Written evidence submitted by the Department
for Culture, Media and Sport
SUMMARY
1. Government is aware of the intense challenges
facing local news providers, including radio and television as
well as local newspapers. We launched the Digital Britain report
in October and published an interim report in January. That report
acknowledged these challenges and sought views from the industry
about what role local journalism would play in the digital age.
2. Further to that, Secretary of State for
Culture, Media and Sport Andy Burnham hosted a summit on 28 April,
at which key representatives from the industry, as well as other
stakeholders, were present.
3. The purpose of the event was to give
those with an interest the opportunity to look at the various
ways to support local news providers, as part of the ongoing programme
of work looking at the future of media as part of Digital Britain.
The day's discussion will feed into the final Digital Britain
report to be published in the summer.
4. Broader Government policy on the future
of local and regional media will be informed by a range of sources,
including relevant reports from the Office of Fair Trading and
Ofcom, the Power of Information Task Force and the consultation
on the Killian Pretty Review.
IMPORTANCE
OF LOCAL
AND REGIONAL
MEDIA
5. Government recognises the importance
to our democracy of local news, as a source of independent local
information produced to high journalistic standards, and news
plurality. We believe that wide availability of news at all levels,
national, regional and local, is at the core of public service
content. Research carried out as part of Ofcom's public service
broadcasting (PSB) review showed very clearly that people trust
and value the provision and choice in news services in this country,
and they trust and value local and regional news in particular.
CHALLENGES
6. The local media sector is facing difficult
times. In the UK today, there are some 1,300 regional and
local newspapers, read by 40 million adults, and 1,100 websites,
estimated to reach at least 20 million adults.
7. While online readership of local newspaper
websites is rising, physical circulation is experiencing a year
on year decline in the region of 5.2%. Some local newspapers are
closing with many more forced to make job cuts.
8. The situation has been exacerbated by
current market conditions, with the decline in advertising revenue
(currently at 30% year on year) particularly pertinent. This fall
in advertising is a result of structural and cyclical factors.
Structurally, advertising has moved online. Cyclically, local
press depends heavily on the classified advertising sector, where
recent economic circumstances have seen advertising of jobs, houses
and cars decrease.
9. Other challenges facing local newspapers
include the costs associated with owners transforming their businesses
from a single format product to a multiplatform one. This requires
both capital expenditure and also new skills in both content creation
and for selling advertising space. Finally, the price of paper
has itself risen.
DIGITAL BRITAIN
10. The Digital Britain Report assesses
the UK's readiness to exploit the dramatic shift to digital platforms
as the basis for huge parts of our economy, as well as our private
lives, and one part of this is how the news media are meeting
the challenges of a changing world.
11. We are seeing a convergence of local
content in print, broadcasting and the internet. It would be unrealistic
to see newspapers in isolation, as a separate group from online
publishers. Increasingly, there is a content business, and content
is distributed in different ways. In an environment in which there
is a transition to the versatility of the digital world from traditional
methods of newsgathering and reporting, the Government is giving
consideration to the future of news in light of the opportunities
presented by Digital Britain.
12. In the interim Digital Britain
report, Government called on the local newspaper industry collectively
to contribute to the discussion on how to continue to provide
high quality, impartial news in the digital age, and specifically
on the role of local journalism. Following a series of meetings
between Andy Burnham and various representatives of the industry,
Government hosted a summit on 28 April where these views
could be shared collectively to help inform the direction of travel.
13. Speakers at the summit included Stephen
Carter (Minister for Communications, Technology and Broadcasting),
Ed Richards (Chief Executive, Ofcom) and Alan Rusbridger (Editor,
The Guardian). To make sure that a broad range of interests
were represented, attendees included the National Union of Journalists,
the Society of Editors, the Newspaper Society, Ofcom, the Press
Association, as well as other Members of Parliament and key stakeholders
from national and local television and radio.
