Monthly Archives: January 2014

Steven Barnett: Murdoch and media power – déjà vu all over again?

This week saw the announcement of half-year results from BSkyB. There was a slight dent in its relentless profitability following recent competition from BT for Premier League rights, but very little deviation from the last full-year results: annual revenues of £7.2 billion with an annual operating profit of £1.3 billion. One and a third billion is an awful lot of spare cash to be generating each year.

That was precisely why Rupert Murdoch, who still owns just 39% of BSkyB, was desperate for his 2010 News Corp bid for the whole company to succeed, until it was finally derailed in July 2011 by the Milly Dowler phone hacking revelations and subsequent Leveson Inquiry. While in previous years his UK newspapers were the company cash cow, they have been increasingly overshadowed by the sports-driven pay TV business of Sky. Unfortunately for Murdoch, only 39% of that £1.3 billion belongs to him.

According to the Daily Telegraph, he may be lining up a new bid and “the move makes more strategic sense now than it did in 2010”. Any bid would now come from his new 21st Century Fox business, created when he split the film and TV business from his publishing interests (still called News Corp) in the wake of the phone-hacking scandal. But in media ownership terms, Murdoch chairs both companies and the end result would be no different from the highly profitable and enormously powerful conglomerate which was eventually sidelined in 2011.

There is in some circles an increasingly relaxed view of a new Murdoch bid: a sense that, with the emergence of global social media and online giants like Google, Facebook and Amazon, anxiety over an expanded Murdoch empire would be yesterday’s problem. This is misguided. A wholly Murdoch-owned BSkyB would still mean that a single media enterprise – and ultimately one individual – controlled over a third of national newspaper circulation (and their associated websites) in the UK and the only commercial 24 hour UK news channel – which in turn supplies the news for Channel Five and almost every commercial radio station in Britain.

Apart from the news plurality issue, a new takeover bid would raise other issues. A unified corporate culture can determine editorial direction across a range of media outputs beyond news, including drama and comedy. Moreover News Corp, like all media conglomerates, are adept at exploiting their media outlets to promote their own products and ignore or disparage those of their rivals. A wholly owned Sky will give Murdoch more leverage for cross-promotion across his empire, thereby entrenching his competitive advantage and further reducing the number of alternative voices.

And apart from influence over editorial content, there’s the scope for consolidating power by putting undue pressure on regulators. Sky has already shown a healthy appetite for expensive litigation, draining the resources of regulators and competitors. Allied with strident editorial assaults on Ofcom in News Corp newspapers, this can create formidable barriers to public interest interventions which reinforces an unfair competitive advantage in the battle for rights and talent.

All of these fears about the potential consequences for unhealthy dominance of the newly merged conglomerate were rehearsed in the months before the News Corp bid fell victim to the phone-hacking scandal. It was, however, on the verge of going through and the lengthy process exposed serious flaws in the UK’s regulatory regime around media plurality. As ministers and prime-ministers past and present explained during the Leveson hearings, politicians became too enmeshed in the Murdoch empire and were given too much discretion in determining the outcome of such bids. If a second bid is also to be thwarted – which the public interest surely demands – that plurality regime must be overhauled.

Next Tuesday sees publication of the long-awaited report by the influential House of Lords Communications committee on media plurality. It will, I hope, propose a number of recommendations for reforming the media plurality public interest test, which was a last minute addition to the 2003 Communications Act (courtesy of some nimble political footwork from David Puttnam in the House of Lords). Without it, the Murdoch takeover would have been waved through.

But now the plurality regime urgently needs updating to embrace a broader view of plurality and media power than just news. Moreover, a new framework needs to re-engineer the complicated sequence of interventions which currently can only start and end with the Secretary of State. If we have learnt anything from the phone-hacking scandal and the relationship between politicians and the press, it is that powerful press barons still command a deeply unhealthy genuflection from politicians in desperate search of a positive headline. It is the independent and competent regulator, Ofcom, which should be tasked with ensuring that the public interest is not sacrificed to political expedience.

