← back to all news Ofcom: Newspapers play vital role in democratic societ Posted on Friday 22nd June 2018   |   0 comments

In its advice to the Secretary of State on Reach's acquisition of Northern & Shell publications, Ofcom has noted that newspapers play a “particularly important role in a democratic society” and efforts to support their viability are to be welcomed in a marketplace where Google and Facebook continue to increase their share of digital advertising revenues.

Newspapers “play a particularly important role in a democratic society and it is important that they remain able to stimulate debate and investigate freely. Against a backdrop of declining print revenues, we are mindful of the need to support the continued availability of newspapers, both in print and online,” Ofcom has said.

Ofcom’s advice to the Secretary of State on the acquisition of Northern & Shell publications by Reach was published by Matt Hancock this week as the Culture Secretary gave the green light to the deal.

The document highlights the importance of newspapers to democratic society, citing examples of high profile agenda-setting stories broken by newspapers, but acknowledges the difficulties for the industry of operating in the digital marketplace which is dominated by Google and Facebook.

“Given the important position which newspapers occupy within the democratic process, measures to support their continued existence are to be welcomed,” Ofcom said.

The report continues: “Newspapers play a key role in the democratic process. They provide a range of voices that reflect views across society and encourage debate. Yet the newspaper industry faces significant challenges as online news provision has increased and the ways in which people consume news has changed.

“Print advertising, on which the newspaper industry has historically relied for the greater portion of their revenues, is in structural decline following this online shift. Online advertising has not compensated for this decline.

“We estimate that, between 2011 and 2017, for every £1 newspapers lost in print revenues they gained only 15 pence in digital revenues (in real terms). A significant proportion of digital advertising revenues flow to Google and Facebook.

“These two players are estimated to have captured more than half (54 per cent) of all UK digital advertising revenues in 2017. In this environment, consolidation of print publishers may offer a way to support the continued availability of newspaper titles. Given the crucial role newspapers continue to play in public debate, representing a range of opinions, efforts to support their continued viability are important.”

The report continues: “Newspapers play a vital role in UK society. They are important for democratic debate and provide a range of voices that reflect views across society on political and public policy matters.

“Newspapers are part of a wider news market where news is provided in four main formats: televisions, radio, print newspapers and online. In recent years, as consumption of online services has grown rapidly, news providers have been competing for readers and users in a converged market.

“The combination of a reduction in the readership of print newspapers and the growth of online news services presents significant challenges for newspaper groups. Even with the opportunities offered online, it has been harder for newspapers to monetise their readership as print advertising revenues decline.

“Newspapers are adapting their business models and building innovative partnerships. However, the future is still uncertain, and different business models have emerged.

“The press has also “earned a reputation for accurate and vigorous reporting, independence and holding power to account.”

“It engages in important investigative journalism making a significant contribution to the public interest. Recent examples of investigative journalism that have had a significant impact in this respect include the reporting of MPs’ expenses, and the recent cases of the Oxfam and Windrush news stories.

“Newspapers therefore play a particularly important role in a democratic society and it is important that they remain able to stimulate debate and investigate freely. Against a backdrop of declining print revenues, we are mindful of the need to support the continued availability of newspapers, both in print and online.

“The financial sustainability of newspapers has been challenged by the shift from print to online advertising. Google and Facebook are estimated to have captured more than half (54 per cent) of all UK digital advertising revenues in 2017, and it is becoming more difficult for publishers to attract advertising revenues.

“While the newspaper industry continues to experiment with a range of approaches, no clear model has emerged. Given the important position which newspapers occupy within the democratic process, measures to support their continued existence are to be welcomed. Consolidation of print publishers may offer one way to support the long-term viability of newspapers and their role in media plurality.”

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