UK newspapers account for 65% of investment in news provision, attracts about 25% of advertising

According to recent data from Ofcom and the Advertising Association, newspapers account for 65% of total investment in news provision in the UK, but draw only about 25% of total advertising spend. As audiences and advertisers continue to move from print to other platforms, this will drive a continued erosion of overall news provision in the UK.

The data on news provision comes from a report by Mediatique released by Ofcom June 19. The consulting company has been tasked with quantifying overall investment in news as part of a larger investigation into media plurality. One striking finding is that national and regional newspapers, even after years of declining revenues and often brutal cuts in newsrooms, continue to account for the majority of spending on news.

According to Mediatique’s estimate, the industry as a whole accounts for 65% of total news expenditure in the UK, £1,345 million–this is three times the combined news investment of the BBC, close to three times the combined news investment of all television broadcasters combined (counting BBC TV plus ITV, Channel 4, Channel 5, and Sky). The figure below is from the report and represents the distribution of total news investment in 2011.

Precise accounting is of course hard, and critics would be right to point out that the definition of news may be broader in the case of newspapers, where it includes all editorial content, from investigative reporting to the crosswords, than it is for TV where it focus on news and current affairs. But the overall impression, that newspapers provide the bulk of original news content, is broadly in line with what researchers have found in both the US and in Denmark in recent years.

The figure is striking–and chilling, in light of the newspaper industry’s continued commercial difficulties. Internet revenues are growing, as a mobile ones and a whole slew of side activities ranging from branded merchandise to guided tours, but the bulk of the industry’s income still comes from print sales and print advertising. And though overall advertising spend in the UK increased by 2.7% from 2010 to 2011, the latest data from the Advertising Association suggests that print newspapers drew less than a quarter of overall advertising expenditures in 2011, losing ground both in relative and absolute terms. Every year, this erosion of the commercial underpinnings of newspapers have consequences in the form of cutbacks and layoffs across the industry.

Will digital growth change this? The 25% figure above (still a significant £4 billion) does not include revenues from advertising on newspaper websites–but despite fifteen years of investment and pretty much non-stop growth in terms of traffic and time spent, few of them are making a profit, and none have made the kind of money being lost every year from the ongoing decline of print.

Take as an example the Daily Mail, arguably one of the most successful newspaper companies in the UK–from 2010 to 2011, the DMGT recorded 56% growth in internet advertising from its national newspaper websites (from about £12 million to £19 million). But its Associated Newspapers arm also recorded a five percent decline in print advertising, which fell by about £15 million to £286 million, more than twice what was gained online. A 14 percent growth in the print advertising of the free daily Metro alone accounted for an extra £10 million, more additional revenue than was delivered by the growth of the most popular newspaper website in the world…

As the print parts of the business continue to decline and digital only make up for parts of what’s lost, newspapers will have to continue to cut costs, including investments made in newsrooms. This means fewer journalists, less original news, and as always, we won’t know what we don’t know when things go uncovered.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s