Governments are not bound to accept the recommendations of select committees, and there is no guarantee that the Lords committee will propose sweeping changes. But without them it is quite likely not only that Murdoch will launch another bid for the Sky cash cow, but that this time he will succeed. The consequences for democracy of such undiluted media power being concentrated in the hands of a single individual are just as dire as they would have been three years ago.

A version of this post first appeared on the Huffington Post.

Philip Schlesinger & Alex Benchimol: The future of the Scottish press

By Professor Philip Schlesinger and Dr Alex Benchimol

In the run-up to the independence referendum on 18 September, Scotland’s newspaper press is facing a double challenge. First, can print journalism adapt to the digital revolution, given a continuing decline in newspaper sales? Second, can the press perform its civic role in contributing to an increasingly distinct democratic culture north of the Border?

Oddly, such questions have been largely neglected in recent debate about the media and Scottish independence. Of late, the focus has been on ideas set out in Scotland’s Future, the Scottish Government’s White Paper.

While this discusses culture, broadcasting and communications, it is prudently silent on the future of the press. A wise move, no doubt, after hostile media and political reactions to the ‘McLeveson’ report, commissioned by Alex Salmond and published in March 2013.

This report was widely seen as going further in proposing the regulation of the press and online journalism than anything that might be agreed, post-Leveson, south of the border and so the First Minister kicked it into the long grass. In fact, separate Scottish regulation is now effectively off the agenda.

As it happens, we don’t think that regulation is the fundamental issue for Scotland, although it’s the only issue concerning the press to attract political attention. It’s a truism that for anyone to regulate the press at all it first has to survive and flourish – and that really is not being as widely discussed as it ought. In a rare intervention, more than three years ago, a study by the Scottish Universities Insight Institute concluded that while there was a profound challenge of falling circulations and advertising migrating online, new media developments could also bring new opportunities for the press. That transition is still under way, and no major Scottish titles have yet disappeared.

Scotland’s press is certainly not unique in facing the impact of the online revolution. A key issue for newspapers everywhere is how to make their digital presence pay, as print sales continue to fall and advertising migrates online. That’s why in a 2011 Herald article, one of us called for a new business model for the Scottish press.

Can Scotland learn lessons from what’s happening elsewhere? To see how the press was faring in nations comparable to Scotland, at the University of Glasgow’s Centre for Cultural Policy Research we brought together leading national and international experts – academics, journalists, media executives and policymakers from Scotland and the wider UK, Denmark, Norway, Catalonia, the Basque Country and Quebec. In closed seminars, we discussed intensively what is happening to the press in other small nations and states as well as in Scotland.

The ensuing debate showed that at best the constitutional question is secondary to the strategies of those running the Scottish press. That’s because the fundamental issue of creating sustainable conditions for their enterprises dominates, regardless of whether Scotland is independent or not.

In fact, there was a consensus that in national regions in Europe and North America such as Catalonia, the Basque Country and Quebec, as in the rest of the UK, the need for new press business models and the need to attract new readers stand out as the most urgent issues facing their press systems. That’s because (as a recent Reuters Institute study has shown) there is an increasing divergence in how news is consumed across generations, with younger ‘digital natives’ increasingly moving to mobile devices like tablets — as well as using social media — to access news content.

The quest for a new balance between print and digital has enormous implications for the way that newsrooms are organized and how newspapers actually produce daily copy. There is also a new challenge to how news judgments are being made that is posed by the increased editorial use of live web analytics – information about real-time use of content. We are working on precisely this issue in current research at CCPR.

The overriding focus of our international discussion was on technology and economics with politics, surprisingly, playing second fiddle. What became quite clear was that each nation’s institutional history has affected the development of its press system. How each political culture has evolved has also influenced the extent of state intervention in subsidizing national press systems and the reasons that are deemed acceptable for doing so.

While explicit public subsidy to keep a wide range of titles in existence would be regarded as dangerous political interference with press freedom and plurality in the UK, in Norway it is simply taken for granted. There, it relates to both a strong sense of national identity developed over time and the wide geographical dispersal of the Norwegian population. Just think of how this contrasts with the UK press’s reception of Leveson’s proposals for press regulation last year.