14. In his speech, Ed Richards said that
Ofcom had been looking at potential models of how to deliver news
in the nations, regions and localities. One would involve the
setting up of news consortia, based on nations and regions, which
would deliver a quality regional TV news service providing plurality
alongside the BBC, deliver a range of news in nations, with scope
for a cross-media service integrated into and contributing to
the wider local media ecology. The news consortia could comprise
news broadcasters, regional newspaper groups, local TV and radio
stations, picture agencies or independent producers.
15. Ofcom's proposal, and others discussed
on the day, will inform and feed in to the final Digital Britain
report to be published in the summer.
MODELS OF
OWNERSHIP
16. Government believes that there is a
viable business model to deliver local and regional news, and
is encouraged by the efforts of businesses to adapt to the converged
world. We believe that convergence in the media industry should
not only raise challenges but should also create new business
opportunities for high quality local content to be delivered to
citizens across a wider range of platforms than previously.
17. While it is not for Government artificially
to sustain a business model if it is failing, nor is it Government's
place to intervene in the management of individual newspapers
or the commercial management of individual businesses, Government's
regulation of business does however impact on the newspaper industry
in various ways, particularly in the regulation of monopolies
and mergers, including the ownership of media.
18. That is why, in the Digital Britain
interim report (action 14), the Government invited the Office
of Fair Trading, together with Ofcom and other interested parties,
to examine whether any change is needed in the merger regime for
local and regional media, with a particular focus on print media.
19. OFT completed the first phase of its
review, seeking views from interested stakeholders on the main
scope of its review in to the local and regional media sector,
and issued a discussion paper on 13 March, inviting responses
by 31 March.
20. The discussion paper briefly set out
how the media merger regime operates and focuses on areas where
Government and stakeholders have identified potential issues of
relevance to the review. OFT also held hearings with key stakeholders.
21. The OFT will submit key findings and
any recommendations to Government in line with its timetable for
publication of the Digital Britain final report in the
summer.
22. In terms of the broader media ownership
rules which govern the ownership of television, radio and newspapers
in the UK, Ofcom is required to review these rules at least every
three years. These rules are designed to strike a balance between
ensuring a degree of plurality on the one hand, and providing
freedom to companies to expand, innovate and invest on the other
hand. Ofcom last reviewed these rules in 2006. Ofcom's next review
is due this year.
COLLABORATIVE
WAYS OF
WORKING
23. Government is encouraged by recent examples
of partnership working, for example the Memorandum of Understanding
signed by the BBC and ITV on a partnership to provide regional
news in England and Wales, and the BBC's recent announcement to
offer a similar package of resources to local news providers.
PUBLIC SECTOR
PUBLICATIONS
24. Government is aware of the concerns
raised by local commercial newspapers that they are facing increasing
competitive pressure from public sector bodies. Government policy
on this issue will be informed by a range of sources, including
the OFT review and the Power of Information Task Force, published
on 2 March 2009.
25. In addition, and specifically on the
issue of planning, the Government response to the Killian Pretty
Review includes a commitment to consult on the recommendation
in that Review to give greater flexibility to local planning authorities
to determine the most cost effective way of informing the public
about planning applications. Government would not want to make
any changes to the planning process that could leave local people
in the dark over proposals that affect them. Therefore, the decision
on whether to remove the mandatory requirements to advertise certain
planning applications in local newspapers will follow this consultation.
INTELLECTUAL
PROPERTY
26. Government is aware of the concerns
raised by the newspaper industry that some internet providers
are aggregating news gathered by the newspaper industry and republishing
it online.
27. Copyright law is determined by a combination
of UK laws, EU directives and international treaties. Copyright
is primarily a civil law matter and it is mainly for rights holders
to sue if they feel their rights have been infringed. The Intellectual
Property Office is responsible for the UK's copyright framework,
but it does not function as a regulator.
28. The Government is encouraging the newspaper
industry and internet providers to collaborate in the investigation
and implementation of initiatives such as Automated Content Access
Protocol, which marks web pages to identify the IP owner.
May 2009
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