Media plurality

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

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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.

Blog, Comment, Media plurality, Media policy

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

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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.

Blog, Comment, European policy, Guest post, Media plurality, Media policy

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

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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.

Blog, European policy, Media plurality, Media policy, Submissions

Recommendations on plurality to the House of Lords Select Committee on Communications

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After wide-ranging discussion at a seminar at the University of Westminster involving leading figures in media policy, law and regulation, a group of academics reached agreement on a number of policy reforms. Our recommendations, set out below, were sent for consideration to the House of Lords select committee inquiry on media plurality, which is due to report in January 2014.

[A more detailed overview of the discussion is available to download here – PDF]

 

  • There should be periodic plurality reviews more often than those proposed by Ofcom.
  • The scope of media involved in such reviews – and in the current PI/merger regime – should be broadened and not tied to old technologies.
  • A sliding scale of market concentration (with soft rather than hard caps) should  be considered, with discretion to impose behavioural remedies on those with the largest share.
  • Parliament needs to set guidance on sufficiency, and on regulatory discretion.
  • Decision-making discretion on individual mergers or whether a PI inquiry has been triggered should be invested in an independent board/body rather than Secretary of State.
  • That might be a statutory Board of Ofcom, of equivalent status to the Content Board.
  • Data gaps in relation to measurement need to be addressed by Ofcom.
  • Plurality also needs financial support. Ideas might include some kind of consolidated fund, subject to contestable funding bids for media start-ups in local, regional areas.
  • New ideas for revenue-raising should also be considered, based on media subsidies and transfer of resources (within reason) from new technology companies which have benefited from the creativity/journalism of others.
  • Ways of harnessing BBC expertise should be sought without top-slicing the licence fee.

 

Steven Barnett, Professor of Communications, University of Westminster

Natalie Fenton, Professor of Communications, Goldsmiths, University of London

Tom Gibbons, Professor of Law, University of Manchester

Peter Humphreys, Professor of Politics, University of Manchester

Martin Moore, Director, Media Standards Trust

Horatio Mortimer, Consultant, Sovereign Strategy

Stewart Purvis, Professor of Journalism, City University London

Justin Schlosberg, Lecturer in Journalism and Media, Birkbeck, University of London

Damian Tambini, Director, LSE Media Policy Project

Judith Townend, Research Associate, University of Westminster

Lorna Woods, Professor of Law, University of Essex

Blog, Media plurality, Media Plurality series

Media Plurality Series: all the posts

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In the last few weeks we’ve been running a special series on media plurality with the LSE Media Policy Project. Here’s a list of the featured posts, from first to last. Please feel free to comment under the individual posts, and if you would like to contribute to the blog in the new year, please email j.townend@westminster.ac.uk.

 

Blog, Guest post, Media plurality, Media Plurality series

Media Plurality Series: Why is the EU not protecting plurality? – Mike Harris

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mikeharrisAs part of our joint series on media plurality with the LSE Media Policy Project, Mike Harris, head of advocacy at Index on Censorship, argues that action is urgently needed to protect pluralism in Europe.

Currently the EU does not have the legal competence to act in this area [media plurality] as part of its normal business. In practice, our role involves naming and shaming countries ad hoc, as issues arise. I am quite willing to continue to exercise that political pressure on Member States that risk violating our common values. But there’s merit in a more principled way forward

— Commission Vice President Neelie Kroes

Last week, Index on Censorship released its report ‘Time to step up: The EU and freedom of expression’ the first analysis of how the EU protects freedom of expression within the union but also externally in its near-neighbourhood and beyond. Attention was given to our call for the EU to do more to protect whistle-blowers after the failure of EU member states to give (or even consider to give) asylum to Edward Snowden, but the report also identified a number of significant challenges to media freedom within the European Union, in particular the growing problem of media ownership patterns that are reducing media plurality.

European plurality standards

The media in the EU is more concentrated than the media in North America even after taking into account population, geographical size and income. In fact, by global standards, media concentration in the EU is high indeed. This would perhaps be acceptable if the EU was merely a trading bloc, but it is isn’t. As the report reiterates, the EU is a broader project with a clear aspiration to protect and defend human rights.

