House of Lords - The future of investigative journalism

The future of investigative journalism - Communications Committee Contents

CHAPTER 2: The economic challenge

Economic changes

29. Investigative journalism is an expensive form of journalism, principally because it is often labour intensive and it carries a significant amount of legal risk. The BBC explained that "investigations ... can take months, sometimes years, to come to fruition. This is intrinsically costly."[18]Mr Edmund Curran OBE, Member of the Newspaper Society, claimed that, "the costs of getting into trouble are so high that frankly it could close down a weekly newspaper".[19] It requires an economically healthy media with adequate resources at a time when the newspaper and broadcasting industries are encountering many economic challenges, as outlined in this chapter. Investigative reporting, which can be expensive, litigious, and politically fraught, has often been one of the first areas of journalism to feel the squeeze.

30. Television and radio broadcasters have also been subject to economic pressures in recent years as a result of declining advertising revenues[20] and the real terms cut in the most recent BBC licence fee settlement.

31. The way in which people receive news is also changing. Although an overwhelming majority of people continue to cite television as their main source of news (see Figure 1 below), the internet is rapidly becoming more popular and is now equal to radio as the second most popular main source of news in the UK. This analysis includes newspaper websites and other sources of news online such as blogs, search results in Google, i.e. news aggregators and social media.

FIGURE 1

Main source for UK News[21]

FIGURE 2

Trend in main source of news and information about local area[22]

32. In written evidence, the Department for Culture, Media and Sport (DCMS) commented that: "Although a minority of consumers (18%) rely on a single media owner, most consumers draw on a range of sources for news and current affairs. OFCOM research estimated that the average news consumer used 2.9 news providers in a typical week. Data from NewsCorp put this higher at 4 sources per week, but included local and regional sources as well".[23]

33. Certain witnesses before this Committee have described the 1960s to 1980s, when programmes such as Panorama on the BBC and World in Action on ITV received large audience ratings and The Sunday Times had a large 'Insight Team', as the 'golden age' of investigative journalism. With increasing economic pressures facing both the newspapers and broadcasting industries and a cultural shift in the way in which people receive news and information, large dedicated teams of investigative journalists within traditional news organisations no longer seem affordable. However, this does not mean that important issues cannot be uncovered by journalists, either working alone or as part of smaller, flexible teams.

NEWSPAPERS

34. We have heard from witnesses about the economic pressures facing the national and local newspaper industry and the damaging impact which this has had on investigative journalism. Mr Alan Rusbridger, Editor of The Guardian, told us that: "From my point of view, the economic threat is easily the biggest threat [to investigative journalism]."[24] The Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt MP, agreed that the potential lack of profitability in the newspaper sector as a whole was the biggest threat to investigative journalism.[25]

35. Declining advertising revenues and circulation as a result of the economic recession and increasing competition from online sources, some of which exploit newspapers' content, and some of which are simply preferred destinations for advertising expenditure, have had a profound effect on the printed press. This was highlighted by Ofcom in September 2011[26] which found a significant and rapid decline in advertising spend in regional newspapers in recent years. As shown in Figure 2 below, the downwards trend can be observed before the recession, dating instead to 2004, when internet advertising increasingly began to compete with newspapers and television advertising.

FIGURE 3

Advertising spend—regional press (2005 constant prices £m)[27]

36. Paid-for local and national newspapers have also had to compete seriously with rival, free daily newspapers such as the Metro and The Evening Standard (which became free in 2010) and from local council newspapers which are circulated free of charge to residents in many local areas. We have heard evidence that there are some local free newspapers such as the Camden New Journal which provide useful information and expose issues in the public interest which are unlikely to be investigated by other titles.[28] These appear to be the exception rather than the rule. Other free local publications, however, have been accused of putting economic pressure on local newspaper advertising revenues without delivering much if any public interest journalism.

37. As a result of this combination of factors, the circulation of newspapers across the industry has fallen in recent years. ABC figures submitted to us by the DCMS in its evidence show that there has been a downward, "possibly accelerating" trend in total national newspaper circulation in the last decade, as shown in the table below.

