The House of Lords’ communications committee yesterday published ‘The Future of News’, a report on the state of news media in the UK. The findings, perhaps unsurprisingly, weren’t too positive.
Difficulties monetising content, the continued growth of social platforms as news sources, and developments in AI continue to threaten the economics of mass market journalism. The report argues that there is a growing risk of a ‘two-tier’ media environment in the UK, where the population is split between well-served regular news readers and those who have limited or no engagement with professionally produced news.
The report concluded that without action, “there is a realistic possibility of the UK’s news environment fracturing irreparably along social, regional and economic lines within the next 5–10 years. The implications for our society and democracy would be grim”.
While the troubles facing news publishers are well known across the media industry, a lot of the report’s most interesting insights come from submissions and evidence provided by the UK’s news providers. These submissions give honest insight into the specific challenges facing news media businesses, and how these companies are grappling with these issues. We’ve picked out some of the most interesting insights below:
DMG Media: Sandbox Struggles and TikTok Trials
DMG Media, which publishes the Daily Mail, MailOnline, Metro, i, and News Scientist, provided some interesting data on Google’s Privacy Sandbox. The tech giant’s decision to not completely remove third-party cookies from Chrome means the future importance of the Privacy Sandbox is unclear. But DMG Media says that if it plays a significant role, testing suggests there will be a negative effect on its revenues.
“Our modelling shows that our revenue per thousand impressions (cpm) on our Google Chrome traffic is 31 percent lower with Privacy Sandbox in place of cookies,” DMG Media said. “In contrast, removing third-party cookies without adding Privacy Sandbox causes a 35 percent drop in cpm. This suggests deprecating third-party cookies will cause a very significant drop in revenue, which Privacy Sandbox will do little to ameliorate.”
The publisher also provided insight into its TikTok strategy, outlining its monetisation struggles. The Daily Mail has invested heavily in TikTok, topping 20 million subscribers across its channels. But while its TikTok traffic is growing rapidly, “converting this investment into revenue is more difficult,” according to DMG Media’s submission.
The publisher said that TikTok’s primary monetisation focus is e-commerce, which doesn’t reward creators. And while it does sell contextual ads between videos, only publishers signed up to its Pulse Premiere programme receive payment. Membership to this programme is hard to come by, mainly limited to TV, sport, and fashion focussed media companies. DMG Media says it applied to be part of this programme, but has so far been refused.
Native sponsorship thus is the “only viable means” of monetising news on TikTok, and TikTok is happy to do deals, according to DMG Media. But these deals aren’t really appropriate for investigative journalism. Rather, publishers have to tailor content to advertisers’ wants, and will likely have to pay TikTok to promote this content and pick up sufficient views.
YouTube also provides something of a two-tier experience to publishers, according to DMG Media. “It maintains a list of premium publishers, such as Conde Nast, which receive as much as $7-8 revenue per 1000 ad placements delivered (CPM), while other publishers receive as little as 27 cents cpm,” it said. “There is little or no transparency on how or why YouTube decides content from one news publisher deserves 25 times the revenue offered to another.”
Channel 4: YouTube Age-Gating News Content
Louise Compton, Channel 4’s head of news and current affairs, emphasised in her submission the importance of reaching younger audiences with news content, as younger generations tend to be less trusting of professional news organisations. Ipsos Brand Tracker data from 2023 found that just 58 percent of 16-24 year olds believe Channel 4 news reports the news accurately and fairly, compared with 70 percent of 25-34 year olds. Compton says that news avoidance among young audiences contributes to this issue.
But its efforts are hampered in part by age-blocking of Channel 4 content on YouTube. Channel 4 has embraced YouTube as a distribution platform, creating content specifically for YouTube and distributing full episodes of its TV shows on the platform. For news content however, YouTube’s age-gating policy means access to younger viewers is restricted, even when it’s been approved by Ofcom for pre-watershed broadcast.
Compton said that at the time of her writing, 41 C4 news reports had been age restricted since October 7th, 2023. “Although they were cleared by ITN’s compliance team to comply with Ofcom’s rules for a 7pm broadcast, they were age-gated by YouTube when we uploaded the reports onto their platform with little or no clarity as to why,” she said. “This means that in order to view the content on YouTube, a user is required to confirm that they are over the age of 18, otherwise the content is blocked.”
This blocking “has a huge impact on reach” according to Compton. And even if blocks are eventually removed, any delays to Channel 4’s news content being freely published have a significant impact on reach, since the life cycle of news is very short.