It is also clear that national regions for which cultural identity is closely bound up with language have opted for state intervention. In Spain, leading national/regional newspapers like the Basque-language Berria and Catalan-language newspapers like El Periódico de Catalunya and El Punt Avui benefit from wider regional government subsidies to sustain these languages in the wider Spanish-speaking context.

In Scotland, this kind of subsidy is familiar in public service broadcasting, where government funds flow to BBC Alba to sustain Gaelic-language production. It would be unimaginable for such a policy to be applied to the press, however.

In each national press, digitization is re-shaping the economics and very identity of leading national newspapers, including La Presse in Quebec  and ARA in Catalonia. Sustained by substantial language communities, both have sought to implement aggressive digital strategies as a means of actively engaging with the new multi-platform media landscape. They have gone digital in ways as yet unthinkable in Scotland.

Taking a long view, technological and existential anxieties about the role of the Scottish periodical press are nothing new. After the Union of 1707, Scottish editors and publishers framed their ambitions in terms that resonate with the ‘double challenge’ facing Scotland’s national press today. How could they provide a dedicated focus for Scotland’s cultural ambitions and distinctive civil society in the face of fierce commercial and technological competition, then, as now, from the London press? How could they promote Scottish national interests in a new constitutional framework and global economic context?

In the first issue of The Glasgow Advertiser in 1783, editor John Mennons described his new venture as engaged ‘in the task of informing and instructing his fellow citizens’, from the perspective of ‘the foremost commercial city in Scotland’. Mennons projected the new venture as part of a wider civic and national effort to maximize both Glasgow’s and Scotland’s commercial potential during a period of economic transition, when the cessation of trade with America had constrained the wealth of Glasgow’s Tobacco Lords, making the kind of commercial and political intelligence available in Scottish newspapers like the Advertiser all the more relevant to the city’s and nation’s economic survival.

The key issues about the current state and future shape of the Scottish press—economic survival; technological adaptation; and the national interest—have been with us since the earliest years of Scotland’s national press. So has the question of how the press might sustain a distinctive national cultural identity in a British, European and global context. These issues will remain an urgent national challenge, regardless of the result of Scotland’s independence referendum on 18 September.

Philip Schlesinger is Professor in Cultural Policy and Dr Alex Benchimol is Senior Lecturer in English Literature at the University of Glasgow. The ‘Securing Scotland’s Voice’ seminars were supported by the Royal Society of Edinburgh. This post first appeared on Policy Scotland. Many thanks to the authors for allowing us to publish it here.

Upcoming event, 27 January – ProPublica’s Richard Tofel at University of Westminster

Richard Tofel, president of the New York based non-profit investigative organisation ProPublica will be addressing an audience at the University of Westminster tonight, 27 January at 18:30 [details here]. His question: How do you measure the impact of journalism in 2014?

According to organisers OneWorld:

This is a rare chance to see Tofel discuss how ProPublica, an independent non-profit newsroom funded by philanthropic funds, operates and how he measures the impact of ProPublica’s journalism. The event will include input from media and impact experts, followed by audience Q&A.

Richard Tofel’s talk will be based on his white paper: ‘Non-Profit Journalism: Issues Around Impact’ [PDF], which he also mentions in an interview with the Guardian:

In Tofel’s new world of philanthropic journalism – ProPublica receives about $12m a year from 3,000 donors – the demand for more sophisticated methods is becoming increasingly loud, in tune with a trend sweeping the whole philanthropic sector.

Full interview here.

The event ties in closely with one of the themes of our media plurality project: we have been have involved in discussions about the potential for charitable and non-profit journalism.

New platforms offer the potential for increasing plurality, but realistically require structural and financial support to be both viable and effective. We are looking at ways in which charity law might usefully be amended to offer some financial assistance to local and national initiatives. The Community Radio model, with financial assistance available according to strictly defined criteria relating to “social gain”, might provide a further useful model.

Government’s focus on measurement runs risk of neglecting crucial media plurality issues

Media coverage following Maria Miller’s appearance in front of the culture, media and sport select committee in December 2013 focused on press regulation, but she was also asked about the government’s progress on media plurality, in light of Lord Justice Leveson’s recommendations.

