policy issue is subscription means that only subscribers can see what has been written, which reinforces polarization.  

When a diversity of opinion is reduced, public debate suffers.

When sources are not properly researched or subject to the constraints we impose on news publishers, and news broadcasters, misinformation is the result.   

See Ofcom’s discussion paper here.

The report focuses on the role of online intermediaries (or platforms such as Google, Facebook, and Apple).

It assesses how these intermediaries aggregate content. As online distributors and re-publishers they can change headlines and affect consumers’ engagement with news.

The ways in which this new medium affects news consumption can also impact political opinions. Polarization of opinion, knowledge of current events, and public trust is affected.

There is comparatively little mention of the existential issue facing news publishers, which is the impact that this has on newspapers’ bottom line, although Ofcom does reference the excellent CMA market study on the issue from 2020 (see here).

There is no substantive discussion of sources of income. This should be central to any discussion of the impact of online intermediaries on the plurality of the news. The amount paid for news content is difficult to determine. However, one estimate (referenced in Ofcom’s report) suggests that platforms had paid out only £100 million to news publishers (as of 2018). This contrasts, strikingly, with value platforms derive from news content. Professor Elliott estimates that news is worth approximately £1 billion, annually, to Google and Facebook (see here). 

Whatever the margin for error, what is clear is that platforms earn notorious profits is from republishing news. Newspaper publishers are not fairly compensated for this value that they generate. 

The broken journalism report from the House of Lords published in November 2020 (‘Breaking News? The Future of UK Journalism’) has charted the failing fortunes of news publishers. The Cairncross Review, published in February 2019, came to similar conclusions.

The CMA’s 2020 investigation into Online Platforms and Digital Advertising (see link above) found that 80 percent of UK digital advertising spend went to Google and Facebook.

Monopolisation of advertising is breaking journalism worldwide. In the US, for instance, newsroom employment has fallen by more than half since 2008 and 20% of newspapers have closed (see DGMT’s pleadings against Google).   

We consider that any discussion of the threats the platforms pose to news has to take into account the very salient and relevant issue of source of income. This is, ultimately, the real threat to a plural media.

Header image courtesy of Wikimedia Commons (licensed for free under the Wikimedia Commons free license).