Financial Times: Unavoidable AI Scraping
Matt Rogerson, director of global public policy and platform strategy at the Financial Times, highlighted in his submission the difficulties of avoiding content scraping by AI businesses.
The FT has done a number of licensing deals with AI companies, including OpenAI and ProrataAI, and Rogerson says these deals “begins to align the incentives of AI platforms and publishers in the interests of quality journalism, the reader and respect for IP”. But this goal of aligning incentives is being undermined by the scraping practices of incumbent technology companies.
Rogerson pointed to Google specifically. Google allows website owners to block its scraper which is used to train Google LLMs, thus opting out of their IP being used as training data. But Google’s search scraper, which powers Google’s search results and thus is crucial for publishers, still gives Google “unparalleled access to IP published online”, according to Rogerson. And while this data was traditionally just used for Google’s search engine results pages, Rogerson says it’s now being used to enable Google’s LLMs, as well of those of third party businesses like Meta, “to respond accurately to user queries in real time”.
“This capability, known as Retrieval Augmentation Generation (RAG) when used by Google and sold to companies like Meta, means that those companies extract commercial value from the source material, without a user ever engaging with the source of that information,” he said. The only way to opt out, according to Rogerson, is to opt-out of Google search entirely. “This leaves website owners with an unenviable choice. To opt-out of the Google Search crawler entirely, and become invisible to the 90%+ of the UK population that currently uses Google Search, or allow scraping to continue in ways that both extract value without compensation, and undermine nascent commercial licensing markets for the use of high quality IP to build and enable the AI models of the future,” he said.
ITV: PSB News Economics Don’t Add Up
ITV’s submission outlined the challenges facing commercial PSBs in producing and funding news content, given their lawful requirements and restrictions on their ability to run ads alongside that content.
ITV says it spends “well over £100 million each year” on national, international, nations and regions news services. News is inherently expensive – for example, coverage of conflicts in Ukraine and the Middle East require teams to be deployed “in remote and dangerous locations at great expense”, according to the broadcaster. And recent changes have driven up costs further. “The evolution to remote working and digital delivery, which predated but was super-charged by the Covid-19 pandemic, required a significant outlay of capital expenditure and structural organisation that put even greater pressures on our teams and our budgets,” ITV said. The company noted that Sky is the only non-PSB in the UK to offer a news service, and Sky is still bound by merger-related obligations to provide Sky News (which expire in 2028).
“Effectively, ITV has to make well over £100m elsewhere in our broadcast business simply to pay for our news services,” said ITV. “Those news services make very little money and generally do not carry much advertising (because we have a strictly limited number of minutes of advertising on TV).”
On that latter point, there had been hope that regulation might be updated to enable PSBs to run more ads alongside news content. Ofcom however decided against a rule change following a review. Subscriptions meanwhile aren’t an option, since PSBs are bound by law to provide free access to news content.
Reach: Algorithm Changes Causing Job Cuts
David Higgerson, chief digital publisher at Reach, outlined the impact of Meta’s deprioritisation of news, which a range of publishers say have resulted in significant falls in traffic.
Meta has defended its decision by claiming that Facebook users weren’t really engaging with news content anyway. Higgerson disputes this claim.
“Having worked well with Meta (then Facebook) for a number of years, their decision to de- prioritise news on its platform didn’t reflect the data we were seeing,” he said. “People were clicking through to our content in record numbers, at odds with the claim from Meta that ‘people didn’t want news on its platform.’ Our assessment is that Meta has concluded that supporting the news industry globally is just too much hassle, and if given a choice, it would rather deplatform news and serve other stuff up to people, rather than be an active player in ensuring communities globally have access to reliable, researched information.”
Following Meta’s algorithm change, page views to Reach’s local sites fell in some cases by up to 30 percent. Total local reach remained largely unchanged, but as Reach’s audience were seeing Reach-owned content appearing on Facebook less regularly, they were reading less articles in total.
“The impact of Meta’s decision to deprioritise news was a driving factor behind the revenue decline Reach reported last year, and in turn was a contributing factor in hundreds of journalism posts being lost during 2023,” said Higgerson.
Higgerson added that Google has had “a more proactive” relationship with publishers, and has actively looked for ways to support the industry. But he said that efforts are being undermined, firstly by the fact that Google’s algorithm often seems to prioritise national and international outlets for local stories, even when local outlets provide much more detailed coverage of those stories, and secondly by the share of revenue it keeps from advertising.