This is a legal pre-requisite of membership and as the Treaty of Lisbon has made the EU Charter of Fundamental Rights legally binding, now an on-going commitment by member states. Every European Union member state has ratified the European Convention on Human Rights (ECHR); the International Covenant on Civil and Political Rights (ICCPR) and has committed to the Universal Declaration of Human Rights. Media plurality is an area the report argues where the European Commission has competency. Yet, the commission has until now left the promotion of media plurality up to member states. Now that this approach has been found wanting, the Commission is and needs to rethink its approach.

The Italian example

Italy is the most egregious example of an EU member state failing to protect media plurality. The famous Italian “anomaly” had the country’s then prime minister Silvio Berlusconi exerting influence over the state broadcaster (which in turn was mandated by law to carry his political party’s views) alongside his personal ownership of the country’s largest television private television and advertising companies. The Gasperri Law of 2004 that was supposed to prevent media concentration may according to the OSCE have helped to preserve them.

While the European Parliament condemned Berlusconi’s personal influence over nearly 80% of the Italian television media, the Commission did not respond until July 2010 where it acted to remove restrictions placed on Sky Italia that prevented the satellite broadcaster from moving into terrestrial television.

Concentration throughout Europe

Italy is not the only EU member state where media ownership patterns have undermined plurality. The Centre for Media Pluralism and Media Freedom demonstrated this year that strong media concentrations can be seen across the EU with large media groups holding ownership of a significant share of the domestic media in many member states. These media concentrations are significantly higher than the equivalent US figures.

mike index's tables

The internet was supposed to drive competition in the media market, yet the Centre found the most concentration was in the online market. The reduction of the cost for new entrants to enter the media market facilitated by the internet was supposed to improve media plurality. There is alternative evidence to suggest this is happening.

Those who read their news in print in the UK, on average read 1.26 different newspapers; those who read newspapers online read 3.46 news websites. On the other hand, the convergence of TV stations, online portals and newspapers may produce even bigger media corporations[1]. New entrants to the market such as VICE Magazine and the Huffington Post have sold significant shares of their business to existing media corporations.

This process has not gone unnoticed by the Commission, with the independent High Level Group on Media Freedom and Pluralism calling for digital intermediaries, including app stores, news aggregators, search engines and social networks, to be included in assessments of media plurality. The Reuters Institute is also concerned and has called for digital intermediaries to be required to “guarantee that no news content or supplier will be blocked or refused access”.

Match commitments with action

In a number of areas, the Index report has found the EU’s member states to be failing in their duty to protect freedom of expression adequately. Media plurality is one such area where a clear commitment by member states has not been matched by action from either the states themselves, or the European Commission. With increasing digital and media convergence, the role of the Commission will be crucial for the protection of media plurality. Unless the Commission is ready and prepared to act this convergence could have a significant impact on the range of opinions and views that European citizens are exposed to, with a chilling effect on freedom of expression in Europe. Italy may not be the anomaly in the near-future.

You can follow Mike on Twitter here: @mjrharris

[1] p.165, Lawrence Lessig, ‘Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity” (Penguin, 2004)

Blog, Comment, Guest post, Media plurality, Media Plurality series

Media Plurality Series: The impact of a 20% ownership cap is not so ‘minor’ – Rob Kenny

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Rob-KennyIn response to LSE Media Policy Project’s policy brief on modelling proposed media ownership limits [PDF], Rob Kenny of Communications Chambers counters one of the report’s conclusions and explains why he thinks such limits would have significant impact on the media market. This is the latest post in our joint series with the LSE Media Policy Project.

Last week Justin Schlosberg (of Birkbeck, University of London and the Media Reform Coalition) and I debated media plurality issues at an LSE event. We agreed (I think) on the objectives of media plurality, but had very different views on the merits and form of regulatory intervention.

At the event Justin presented a paper Modelling Media Ownership Limits. This paper contains much useful material, but I write now to question one of its conclusions.

