UK Newspaper Industry Overly Reliant on Advertising

In a book published by academics at Oxford University it has been claimed that UK newspapers rely too heavily on income from advertising, which currently provides newspapers in the UK and in the USA with approximately 70 – 80% of their total revenue. This figure is far higher than Continental European equivalents in Scandinavia and Germany, whose national papers generate roughly 50% of revenue through advertising.

According to the study, “In many cases, the internet is not the main challenge facing the business of journalism”. Co-editors of the publication, David Levy and Rasmus Kleis Nielsen, believe that the current decline of the newspaper sector is indebted more to a series of poor financial decisions within the industry rather than to a usurpation of the sphere by online alternatives.

Furthermore, the lower rate of ad reliance is accompanied by a high level of online activity; in fact, the proportion of internet users in Germany and Finland is similar to that of the US. The research, commissioned by the Reuters Institute for the Study of Journalism, concluded that any correlation between internet usage and newspaper profitability is highly exaggerated.

To demonstrate this point, the authors of the book - The Changing Business of Journalism and It's Implications for Democracy - illustrate the more pronounced dip in newspaper consumption and profit in the US – where advertising revenue represents over 80% of newpaper income - in comparison with the German newspaper industry – where ad revenue plays a far less significant role in newspaper profitability.

The findings of the Oxford-based research team adds a new dimension to the current debate surrounding the future of the newspaper in an increasingly digitally focused age. While many are keen to express the theory that the rise of the internet and the free consumption of news content online signals the imminent decline of the printed word, this research shines a transformative light on the issue.

Also discussed within the publication is the relative success of state-sponsored journalism in comparison with the private run titles in the UK and the United States. Of course, this alternative does not sit well with many newspaper owners and media moguls, whose fear of the intervention of a higher power in the machinations of their businesses prevents their support for the expansion of such a BBC-esque structure throughout the journalistic domain.

Indeed, James Murdoch has previously revealed his thoughts on the expansion of any state-sponsored journalism. Citing the threat posed to the “plurality and independence of news provision, which are so important for our democracy” by state sponsored journalism, the heir to the Murdoch empire offers a somewhat ironic expression of his valiant motives in the media industry.

Co-editors Levy and Nielsen conclude that the focus herein must be the needs of a democratic and accessible news service, rather than the demands of journalists or businesses. They remind us that:

“While we must be pragmatic about the business of news, we must not lose sight of the righteous work in which we are engaged.”