How tech giants are suffocating journalism
John McLellan/The Scotsman
The Cairncross Review highlighted how news organisations are losing advertising revenue as tech companies like Google, Apple and Facebook take a significant slice of the advertising market, writes John McLellan. Nothing to do with the Cambridge Spy Ring but everything to do with shedding light on the activities of Government, the Cairncross Review, published this week, marked a significant moment for the way in which democratic accountability of public services can be sustained. Dame Frances Cairncross isn’t exactly a household name, although her uncle John achieved notoriety as a Soviet double agent. But as a highly respected journalist, economist and academic (she chairs the Heriot Watt University Court), she was ideally placed to take a hard, brass-tacks look at the future of quality journalism in the UK. It won’t have been the talk of many dinner tables or bar-rooms, but for readers of this newspaper and many like it, the report should be of grave concern. In particular, her exposure of the fiendishly complicated, and in large part unintelligible, systems behind digital advertising show how the life-blood is being sucked out of news organisations around the world, not just in Britain. Digital advertising accounts for 63 per cent of all UK advertising, according to the eMarketing website, and PricewaterhouseCooper figures showed UK digital advertising in the first half of 2018 grew by 15 per cent to £6.3bn, with £3.3bn going to search engines alone. By contrast, the total advertising spending with UK news publishers in the whole of 2018, according to then Advertising Association, was expected to be around £1.8bn, a drop of five per cent. Starting with the tech giants like Google, Apple and Facebook, the Cairncross Review highlights the growing number of participants in the supply chain, each adding a complication and each taking a slice of the advertising cake, while the organisations which rely on those resources to fund the supply of information are slowly asphyxiated. Ironically, other tech giants like Amazon are also waking up to this murky bonanza and are looking at ways of cutting out as many middle-men as possible to, literally, deliver the goods more effectively. Finding solutions is another thing and, to some extent, that was beyond both her remit and resources so the Department of Culture Media and Sport, which commissioned the report, has quickly followed her recommendations for further investigations. Firstly the Competitions & Markets Authority is to look at the way digital advertising markets operate and secondly Ofcom is to examine the extent to which the BBC’s free online services impact on commercial news publishers. Both are long overdue but more immediately the recommendation that online subscriptions be VAT exempt, as are hard-copy newspaper and magazine sales, is now being put to the Treasury. If there is a criticism of the report, it is in its somewhat narrow definition of what represents quality journalism, and also the notion that public interest investigative journalism was ever a commodity which could stand on its own two feet. In separating sport and lifestyle, it glosses over the fact that successful broadsheet newspapers traded as much on what might be seen as sideshows as their political coverage. It was no coincidence that when the Daily Telegraph was in its pomp and outselling the Mail and Express in places like the West Country, it ran in-depth coverage of grass-roots club rugby and its Page Three court reporting was every bit as salacious as the News of the World.
Of course, as the former editor of this newspaper and the current director of the Scottish Newspaper Society, I can hardly be described as an impartial observer and I met with Dame Frances to discuss the Scottish industry and helped set up consultations in Scotland. So I could afford a wry smile when, in a report which made an impassioned case for the importance of quality journalism, with which I would hardly disagree, I found my name misspelled. We all make mistakes. We all make mistakes, Mr McVey Corrections and clarifications are part and parcel of news publishing now, but some readers of the Edinburgh Evening News may have missed an important one.
Nothing that fine paper had done wrong, but the clarification involved an article about Edinburgh’s £207m tram completion project and Lord Hardie’s ongoing inquiry into the disastrous project to build the current line from the airport.
The piece in Monday’s paper stated: “The council has engaged with the tram inquiry and the expert witnesses to make sure we cover any eventuality”, which prompted a response the next day on the Tram Inquiry website. “In a recent news article considering the business case for the Newhaven tram extension,” it said, “it was stated the Tram Inquiry has engaged with the Edinburgh City Council to make sure it ‘can cover every eventuality’. For the avoidance of doubt, the Edinburgh Tram Inquiry has had no discussions with Edinburgh City Council about the tram extension, or any eventuality in relation to it.” Oops. On Wednesday the clarification was duly re-published in the paper, so who could have got it so wrong? Step forward City Council leader Adam McVey whose original article it was, and who then had to tweet on Thursday afternoon that the council had “engaged with the tram inquiry by providing evidence and has monitored proceedings to capture evidence”. A clumsy phrase was to blame apparently, certainly not any willful intention to mislead the public into thinking the Council had actually spoken to the expert witnesses. We all make mistakes.
Peter Wood, a much-esteemed man
Three years ago, an important study was undertaken to quantify the full economic impact of the Scottish newspaper industry to underpin the case, particularly to government, that the news industry was about a lot more than just headlines. It was able to show the sector was worth over £1bn a year to the Scottish economy and supported over 4,000 full time jobs. The work was carried out by the widely respected economist Peter Wood, a man with the ability to cut through to the nub of both political and economic arguments and who had been an adviser to the UK Government and local authorities as well as private business. The esteem in which he was held was obvious from the number of people who packed Edinburgh’s Reid Memorial Church on Tuesday morning for his funeral after his sudden death a couple of weeks ago aged just 66, leaving wife Lindsay and daughters Rebecca and Paula. He was also a friend. I don’t think either of us were particularly religious, but God bless you, Peter.