The paper sets out various proposed media ownership caps to support plurality, and their likely impact. For brevity I will focus on the caps proposed by the Media Reform Coalition (MRC), which are typical. In brief, they are:

    • At a 15% share of a media market, behavioural remedies would be applied such as the appointment of an independent panel to oversee editorial policy
    • At a 20% market share, ownership limits would be applied to ensure no person or entity had a controlling stake in the media entity

Justin’s paper suggests that “the impact on markets [of these caps] would be relatively minor”. However, this seems a bold claim.

Selling off the Sun and the Mail?

Both the Mail and the Sun have shares of the national newspaper market of over 20%. Thus under the MRC’s rules, both these titles would need to be publicly floated as independent entities. It is not at all clear that there is much public demand for the shares of new newspaper companies, particularly ones that would have no ‘take over premium’, since they could never be acquired. Thus the value placed by the public markets on a new ‘Sun PLC’ or ‘Mail PLC’ might be well below its true value. Moreover, there would be the listing costs to be borne, and the future costs of being a public company. Ultimately these would all be costs borne by the current owner (since they would be factored into the initial sales price). The current owner would also face the loss of any synergies with the rest of the group, and the intangible costs of loss of control.

What would a rational owner do when faced with such a forced sale? Presumably seek to avoid it by bringing the title’s share down below the 20% mark – relatively easily done through a price increase (which would keep revenues flowing but reduce circulation). The result would be a further reduction in newspaper readership. Moreover, it would severely discourage any future investment in those titles that might once again increase their share, and trigger an enforce sale.

Nor do the problems end there – if the Sun and the Mail reduced their share, then someone else would gain it. The Mirror could easily find itself close to or above the 20% share mark, forcing it to be spun out, or potentially to reduce its own circulation to avoid that fate. There is a clear risk of a vicious circle, and at minimum an acceleration of the already alarming decline in newspaper circulation.

Putting Sky News out of business?

Serious though the implications for newspapers are from a ‘20% rule’, they are far from the most drastic consequences. Because of Sky’s provision of wholesale radio news, the paper suggests that Sky News would fail the 20% test. However, it is hard to imagine Sky News being viable as an independent company – it is substantially loss making. In such cases the paper allows that “an equity carve-out or the transferral of voting rights from shareholders to employees” would be appropriate. It is not clear what is meant by an equity carve out – who would be interested in owning any number of shares that had no prospect of paying dividends, but rather required constant subsidies?

Conceivably voting rights could be transferred to employees, but would this have any practical benefit? If a Sky News remained utterly dependent on its parent for financial support – and by extension, the employees remained dependent on the goodwill of the parent for their jobs – how much real editorial independence would they have? Indeed, why would we expect the parent to continue to support a loss making, uncontrolled entity? Ownership regulations could put Sky News’ life at stake.

Within wholesale TV news, ITN is close to a 20% share – a relatively small drop in BBC consumption or the disappearance of Sky News could push it over the threshold. Once again, there are real concerns whether an independent ITN would be viable as a public company. In 2012 it made a pre-tax profit of just £1.5m, which contrasts to its net liabilities of £60m – without the support of its parents, it could well be bankrupt.

Thus the rules proposed by MRC could jeopardise the future of some leading news providers, accelerate the decline of newspaper circulations and act as a major disincentive to investment. It is hard to reconcile these significant risks with a view that the rules’ impact would be “relatively minor”.

European policy, Media ownership, Media plurality, Media Plurality series

Media Plurality Series: The transparency of media ownership – Mark Thompson

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MT-pic-22In the next post in our Media Plurality Series curated together with the LSE Media Policy Project, Mark Thompson, of the Open Society Media Program, argues that an important first step toward media pluralism in Europe is better transparency of media ownership. 

Amid all the attention that scholars and activists have paid to media ownership over the years, the transparency of ownership has been neglected. This is odd, because the public availability of accurate and up-to-date information about ownership is – undeniably – an essential component of democratic and pluralist media systems. And anybody who has worked on media and journalism standards outside North America and north-western Europe is likely to have witnessed the problems that result when ownership is opaque.

