by Dr Richard Fletcher & Prof. Rasmus Kleis Nielsen- Reuters Institute for the Study of Journalism
Conversations about the financing of commercial news media are increasingly focused on the long-term sustainability of the industry. Advertising revenues increasingly go to Google, Facebook, and a few other large digital platforms which have further disrupted a business already challenged by the move to digital, and while some news organisations still generate significant offline and online advertising revenues, the share of advertising that goes to news media is declining. Although parts of the audience are willing to take out paid subscriptions from some outlets, and a few titles are doing very well in terms of reader revenues, most people are not willing to pay, as an abundance of news remains freely accessible from commercial and in some cases public service or non-profit providers. Commercial news media are exploring other sources of revenue too (e-commerce, events, services, etc.), but for many publishers, the business outlook remains challenging, even precarious.
Faced with what looks to many like a classic case of market failure in an industry that can – at least in the best cases – deliver demonstrable societal benefits, government intervention is an option. Indeed, some media markets have had such arrangements for decades, for example, in the form of public service broadcasting or considerable direct and indirect subsidies for newspapers. Others are now looking at alternative ways of using policy to secure additional revenues for commercial news media from the biggest platform companies, such as Google and Facebook, either through competition rules codes (Australia), copyright reform (EU), or potentially earmarking parts of new taxes on digital services for journalism.
Public opinion is one of the factors that will shape governments’ appetite for intervention and their priorities. So what does the public think about financing of the commercial news media?
In this chapter, we present data on how concerned people are about the financial situation commercial news organisations currently find themselves in, whether people think they are making more money or less money than in the past, and whether they think their respective governments should step in to help those outlets that are struggling.1
The first and perhaps most important point is that commercial media financing is not a particularly salient issue for many people. This means that a substantial minority say they ‘don’t know’ when asked questions about it. This is a useful reminder that, although media financing is undoubtedly an important issue for society, and those connected to the media industry often feel very passionately about it, it is not something that the public spends a lot of time worrying about. This, of course, has consequences for the extent to which proposals and reforms can gather public support, and will perhaps influence the extent to which politicians will see the issue as a priority.
The relatively low salience of this issue is evident in what appears to be a lack of public awareness of the financial challenges faced by the commercial news media. Although the picture is sometimes mixed and comprehensive global data are hard to come by, WAN-IFRA recently reported that the combined total revenue for daily publications has shrunk by around 20% since 2015. Although there are notable exceptions that have bucked this trend, it seems that since 2010 the overall trajectory is downwards – particularly for newspapers, and especially for local titles and titles serving poor communities.
Across all 33 markets where we fielded this question, around one-third (31%) think that most news organisations are less profitable than they were ten years ago. If we split the data by market we do see some variation, but the differences are small – in every market less than half think that most news organisations are less profitable. Perhaps more striking still is that one-fifth (19%) of respondents believe that most commercial news outlets are more profitable now than they were a decade ago. It is also worth noting that 36% say they don’t know, highlighting again that the finances of commercial media are not front of mind for many people outside of the industry.
This lack of awareness about the plight of the commercial news media aligns well with data showing low levels of concern over their financial situation. Across all markets, 53% said that they are either ‘not at all concerned’ or ‘not very concerned’, with just 31% saying either ‘quite concerned’ or ‘very concerned’. The remaining 17% said ‘don’t know’. Although there is some national variation, if we break this down by market, we see that the overall picture is quite consistent. In almost all cases the proportion who are concerned is usually smaller than 50%, and most of the time the proportion who are not concerned is larger than the proportion who are concerned. The gap is particularly large in Northern European countries, where relatively high rates of online news payment have given some outlets a strong financial footing, and some of the most widely used news outlets are publicly funded and therefore partially insulated from commercial pressure.