The Secretary of State’s comments, reproduced and highlighted in red below, indicate that the government is focusing on the development of a measurement framework and runs the risk of neglecting broader issues of media plurality.

In written evidence to the government’s consultation, Professor Steven Barnett raised his concern that while the consultation paper started with the broad-brush approach of the Leveson report, it then appeared to limit its scope to issues of measurement and consumption.

This focus does not allow for what the eminent American political scientist, Edwin Baker, called “communicative power”. While undue concentration of media ownership is certainly unwelcome because of its potential influence on diversity of news, information and ideas in a democracy, there are other potentially harmful consequences for democracy.

A measurement framework which is constructed purely around statistical models of consumption or “share of references” by definition takes little account of opinion-forming impacts of different media forms.

Furthermore, the government must look at the current policy regime around plurality – in particular, the Public Interest test – which we suggest is not fit for purpose.

These and other concerns are also addressed in our recommendations to the House of Lords select committee inquiry on media plurality.

Extract from oral evidence by Maria Miller, Secretary of State for Culture, Media and Sport to the Culture, Media and Sport committee, 18 December 2013:

Q49 Mr Bradshaw: Not quite. I had one other question on Leveson. What progress has your Department made in implementing Sir Brian’s recommendations on media plurality?

Maria Miller: Mr Bradshaw is absolutely right to say that media plurality was another aspect of Lord Justice Leveson’s report. A consultation on plurality closed on 22 October, and we are due to publish the consultation report early next year. I think that that will give us a foundation from which we can move forward on that really important issue.

…..

Q51 Chair: On Mr Bradshaw’s first question about media plurality, your communications and creative industries Minister said to the Lords Communications Committee that it is unlikely that there would be any legislative measures taken on media plurality in this Parliament. I take it you would agree with him on that.

Maria Miller: What we are focusing on, Chair, is the importance of understanding how we deal with media plurality in what is a very different and ever-changing environment. Our consultation has been seeking views on the scope of a measurement framework, and then, when we have got through that particular part of our deliberations, we intend to commission the development of a clear measurement framework and work that up in partnership with the industry.

This is a highly complex area which is, frankly, only getting more complicated, but at the heart of our approach is ensuring that British people have the ability to access a wide range of news and views, and information about the world in which they live. We believe that that plurality of information is at the heart of having a healthy and vibrant democracy.

Q52 Chair: From what you say, it sounds as if it is unlikely that it will be in the next Parliament either.  It is going to take a long time.

Maria Miller: Again, I think it is important that we get it right. I think the Committee would be urging us to get it right and it is certainly a complicated area.

 Chair: Let us move on to something completely different.

Alison Harcourt: EC should encourage transparency and co-ordination, not duplication & liberalisation

Media concentration continues to grow in Europe. Pressure from the European Parliament and NGOs prompted the European Commission to establish a High Level Group, which reported on media pluralism in early 2013. The Commission’s DG Connect then responded to the Group’s report with its own proposals. University of Exeter’s Alison Harcourt, a member of our media power and plurality research advisory board, points out the problems with these proposals and suggests the Commission focus rather on using soft policy initiatives to encourage transparency and co-ordination among existing stakeholders. This post originally appeared on the LSE Media Policy Project Blog and is reproduced here with thanks. 

Media concentration is recognised as a threat to democracy, freedom of speech and pluralist representation. However, media ownership restrictions have been replaced in EU states with competition law due to market pressure.

Pluralism remains a key consideration, as evidenced in competition decisions taken on the 2005 proposed takeover of ProSiebenSat by Axel Springer in Germany; the 2007 17.9% stake in ITV by BSkyB in the UK; the 2009 26% Communicorp stake in INM; and the 2011 proposed acquisition of BSkyB by News Corporation.

Interest groups, including some from the UK, are calling for EU action. A 2013 European Initiative for Media Pluralism, by over 100 civil society groups, called upon the EU for “legislative actions to stop big media and protect media pluralism in Europe”.