Media regulators and ordinary citizens must have access to information about who owns what. It is impossible to take steps to address excessive media concentrations and conflicts of interest – or even to identify such problems – if owners cannot be identified. Public knowledge of owners’ identities helps to ensure that abuses of media power can be assessed, publicised, openly debated and perhaps even prevented. Transparency also ensures that people can be accurately informed about the interests and influences behind the news presented for their consumption, and that media markets can operate fairly and efficiently, especially towards new entrants.

The state of transparency in Europe

European organisations agree that transparency of media ownership is essential for media pluralism and democracy. This has been broadly recognised by the European Parliament, and by the European Commission’s High-level Group on Media Freedom and Pluralism. The OSCE Representative on Freedom of the Media has consistently urged member states to respect transparency of media ownership.

Above all, it has been recognised by the Council of Europe. Thomas Hammarberg, as the  Council’s Commissioner for Human Rights (2006-2012), concluded “there must be transparency of media ownership”. The Committee of Ministers has led the way in drawing attention to the importance of media ownership transparency and urging member states to “adopt any regulatory and financial measures called for in order to guarantee media transparency”.

Despite this recognition of the importance of the principle, no systematic research had been carried out before Access Info Europe (AIE) and the Open Society Media Program (OSMP) examined the availability of ownership information in 19 European countries, in 2012.[1]

We found that the public in most of these countries cannot obtain a detailed and comprehensive picture of who owns all media outlets. The data available does not make it possible to identify the ultimate or beneficial owners of media outlets. In nine countries it is impossible for the public to find out who the actual owners of the media are through media-specific reporting or company registers. In only six countries can the public access sufficient information from the media authority to establish who owns the broadcast media; for print and online media this is possible in just two countries.

In only four countries does the ownership information submitted to a company register allow identification of the owner for all types of company (publicly listed, limited company, etc.), but such requirements do not apply to owners of other kinds of media outlets. For the broadcast media, beneficial ownership is only required to be disclosed to the media authority in six countries and to the companies register in four countries.

What can be done?

This is clearly an unhealthy situation. AIE and OSMP have prepared a set of detailed recommendations for mandatory reporting requirements to disclose the entire ownership chain to a national media authority. This disclosure would allow the identification of beneficial and ultimate owners, back to natural persons. The information should be available to the public in an accessible format free of charge, and be published in a regularly updated and centralised database.

At the Council of Europe, the Steering Committee on Media and Information Society noted our research while the Parliamentary Assembly referenced it in a report on media freedom. The Committee of Ministers may yet be persuaded to issue a detailed declaration, pointing towards a clear international standard of media ownership transparency. This could then be used as leverage with member states and the European Union.

The wider context for this campaign is media pluralism, which is explicitly supported in the Charter of Fundamental Rights of the EU (Art. 11). Yet progress in Brussels is bound to be difficult, given the Commission’s extreme reluctance to legislate on media values and the certainty of push-back from powerful industry players against any meaningful disclosure regime. With elections to the European Parliament due in May, it may be harder still to make headway in 2014. The best opportunity may arise as and when the Audio-Visual Media Services Directive comes to be revised; without effective campaigns at national level, however, the opportunity will prove elusive.

More positively, this initiative coincides with an unprecedented global debate around company ownership transparency (commitments at the Open Government Partnership and the G8 are recent proof). Transparency of media ownership is an idea whose time has come.

[1] The countries are Austria, Azerbaijan, Bulgaria, Croatia, Cyprus, Georgia, Germany, Iceland, Italy, Latvia, Luxembourg, Macedonia, the Netherlands, Norway, Romania, Spain, Switzerland, Turkey and the UK, plus Morocco as the 20th country. Open Society Foundation, part of the Open Society Foundations, is a company limited by guarantee registered in England and Wales (company number 4571628) and a registered charity (charity number 1105069). Its registered office address is 7th Floor, Millbank Tower, 21-24 Millbank, London SW1P 4QP

Blog, European policy, Media plurality, Media Plurality series

Media Plurality Series: European level inertia is not justified – Petros Iosifidis

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In the next post in our Media Plurality Series curated together with the LSE Media Policy Project, Petros Iosifidis of City University London looks at developments at the European level and calls for action to set criteria for two kinds of measurement mechanisms. 