Markets with a larger proportion of people who believe that news organisations are less profitable also tend to have higher levels of concern – with the same true at the individual level. However, there are few differences in levels of concern by demographic variables like age, gender, and education. But concern over the financial state of commercial news organisations is usually higher among those with high levels of interest in the news. If we look at a country from each of the six geographic regions, we see that – with the exception of Germany – those with higher interest in news are more likely to be concerned about the financial situation of commercial news media. In the USA and South Korea those that say they trust most news most of the time are more likely to be concerned, but in general trust in the news is not a particularly good predictor of concern. Perhaps most striking is that, even among those with high levels of interest, it is still only a minority that say they are concerned about the finances of commercial news media.
As already noted, some believe that the financial situation of commercial media has reached a point where government intervention is required. Of course, such interventions can take many different forms, each involving different actors and different degrees of change. Furthermore, no two media markets are the same – and because there is a host of different factors that might make state intervention more or less appealing in different circumstances (risk of media capture, pre-existing funding arrangements, trust in the government, to name just three) – there can be no one-size-fits-all approach. However, it can still be useful to measure the public’s appetite for government intervention in general terms, first because people may have views on the underlying principle of government intervention in media markets regardless of the specific details, and second because, although proposed solutions do not have to be based on spending public money, most serious and longstanding non-commercial funding arrangements will probably need to be backed up by government legislation in some way to be workable. It should also be noted that asking about specific policies is of little value in cross-national surveys, because no one policy will be relevant in all markets, and because it is difficult to incorporate and communicate the trade-offs inherent to different options.2
With that in mind, we asked people whether their government should step in to help commercial news organisations that can’t make enough money on their own. Although the reasons behind people’s responses will be varied, and it is not possible to know what these are from the data we have, it is clear that public appetite for government intervention is low. Across all 33 markets, just one-quarter (27%) think that the government should step in to help, compared to 44% that think they should not. Again, if we look at the data market-by-market we do see some national variation, but on the whole the picture is quite consistent. In all but a handful of markets, the proportion opposed to government intervention is larger than the proportion that supports it. Even in stable liberal democracies that already have comparatively generous forms of support available for commercial news media, whether in Denmark (often held up as an example of good practice) or France (where critics argue existing arrangements favour incumbants and print over new entrants and the digital media preferred by younger audiences), those opposed to government intervention outnumber those in favour (by three to one in Denmark, and close to two to one in France).
Those with higher levels of concern about the financial state of commercial news organisations are also more likely to support the idea of government help. In the US, for example, just 14% who are unconcerned about the finances of commercial media would support government intervention, but this figure rises to around one-third (30%) of those with higher levels of concern. Perhaps more of note is that, even among those most concerned about the financial health of commercial news media, most are not convinced that government intervention is the right response.
Although the idea of governments stepping in to help commercial media is not a new one, with press subsidies a longstanding feature of some media markets, and a notion increasingly discussed in industry circles, our data suggest it is not an idea that currently enjoys huge public support. We find that most people do not have a basic understanding of the current financial trends in the industry, and only a minority support government intervention. Even those who are aware of these difficulties are not particularly concerned about them. And even among those who are most worried, there is little support for government intervention as the solution.
Of course, these debates are playing out at a time when trust in the news media is generally low, where some news publishers are very polarising and unpopular with much of the public, and amid real concerns about media capture – sometimes in countries where this has not been a pressing problem in the recent past. Established forms of government intervention (whether public service or direct support for commercial news media) will probably be read in light of these concerns. Perhaps newer, alternative approaches will too, as long as they involve the government as a key actor.
1 We did not ask questions on commercial news media financing in Malaysia, Brazil, Argentina, Chile, Mexico, South Africa, Kenya, Philippines, Colombia, Indonesia, Nigeria, Peru, or Thailand.
2 For example, surveys in the UK that ask people how the BBC should be funded tend to find relatively low support for the licence fee and relatively high support for advertising models – but the respondent is left to assume that quality of output would be the same for both.
Proportion that thinks commercial news media have become more profitable in the last decade Proportion concerned about the financial state of news organisations Proportion concerned about the financial state of commercial news organisations by knowledge and interest Proportion concerned about the financial state of commercial news organisations by knowledge and interest Proportion that thinks the government should step in to help news organisations that can’t make enough money on their own Proportion that thinks the government should step in to help commercial news organisations that can’t make enough money on their own by concern