The arguments focus on: why continued statutory restrictions should remain in place to ensure pluralism of opinion, adequate political representation, and a citizen’s participation in a democratic society; why market forces alone cannot be trusted to deliver these democratic goals; and how increased technological delivery of media content is leading to the establishment of gateway monopolies.

But what form can EU action take? Article 151(4) of the Treaty is a weak instrument on which to base a Directive as its link to media pluralism is tenuous and it requires unanimity decision-making in the Council of Ministers. Article 11 of the Charter of Fundamental Rights of the European Union, which states that “The freedom and pluralism of the media shall be respected”, needs only to be respected under EU law and cannot be utilised as a basis for a Directive.

The European Commission’s proposals

In May 2013, the European Commission (EC) made 30 recommendations in response to the report of the High Level Group on Media Freedom and Pluralism on “A free and pluralistic media to sustain European democracy” and following a public consultation.

Condensed into 9 main categories these are to:

1) fund a European fundamental rights agency (EFRA) or independent monitoring centre to monitor the role of media freedom and pluralism;

2) set up a national audiovisual regulatory authority (NRA) network based upon the IRG to report directly to the European Commission;

3) recommend EU‐wide standards for media councils, journalistic practise and media literacy;

4) subsidise media content, in particular “increasing national coverage of EU affairs”, journalism scholarships, academic research, cross national media networks, and open access policies;

5) revise EU legislation on privacy and introduce libel restrictions at the EU (which would also cover the internet);

6) include media pluralism under competition rules at the EU level;

7) make a pluralist media environment a pre‐condition for EU membership and receipt of EU aid;

8) promote net neutrality;

9) mandate opt-outs to third party data transfer.

The problems with the EC’s proposals

Why are these proposals problematic? Rather than addressing media plurality, the proposals seek to support and promote the existing agenda of the European Commission:

1) an EU monitoring centre could repeat work of other organisations;

2) an NRA network would flank existing efforts by EPRA on best practise and information exchange but such a fora should not set the agenda;

3) there is no EU legal competence for media councils/journalistic practise. Media literacy is already funded under the EU’s lifelong learning programme;

4) promoting EU media coverage does not address problems of media concentration;

5) the 2012 proposed General Data Protection Regulation covers privacy and data protection; libel is protected by subsidiarity;

6) Article 21 (4) under the Merger Regulation protecting national media pluralism rules should not be transferred to the EU level but remain protected under subsidiarity;

7) market liberalisation in third countries does not address existing EU ownership problems;

8) net neutrality is covered under the EU Regulatory Framework;

9) third party data is being discussed under the Transatlantic Trade and Investment Partnership (TTIP) and does not address media ownership.

Transparency and soft policy co-ordination

What should the EC be doing? 1) it should identify and extend existing provisions protected under subsidiarity to cross-border broadcasting 2) it should increase requirements on transparency of media company reports and activities via application of existing EU company law 3) enable public availability of media monitoring via existing EU transparency provisions 4) establish soft policy coordination for safeguarding editorial independence and freedom of expression in collaboration with interest groups.

Specifically, the EU should build upon best practise and policy learning under stakeholder governance. Soft policies can and should be initiated under the “media pluralism” clause of the 2008 Audiovisual Services Directive to be implemented by the Contact Committee in cooperation with EPRA and third sector groups.

Ownership monitoring and recommendations on editorial independence and freedom of expression can be made in conjunction with third sector actors without the need for the establishment of an EFRA. Information should be exchanged amongst the EC, NRAs and the third sector.

Provision of a publically accessible database for monitoring media ownership can be made available through third sector groups listed in the EU’s joint Transparency registry. Resources should be pooled and links made between existing databases such as the KEK’s database on German companies (e.g. detailing ProSiebenSat1′s ownership in the Cayman Islands) and OpenCorporate’s online database and made available in French and English.

Finally the EC could co-ordinate the identification of national best practices, such as the non-media-specific transparency requirements under the UK 2006 Companies Act (Section 854) and the Austria’s Open Government Data Portal, for application on a European-wide basis under the EU’s 2004 Transparency Directive and 2007 Transparency Recommendations.