The rationale for public intervention on media ownership is twofold: to prevent excessive media concentration and the accumulation of power in the hands of a few, and to promote media pluralism (the presence of a number of different and independent voices) and diversity in the media (different political opinions and representations of culture within the media). It has long been argued that traditional conglomerates like News Corporation and Disney can endanger a pluralistic, competitive media system, but pluralism debates have gained momentum in recent years with the increasing power of ‘new’ global giants, such as Google, Facebook and Amazon. There has been a hot debate at the EU level as to whether there should be a Europe-wide intervention to curb the power of such media companies or whether this can be accomplished at the Member State level.

Previous action

During the 1980s and 1990s, following repeated requests by the European Parliament, the European Commission attempted to implement media ownership regulation across Europe. This was unsuccessful because no agreement could be reached on the unit of measuring media concentration and pluralism. In the 1990s, following the debate on media concentration at the European level (initiated by the EU 1992 Green Paper Pluralism and Media Concentration in the Internal Market), the view emerged that it was possible to measure ‘influence’ exerted by applying audience-based criteria (readership, audience reach, viewing or listenership share).

The argument was that while financial units (companies’ market share, shares of assets, value-added, sales, advertising revenue) are closer to the traditional systems of concentration measurement, which permit assessment of media market concentration or even the existence of a dominant position, audience-based methods might be more effective for the measurement of influence in the market-place.

More recently, the Independent Study on Indicators for Media Pluralism in the Member States – Towards a Risk-Based Approach (2009) split the concept of pluralism into three normative dimensions – political, cultural, and demographic pluralism – as well as three operational dimensions – pluralism of media ownership or control, pluralism of media types, and genres. While the study urges the application of the same analytical framework in all Member States to ensure comparability of results obtained, it is not a call for a harmonization of policies. Neelie Kroes, the current EU Commissioner in charge of media, established two advisory groups to examine concentration and pluralism: the High Level Group on Media Freedom and Pluralism and the Centre for Media Pluralism and Media Freedom. Both produced reports in 2013 calling for action to protect media pluralism and media freedom.

The first step: a common definition

The debate on media pluralism has been kept alive with the commissioning of independent studies and reviews, but there has been little sign of action. The prevailing notion is that pluralism can be tackled adequately at a Member State level, because a pan-Europe approach could jeopardise national press and broadcasting traditions that are often connected to specific political histories, cultures and language traditions.

There have been initiatives to establish some common European-wide ways of assessing media plurality, the most ambitious of which is probably the Commission’s efforts to implement a Media Pluralism Monitor. However, reaching agreements around the right methods of measuring media concentration and pluralism has proven to be problematic. The two different sets of methods illustrated above (audience and revenue -based) are said to correspond to two levels of measurement of concentration in the information market: the political/cultural or pluralism,  and the economic or concentration of resources. It is argued that audience-based methods are coherent with the cultural/political standpoint and that revenue-based methods are close to the traditional systems of concentration measurement. However, due to the close relationship between economic power and pluralism, audience figures could also measure market power.

In fact, audience-based measures are a form of market share measurement, which is a classic economic measurement. ‘Audience’ are the equivalent of measuring sales (that is, market share), which is a classic economic measure of power. Therefore, the distinction between economic measures and cultural/political measures is irrelevant. Both sets of media market measurement assess market power.

In the absence of a direct way of establishing ‘impact’, crude measures based on market power (criteria about market structure) are used instead. And what the audience and revenue-based methods are doing is in fact that – they evaluate market power. So, both sets of criteria should be used. Regulatory agencies should come up with clear measurement criteria in order to understand fully and eventually curb media power across Europe. After all, Europe-wide networks of regulators, such as EPRA (European Platform of Regulatory Authorities) and BEREC (Body of European Regulators for Electronic Communications), have their hands on data from both types of measures. Inertia is not justified as it will almost certainly result in further consolidation.

Petros Iosifidis, along with his co-editors, will be launching a new book series on Global Media Policy and Business at an afternoon event on 17 December, 2013 at City University London.

