Key Highlights:

1. We should welcome a call for an audit of how public money is distributed among the entire media landscape
2. The Local Democracy Reporter Scheme is a success – but it’s time to see it evolve 
3. Why are we still waiting for regulation with the Tech platforms
4. What if everyone contributed to an innovation fund that had a brief to benefit the whole media landscape through scaleable ideas?
5. The DCMS has missed an opportunity to really find solutions to sustainable journalism by failing to look at tax incentive models.

Will journalists, hyper local publishers and large corporates be jumping for joy at the findings of the public inquiry into the sustainability of local journalism published by the The Department for Culture, Media and Sport select committee this week?

I think less of a jump, more of a frustrated hop at best.

The report makes a series of recommendations which, on the face of it, recognise the challenges that have forced more than 300 titles to close in the past 15 years, prevented viable alternative business models from emerging and acknowledge the impact Google and Meta have had on the ability to fund their journalism.

In my opinion, there is a lot of common sense in their recommendations. However, my overriding disappointment is that we have heard many of these recommendations before and there is still nothing to suggest a long-term sustainable solution to the question the committee  set itself.

But let’s start with the positives:

It is absolutely right to reassess how public money is being distributed and who is benefitting from it, whether this be via the lucrative public notices revenue or Government-placed advertising.

As the report notes: “Statutory notices in local newspapers remain an important means of keeping the public informed and a vital revenue stream for many local news publishers.

But the criteria used by some councils to determine where notices are published appear to be outdated.”

“We recommend that the Government review existing rules and practices for placing statutory notices in local newspapers and whether local councils need guidance on how to measure the reach and audience levels of news publications in a digital age. This should include an assessment of how the revenue stream from statutory notices can be made more easily accessible for new entrants to the local news market. The Government should set out the progress of this review in its response to this report. “

The reason why this is important is that publishers have relied on an archaic law dating back to 1870 where public bodies are obligated to place advertisements in printed newspapers – in an age where there was only print as a medium.

Publishers have become complacent – even lazy – as a result of this and many publications would not exist were it not for this source of revenue. However, they have not evolved their offering and are not delivering a value offering to their customers – the people buying the service ie public bodies.

Smaller niche publishers are excluded from bidding for this money – where they may actually provide a better service to local communities with their products.

This may make for uncomfortable reading for larger publishers – but taking a neutral view, this source of income needs an overhaul

And the larger publishers know this, which is why they negotiated a £1m grant from Google to rapidly find a way of evolving their offering to ensure they can maintain their hold on this revenue.

The same is true of public advertising.

The report states: “We are also concerned that the largest publishers take a disproportionate share of the support available for local journalism, to the detriment of smaller publishers and those entering the market. This may be stifling much needed innovation that could benefit the sector as a whole. We recommend that the Government conducts an audit of public money that supports the local news sector. “

The minnows in the publishing world, those start-ups who are not part of the News Media Association, have definitely lost out on Government spending, for example through the covid pandemic advertising campaign, and have a justifiable case to make for a greater slice (or in some cases just any slice of) the advertising cake.

Now for the mixed view on the recommendations.

Once again, and quite rightly, the Local News Partnership-run Local Democracy Reporting Service has come under scrutiny.

There is no doubt, this scheme has been successful in its aim of providing more journalists to cover more local authorities, ensuring a greater degree of scrutiny of public decision-making that was being eroded because of the challenges and costs versus reward of this type of journalism.

As the report says: “The LDRS has had a positive impact on local journalism by enabling important local news stories to get coverage where otherwise they might not.”

It is encouraging the DCMS inquiry has seen the value of this service and is calling for it “to be protected under forthcoming Charter negotiations. Also “We encourage the BBC to explore ways to widen the scope of the service”

But there remains a frustrating haze over its transparency.

The committee questions the domination of the contracts to run the reporters by the major publishers (Of the 165 reporters allocated in July 2021, Reach Plc took 75, Newsquest 28.5, and JPI Media (now National World) 35.5.)

However, it failed to investigate how many other publishers bid for the contracts. If it had done so, I am reliably informed that many of those contracts were single bids.

If you don’t bid, you can’t hope to win a contract.

And in actual fact, it benefits the smaller publishers not to have to run a democracy reporter, with the requirements around HR, payroll, administration etc, in favour of having a reliable feed of content that has been read by a second set of eyes before being made available.

My question surrounding the LDRS is whether it should have a deeper overhaul. With £8m of funding, how else could the LDRS work in a multi-media, multi-platform way? It was set up six years ago but has not evolved – that is the question that should be posed to the NMA and the BBC who run the Local News Partnership.

The second area of mixed frustration is around the impact platforms and the BBC is having on the ability of publishers to innovate.

The tech platforms:

The Digital Markets Competition and Consumer Bill is aimed at redressing the imbalance between the large digital platforms and local news publishers.

Firstly, the smaller hyper local publishers should not be excluded from this process and secondly – which is not explicit in the report’s recommendations… Get a Move On. This legislation is so long overdue and every day it delays, pressure mounts on the industry.

It is recognised that Google is a major funder of local news with £14m awarded to over 80 projects through partnerships with news organisations.

What has been the long-term benefit of this funding? There needs to be a greater sharing of learning across the whole of the news eco-system from this type of funding. There HAS been great innovation – but imagine how powerful that innovation might have been if the £14m of investment and funding had contributed to an industry-wide innovation fund that all publishers could benefit from

And this leads me to the recommendation to revisit the Future News Pilot Fund – and create a long-term public interest fund with a remit to support innovation. 

The last attempt run by Nesta produced nothing of substance for the industry – there were some great little ideas and some ones that were a total waste of money.

How about creating an innovation fund – with Tech platforms contributing – and a requirement that the schemes must be scalable to benefit the entire news eco-system?

My third observation of this report – is reserved for the wholly frustrating part of the recommendations.

And that is the lack of recommendation or any idea about how local journalism could be funded for the future.

• The report suggests the BBC should look to expand its LDRS scheme – but that doesn’t help fund a sustainable business model.
• It calls for the implementation of the Digital Markets Bill – but that only holds the prospect of a better bargaining relationship with the Tech platforms
• And it calls for an innovation fund – which would be a nice to have but will not be properly funded unless some bold moves were taken by publishers and funders to invest in an industry-wide and regulated body.

No, what is still missing is any idea about how a model based on tax incentives should be introduced that rewards investment in journalists and journalism. One, that is equitable for and accessible by hyper locals and large corporates, maintains the separation between the Government and the Media, but nevertheless provides a sustainable way for publishers to invest in a new business model based around the quality of content they produce that is read or consumed by audiences in their local communities.

It has failed to look at other models around the world, for example in Canada, where a more sustainable tax-based incentivisation scheme exists, or looked to learn from the way the arts council operates here to support the arts industry.

And that is the opportunity missed by this latest inquiry that has largely failed to come up with an enduring solution for the sustainability of journalism – which surely was its brief.