TABLE 1

National newspaper circulation, 2001-2011[29]

Period	Total circulation (in millions)	Copies lost/gained (in thousands)	% change
Dec 01-May 02	27.15	-498.3	-1.8
Dec 02-May 03	27.19	38.9	0.1
Dec 03-May 04	26.62	-565.8	-2.1
Dec 04-May 05	25.03	-588	-2.2
Dec 05-May 06	25.15	-886.5	-3.4
Dec 06-May 07	24.32	-831.6	-3.3
Dec 07-May 08	23.58	-740.6	-3.1
Dec 08-May 09	22.04	-1,537.7	-6.5
Dec 09-May 10	20.80	-1.241.6	-5.0
Dec 10-May 11	19.53	-1,264.4	-6.1

38. At a Leveson inquiry seminar in late 2011, Clare Enders of Enders Analysis predicted that this trend would continue over the next 5 years, as shown in Figure 4 below.

FIGURE 4

Newspaper circulation volumes decline, 2005-2015 (as predicted by Enders Analysis)[30]

39. Newspapers have had to adapt their business models in order to adjust to these changes. Most newspapers, such as The Guardian, do not charge for access to their content online, which is supported by advertising, even though their print circulation is far below the number of unique monthly website users. By comparison, The Times and the Financial Times now provide their online content behind a paywall.

40. Printing newspapers is expensive. Figure 5 shows that towards half of a newspaper's operating expenses go on the costs of producing the physical newspaper, rather than on editorial activity. For this reason, we believe that as readers increasingly access news content online, printed newspapers are likely to become more expensive and will be more of a niche product and a relatively expensive luxury.

FIGURE 5

Newspaper cost structures[31]

41. As can be seen, taken as a whole, the newspaper industry is facing huge financial pressure. At a national level, there is now a crisis in the printed press which is facing unprecedented challenges.

42. At a local level, the economic pressures are even more severe. This has created a serious threat to investigative journalism and hence to democratic accountability in local areas. The threat to local media is also having a profound effect on national newspapers and broadcasters as local news outlets no longer provide a large training ground for the nationals and the ability for nationals to source stories from local news outlets—either post publication or pre-publication by sourcing stories from local 'stringers'—has significantly diminished. Mr Phil Hall, former editor of The News of the World, told us that: "There has been a real demise of the news agencies across Britain, because local newspapers used to feed off them and the agency fed off the local papers. As those have shrunk the newspapers have lost one of their main sources of information and understanding where investigations needed to be had."[32] Mr Andrew Gilligan, London Editor of The Sunday Telegraph, similarly explained that: "It used to be the case that virtually everyone on a national paper had come from a local newspaper. That is no longer the case; it is seldom the case, actually. It used to be the case that a lot of stories in national papers started in local papers, and that again is less the case than it was."[33] On the other hand, Mr Dominic Cooper, General Secretary, Chartered Institute of Journalists, told us that, "Very often, stories are broken on a local level before they hit national anyway."[34]

43. As outlined by Ofcom in its Local Media Assessment in September 2011: "the number of free weekly local and regional titles has been in long-term decline, while the number of daily, Sunday, paid-for weekly and free daily local and regional titles has remained fairly static."[35] This is illustrated in Figure 6 below:

FIGURE 6

Number of regional and local newspaper titles[36]

44. As we have heard from several witnesses, the local press is in great financial difficulty. John Mair, Senior Lecturer in Broadcast Journalism at Coventry University, said that: "Newspapers are dying. They are dying not so slowly. Local papers are in the intensive care ward."[37] Similarly, Mr Alan Rusbridger told us: "I just think that the state of the local newspaper industry is dire."[38]

45. We share the concerns raised about the seriously diminished level of investigative journalism at a local level. The evidence we have received leads us to conclude that economic pressures have severely restricted the local press's ability to carry out major investigations.

46. It is difficult to find reliable time-series data following the amount of investigative journalism in the printed press in order to be able to conduct a comprehensive analysis of whether the amount of investigative journalism has declined over the most recent decades. However, anecdotal evidence suggests that this is very much the case.

47. The impact of economic threats facing the newspaper industry was highlighted by the National Union of Journalists (NUJ) who stated that: "... the NUJ does fear that investigative journalism is under threat. It can be expensive, with a journalist or team of journalists spending a good deal of time pursuing a story which may not produce results. Because of its nature, which involves pitting itself against the vested interests of major companies with expensive lawyers, it can be risky and ultimately costly. The present economic climate, the growth of online journalism which had led to media operations providing free content, plus the rapid fall off of advertising revenue has meant a financial drain on all aspects of the media. At the NUJ we are seeing cuts to news budgets, mass redundancies of journalists and the merging, folding and closure of a vast number of regional and local titles."[39]

48. The lack of accountability as a result of the press no longer being able to carry out its role for financial reasons, particularly at a local level, weakens the democratic process. Newspaper proprietors, editors, journalists and others in the newspaper industry are working on new ways of addressing the current systemic lack of profitability in the industry including attempts to monetise their content online. Many of these ideas are at an early stage of development.