Blog, Media plurality, Media Plurality series

Media Plurality Series: Fixed ownership limits proposed for transparency and accountability – Justin Schlosberg

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Justin SchlosbergIn the second post of our media plurality series, co-hosted with the LSE Media Policy Project, Justin Schlosberg of Birkbeck, University of London discusses his latest research that examined civil society proposals for media plurality measures and models. He argues that such limits and thresholds could limit media power with minimal impact on the market.

What was exposed beyond any doubt at the Leveson Inquiry hearings was the scope of informal access to ministers enjoyed by major media groups, and their willingness to use those channels to ‘communicate’ regularly and intensely in the build up to plurality decisions. We now know that Jeremy Hunt at best misled Parliament about the personal contact he had with News Corp lobbyist Fred Michel in 2011, during the supposedly ‘transparent’ process of deliberation over News Corp’s bid to buy out BSkyB.  That was over and above the more substantive contact between his office and News Corp revealed to Leveson in a series of email exchanges. It is for this reason that the majority of civil society groups – and indeed the majority of the public – have come out strongly in favour of fixed ownership limits as a means of restoring transparency and accountability to plurality policy.

“Clear bright lines” are not “blunt instruments”

Ofcom – in line with commercial media interests – have suggested the opposite: that the power to decide when and how to act on plurality should instead remain with ministers. The arguments underpinning this view rest on a number of shaky assumptions. For one thing, it is often taken for granted that fixed ownership limits are ‘blunt instruments’: that they can unduly penalise groups who merely innovate or survive whilst leaving others untouched who are no less impacting on public conversation.

The sub-text here is that measures upon which ownership limits would be based (such as consumption or revenue metrics) cannot take account of contextual factors which can determine a media group’s ‘share of voice’ and may not be detectable through quantitative indicators of market share. What’s more, the argument goes, media markets are particularly dynamic and subject to rapid change which a static system of ownership limits would be ill-equipped to respond to.

These arguments fail to address the nuances of proposals for ownership limits, many of which stipulate lower and upper thresholds triggering a range of remedies according to specific circumstances and market conditions. My examination of six non-industry proposals[1] submitted to the Lords Select Committee on Communications inquiry into the issue found the following to be the most common:

A Possible consensual position based on most common positions in civil society responses

Civil society consensus table

The concept of ‘absolute limits’ is often assumed to denote a market share threshold at which companies would be forced to either divest or close down. But in fact, we can look at absolute or ‘ceiling’ limits in two distinct ways: an outright prohibition on any group or company that breaches the limit, or a prohibition on any controlling interest within a company that breaches the limit (Ofcom has already provided detailed guidance on how to determine a controlling interest in media companies).

If the latter framework is accepted for remedies in appropriate circumstances (i.e. where straightforward divestment would threaten the viability of a given title as a going concern), there is little basis on which to assert that fixed limits will act as deterrents to innovation of growth. And provided that any system of fixed limits is subject to regular periodic review, there is no reason why ‘clear bright lines’ in plurality policy cannot offer both flexibility and certainty so desired by the industry and Ofcom.

Read more →

Blog, Media plurality, Media Plurality series

Media Plurality Series: Is Ofcom’s ‘Share of References’ scheme fit for measuring media power? – Steven Barnett

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steven_barnettKicking off our joint media plurality series with the LSE Media Policy Project, University of Westminster’s Steven Barnett argues that the “share of references” method of measuring media power is not sufficient. 

At the heart of any discussion about plurality and media ownership lies the concept of power: for democracy to function properly, the exercise of power over public opinion, law-makers, opinion-formers and elite decision-makers must be properly distributed and not become concentrated in a small group of individuals or organisations.

Principles of media power

This essentially abstract notion of media power was implicitly addressed by the communications regulator Ofcom in its advice to the Culture Secretary on “Measuring media plurality” in June 2012. It defined plurality with reference to what it called “desired outcomes of a plural market” and suggested two overarching principles:

• Ensuring there is a diversity of viewpoints available and consumed across and within media enterprises.

