To sustain journalism for the rest of the 21st century, governments must fund journalism, as they have funded the car industry or banks
- Media companies are returning to profit – but this will not lead to a return of well-resourced journalism
- Paywalls are unproven and online advertising does not supply the resources to fund good journalism
- Journalism will be compromised if journalists have to spend too long thinking about sources of funding
There are two divergent perspectives on today’s media. One is apocalyptic – it is that of Robin Sloane and Matt Thompson in Epic 2015 (epic.makingithappen.co.uk). They predict that in three or four years, The New York Times will be a newsletter aimed only at elite readers. It is the future predicted by Bob Garfield, who argues that we are seeing the collapse of the media infrastructure that we have known for the past 400 years; and by Clare Enders, who predicts that 650 local newspapers will close in the next five years.
The same view can be found in Michael Grade’s evidence to the Culture Media and Sport subcommittee, which he told ‘viewers would gain if ITV dropped all regional news’.
The opposing view was expressed in the last edition of the USA title Editor and Publisher. It said: “The newspaper business is rebounding from the depths of this worst-in-memory recession and big city papers are poised for a strong performance this year.”
That view is supported by figures showing the profit margins in the regional press groups – Trinity Mirror 11.1% in the last 12 months; and, Johnston Press, debt-ridden, slashing jobs and job-cutting though it is, made profits of 17.5%. By way of comparison look at Tesco – where the profit margin last year was just 5.1%. Regional media companies are still healthy. ITV pleads poverty, but its portfolio of channels still draws in 40% of the commercial tv audience. Those eyeballs translate into advertising revenue – revenue which, year-on-year, in the year to the end of December, was up by 14%.
Viewed this way, the media industry is financially in quite a good position – because it has torn out costs and overheads are low. But our papers have been hollowed out and are filled with press releases and syndicated material. There is nothing to suggest that the return to profit means a return to well-resourced journalism, however.
So what is the solution, if we believe that news is a key component of a democratic society? Murdoch is pinning his hopes on paywalls. I have my doubts about them.
Another possibility is web advertising – but all the evidence is that the revenue is miniscule. Big websites in the USA, such as The Huffington Post, are, at best, breaking even. Others, such as talkingpointsmemo.com, is funded by venture capital, individual donations and volunteer labour.
Others rely on just donations – such as the aggregator commondreams.com, or Open Democracy in the UK. According to Chuck Lewis, the founder of the Center for Public Integrity in the USA, all the foundation grants in 2008 gave around $20m for non-profits to undertake investigations. That is about one tenth of the annual newsroom budget of the New York Times. Also, there is no equivalent of the foundation grants in the UK.
My message is that there is a key role for the state, if we want a vibrant journalistic sphere.
Government has made a token gesture. Ofcom and DCMS have set up three Independently Financed News Consortia, serving Scotland, Wales and the Borders. These should be opened up, not to the old structures – newspapers and tv channels, but to new, innovative, bids. At the moment it looks like the old gang – the regional newspaper groups and ITV companies – will be allowed to rearrange the deckchairs.
We have to forget about the old ways. It is all too easy to compromise journalism if journalists have to worry about finance.
We are at a key point where government could intervene to sustain and support a new model for journalism in the UK. They should not support organisations that have abandoned journalism, but instead, make money available so that young people, with serious ideas to put forward, can be sustained. There are lots of technological developments that are very interesting, but few generate any money.
Even if the economy is resurgent, companies that have given up on journalism will not change their priorities. For this reason, government must rethink its role and fund journalism as it has the banks and car industry.
Granville Williams is a writer, media commentator and member of the national council of the Campaign for Press and Broadcasting Freedom (CPBF ) for whom he is directing a research project, Media Ownership in the Age of Convergence . He has written or edited books on media topics – Britain’s Media: How They Are Related; Shafted: The Media, the Miners’ Strike and the Aftermath.
How are we going to make journalism pay? By saying to advertisers that we can help them reach a mass audience online, an elite audience in print, and, get to interact with readers at events
- Despite the recession, the media has remained profitable, and is now poised to bounce back
- There are opportunities for micro publishing, some examples of which are already making money
- There are signs that even traditional local newspapers are bouncing back
A year ago, the media seemed to be facing an apocalypse. Johnston Press’s shares went down to about 12p and Trinity Mirror’s to 15p – that from companies that used to have share prices in the region of £5. To those who invested in journalism, it seemed like the end. There were big redundancies and closures of papers. Looking today, media share prices are nowhere near where they were – the share price of the above companies is now above £1. That means that the worst of the crisis is over and people are starting to launch new products.
Press Gazette (PG) has gone into administration once, closed twice and gone from weekly to monthly – so we are not a shining example of a media brand that has triumphed. We have survived, however, when everyone had written us off – and there are some lessons in how we did it.
Like most B2B magazines, the bulk of our income used to come from jobs ads. The internet did for that, as did holdthefrontpage.com, which is jointly owned