49. We urge the Government to recognise the financial problems facing newspapers and encourage them to think creatively about any tax breaks or other financial incentives which might help the industry through this difficult transitional stage.

BROADCASTING

50. As in the newspaper industry, investigative journalism can be important to a broadcaster's brand, but it can be relatively expensive to produce. Mr Roger Bolton, Presenter, BBC Radio 4's Feedback, and former Editor of Panorama and This Week, told us that an hour-long investigative programme might cost somewhere in the region of £80,000-£120,000 to produce.[40]He also told us, however, that the cost of the "cheapest drama, outside of EastEnders and so on, would be around £500,000. It could go up; for an hour, it could go much more than that".[41] Investigative journalism is therefore perhaps cheap to produce in relation to the cost of producing other forms of television programmes, but it is expensive in comparison to the cost of other forms of broadcast news provision.

51. It is difficult to know exactly how much each broadcaster spends on investigative programmes as this normally forms part of a broadcaster's overall budget for news and/or current affairs. Mr Ian Squires, Controller of Current Affairs and News Operations at ITV, said: "We spend more than £100 million every year, as a commercial broadcaster, on all of our journalism, news included, and we would not seek to differentiate between the sub-genres or the different techniques included in that."[42]

52. In 2010, the public service broadcasters spent a combined total of £307 million on news and current affairs output.[43] In the same year, the commercial multichannels spent a combined total of £99 million on news content (not including current affairs).[44]

53. Channel 4 wrote in evidence that its "investment in news and current affairs is substantial—amounting to £38 million in 2010, funding the flagship Channel 4 News, online news activity, and a wide range of current affairs programmes."[45] It continued that:

"Across the PSB system, the BBC is by far the biggest investor in news and current affairs, but ITV and Channel 5 also make valuable contributions to plurality. However, generally speaking news and current affairs programmes are unfortunately unable to turn a profit, and therefore need to be funded by other means to ensure they can continue to play their important democratic role. For example, Channel 4's investment in news and current affairs is supported by its cross-subsidy model—where advertising income from other Channel 4 activities which are more profitable funds content that delivers public value, but is less commercially focused."[46]

In its annual report for 2010, Channel 4 noted that it had decided to focus its budget for its flagship current affairs show, Dispatches, on "fewer, bigger films (from 38 first-run films in 2009 to 32 in 2010)." The broadcaster claimed that this had "enabled it to increase its investigative impact, with stories that regularly hit the headlines and shaped the news agenda".[47]

54. We have heard mixed views about whether the levels of investigative programming have improved or declined in recent years. Time-series data published by Ofcom shows that the number of hours of first-run originated productions in news and current affairs on the public service broadcasting channels has fallen slightly from 18,402 hours in 2006 to 18,013 hours in 2010.[48] It is not possible to break these figures down further to determine how the number of hours of investigative journalism in these programmes may have changed over this time.

55. It has been suggested to us that there has been a cultural change in the public service broadcasters away from serious investigative reporting, either by doing fewer investigative programmes (as in the case of ITV 1) or by "dumbing down" the content produced. Gavin MacFadyen, Visiting Professor, City University and Director, Centre for Investigative Journalism, claimed that: "It should be said that, for the last 20 years, investigative reporting, as I am sure everybody here knows, has been on major decline in Britain from what it was—major television programmes like World in Action, This Week and Panorama—to where we are now; we have nothing, really, that is comparable, or at least comparable with the depth and frequency that those programmes were."[49] Mr Peter Hill, a former investigative reporter for the BBC from the 1960s-1990s, wrote in evidence that:

"Although I see some admirable investigations on television today, conversation with the producers reveal very similar, even worse, problems to those I encountered in my career. In particular the funding for investigations is far worse than it was in the seventies. The problem also remains that senior executives do not understand investigative reporters and producers, nor the techniques they use—nor the legal and moral framework within which they must work."[50]