• Preventing any one media owner or voice having too much influence over public opinion and the political agenda.

These principles were adopted by the government in its consultation on Media, Ownership and Plurality in July 2013 and are generally accepted as a sensible interpretation of the democratic underpinnings of media plurality. They encapsulate the notion of power – over dissemination of news and opinion as well as over hearts and minds – and provide the philosophical basis for intervention in the market to promote a healthy and dynamic democracy.

Measuring media power – Ofcom’s approach

In order to gauge the nature and proportionality of that intervention – at what level concentration becomes dangerous and raises issues of democratically unacceptable power – it is necessary to generate some objective and justiciable criteria. Not only is this important for abstract reasons around justice and fairness, it is also essential for providing clarity to commercial enterprises making vital investment, employment and expansion decisions.

In an era when media sectors were discrete, convergence did not exist and there was little or no cross-ownership, it was relatively easy to impose sectoral limits by audience consumption: traditionally (though not necessarily logically) share of TV viewing, share of newspaper circulation, and share of radio listening. With convergent technologies and cross-ownership now an established fact, we need some kind of “currency” which permits measurement across sectoral boundaries.

Only one such currency has so far been proposed: Ofcom’s “Share of References”. In its June 2012 advice to government, Ofcom elaborated on the Share of References scheme it had first employed for its public interest test of News Corp’s proposed takeover of BSkyB in 2010. That scheme has never really been interrogated as a satisfactory proxy for measuring media power, despite its potential drawbacks.

A full explanation of how the scheme works is contained in Ofcom’s news consumption report published in September 2013. Briefly, share of references is calculated by asking respondents in a representative survey which sources of news they use “nowadays”, and how frequently. Each mention is counted separately and the figures are aggregated, culminating in a share for each news provider expressed as a proportion of all references for all news sources. In Ofcom’s words: “This produces a cross-media metric with consistent methodology and a consistent definition of news across all platforms.”

Share of References: why it is problematic

While superficially offering a solution to the perennial conundrum of cross-media measurement, this metric suffers from one fundamental flaw: by focussing entirely on consumption, it is bound by default to exaggerate the role of television and, in doing so, to distort the true picture of how media power is distributed in the UK.

In pure consumption terms, television’s dominance is clear. According to Ofcom’s 2013 News Consumption report, when asked about their news sources nowadays, 78% said television, 40% newspapers, 35% radio and 32% the internet. This ratio is a wholly predictable function of television’s ubiquity and accessibility, and of course the average 28 hours of weekly viewing. But does that really equate to power?

In three important respects, I believe this metric overstates the power of broadcast media and understates the power of the printed word, whether in hard copy or online.

First, it takes no account of the power to persuade, or the opinion-forming impact of print and online media.  The significance of “impact” was recognised by Ofcom in its 2012 advice to government, and in particular the significant influence which could be exerted by print media’s partiality and its agenda-setting role. However, Ofcom’s ideas for possible measurement “proxies” – importance, impartiality and quality of news source – all favour the television medium despite being, by their own admission, imperfect substitutes.

Impassioned, one-sided argument is an integral and powerful element of a free press. Our national newspapers are highly partisan, and the popular press in particular often elides news and comment.  While we cannot measure to what extent such editorialising drives popular opinion, intuitively a one-sided, opinionated approach will carry more weight than a carefully balanced approach. And yet the power to exercise that passion and thus to influence hearts and minds is entirely absent from this calculation.

Second, it takes no account of the power to set news agendas. Rigorous research is lacking, but there is plenty of anecdotal evidence that our national press plays a hugely important role in driving news agendas. Broadcast newsrooms are usually immersed in mountains of newsprint, and informal conversations with BBC journalists reveal a high level of editorial anxiety when bulletins are not covering a story which has featured prominently in the press.

Then there are the newspaper reviews: twice each evening on Sky and BBC News channels, at the end of every edition of Newsnight, on Sunday morning’s Andrew Marr show, and frequently mentioned on the Daily Politics and the Today programme. Both Sky and the BBC tweet the front pages of next day’s national newspapers every evening.