56. On the other hand, we heard from broadcasters that their levels of investigative reporting remain high, and in some cases, have increased in recent years. For example, the BBC wrote that it had adopted an approach of "fewer, bigger, better"[51] investigative programmes, and Channel 4 and ITV recently committed to increasing the number of investigative programmes which they produce. We were pleased to hear from Ian Squires of ITV's renewed commitment to investigative journalism through its new 'Exposure' series[52] and the continued investment in this genre from non-PSB channels such as Al Jazeera English[53] and Sky News.[54]

57. The BBC's flagship investigative programme is Panorama, a weekly series of investigative programmes which has been on air for over 50 years. The BBC wrote that: "Panorama's overall audience has risen from an average of 2.8m in 2009 to around 3m in 2011."[55] However, the BBC acknowledged that: "Not all investigations will bear fruit, but the BBC is able to afford to back programmes that may, in the end, not reach air. In contrast, the market is not always able to fund such output."[56]

58. We welcome the evidence given to us by commissioning editors from different broadcasting channels about their commitment to investigative programming. This should continue to remain a priority, particularly for public service broadcasting channels, despite the difficult economic circumstances currently facing the sector.

ONLINE CONTENT

59. In the early days of the internet, investigative content posted online was mainly derived from material which had previously been published either in a newspaper or on television or radio. This, however, has changed to a significant extent since many individuals now post material and, if they so wish, engage in a public conversation with a myriad of interlocutors. Access to such content is easy via search engines. Frequently, these contributors to the national and international debate are low cost, and in practice often outside the scope of any form of regulation or legal framework. This represents a revolution and poses a challenge in economic, legal, regulatory, consumer protection and political terms.

60. The ability of anyone to publish information online means that the publisher's traditional role has diminished as it is open to anyone to set up a website. In this instance, not only are the conventional powers of legal and regulatory control more or less bypassed, the influence of the publisher is no longer there to moderate, or if necessary, edit the content. All this can pose problems, particularly if the material is outside of the scope of the national legal or regulatory regimes. This makes it difficult for anyone damaged by a published untruth to take steps to ensure the offender restores their reputation and does not repeat the offence. Moreover, this is potentially very damaging to responsible investigative journalism because it becomes increasingly difficult for the public to distinguish between truthful and false claims published online, knowing there is little or nothing that can be done for anyone affected by the latter.

61. This issue is becoming increasingly important because of convergence. It is already the case that newspaper websites host video content and, with the increasing take-up of tablets, data-enabled mobile phones and internet-enabled televisions, the issue of whether it is appropriate, and if so, how to regulate integrated content online will become ever-more complicated.

62. At present material published by newspapers online falls under the remit of the Press Complaints Commission. Video and audio content which has previously been broadcast on a television channel or radio station and is then made available online falls within the remit of the Authority for Video On-Demand (ATVOD), Ofcom and/or the BBC Trust as appropriate. However, content outside these spheres such as blogs or other websites are not subject to any sector-specific regulation at all and may be entirely outside our national jurisdiction.

63. We note that Lord Justice Leveson and Lord Hunt of Wirral, together with the Government as part of its forthcoming Communications review, have confirmed that they will consider whether it may be appropriate to bring certain forms of online content, which currently fall outwith the scope of regulation, into the remit of the relevant regulatory body. This should continue to remain a priority. We look forward to their recommendations in this area and to their suggestions on how to put them into practice.

18 BBC Back

19 Q 541 Back

20 Communications Committee, 1st Report (2010-12): Regulation of Television Advertising, (HL Paper 99) Back

21 Ofcom Public Service Broadcasting Annual Review, July 2011, Source: Ofcom Media Tracker 2010. Base: A UK representative quota sample of approx. 2,100 adults (aged 16+). Back

22 Ofcom Discussion Document on Local and Regional Media in the UK, September 2009, Sources: Ofcom's Media Tracker, April 2009, Ofcom's Technology Tracker 2005-2009, Note: 2002-2008 based on rolled yearly data and is not directly comparable to 2009 data. Base: All UK adults aged 15+ (2009 n=1045). Back

23 DCMS Back

24 Q 57 Back

25 Q 684 Back

26 Ofcom Local Media Assessment on the proposed acquisition by Kent messenger Group of seven newspaper titles from Northcliffe Media, September 2011. Back

27 Ofcom Local Media Assessment on the proposed acquisition by Kent Messenger Group of seven newspaper titles from Northcliffe Media, September 2011. Source: Advertising Association/WARC Expenditure Report 2011. Back

28 Q 348 Back

29 DCMS, quoting ABC data Back