Third, it takes no account of the power to influence policy makers – parliamentarians, think tankers, civil servants, regulators. In his 2013 book Democracy Under Attack, former Guardian journalist Malcolm Dean published a meticulously researched account of how this press-driven influence has operated in a number of social policy areas. Moreover, evidence to module 3 of the Leveson Inquiry provided abundant evidence of how unduly powerful media corporations exert pressure on politicians and their policy-making. Four successive prime ministers admitted, either implicitly or explicitly, that they were bound too closely to News Corporation and Rupert Murdoch. That kind of power cannot be measured through share of references.

The conclusion is straightforward, even if the ramifications are not. It is inherent in Ofcom’s approach that television’s penetration and popularity equates to power. But that is an assumption which is at best unproven and at worst seriously misleading. If we adopt their Share of References schema uncritically, we may miss dangerous concentrations of power elsewhere. We therefore need to find ways of assessing media power in a broader sense than this limited cross-metrics approach will allow.

This post is adapted from a presentation to the Westminster Media Forum seminar on media plurality, 27 November 2013.

Blog, Media plurality, Media Plurality series, Media policy

Launch of new media plurality blog series

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Since the publication of the Leveson Inquiry report just over a year ago, the formation of a new self-regulatory body for the press has dominated the policy debate about its implementation. However, Inquiry proceedings and the report’s recommendations also highlighted another important area for policy reform: the control and measurement of media plurality and ownership.

Although outside the limelight, policymakers have paid attention to Lord Justice Leveson’s suggestions in this area.  The Department for Culture, Media and Sport (DCMS) launched a media plurality consultation on 31 July and is expected to respond in the coming months. The House of Lords Select Committee on Communications also just finished hearing evidence in its inquiry on the same issue. The time seems ripe for a thorough debate leading to possible reform of media plurality policy, assuming the consultation and inquiry are not just going through the motions.

In the interest of opening up the debate beyond Whitehall and Parliament, the LSE Media Policy Project and the University of Westminster’s Media Power and Plurality project have teamed up to produce a special blog series on media plurality. The series of posts will be jointly curated by Sally Broughton Micova (LSE MPP) and Judith Townend (University of Westminster) and will appear on both blogs.

Media plurality policy is not just about ownership limits and concentration. Cross-media ownership rules and other competition based-policies are challenged by convergence within media industries. At the same time, changing audience and advertising patterns are threatening traditional business models.

In this series authors will cover issues such as the implications of convergence, options for stimulating plurality in the current environment, and the mechanisms with which to measure ownership and plurality.

There will also be discussion of some of the specific proposals that have been made to the inquiries, which are expected to report early next year.

The series has no set number of posts, and we would be happy to accept further contributions, so please feel free to get in touch with us at LSE MPP or the Westminster Media Power and Plurality project with your ideas. And, of course, you can join the debate in the comment section beneath the posts, or on Twitter: @LSEMediaPolicy and @mediaplurality.

Blog, Guest post, Media plurality, Regional and local

Dave Boyle: Addressing the decline of local media – a response to Theresa May

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Dave Boyle

It was a shame that in her recent intervention on the subject of local newspapers, Home Secretary Theresa May chose to use the opportunity to indulge in every government minister’s favourite sport of bashing the BBC.

In seeking to implicate the BBC in the decline of local media when speaking to the Society of Editors, she flattered her audience by avoiding the uncomfortable reality.

The BBC does, of course, have strong regional coverage, but this in no way can be said to be local in any meaningful sense of the word; if viewers and listeners and website readers are happy enough with what the BBC produces, then the real problem is that local media has been producing a fully-featured product for generations of people who would have been quite happy with the odd snippet.

It was a shame that May ignored the elephant in the room, because she has direct experience of it. In her remarks, she praised the Maidenhead Advertiser’s editorial freedom, but didn’t talk about its economic and strategic independence.

The paper, like others in the Bayliss group, were moved into a trust in 1962 by their founding family of owners, to ensure that they remained independent and locally focussed. They knew that they couldn’t rely on benevolent, wealthy people to guarantee the concern with local matters and undertook to make them unavailable for sale to anyone else.

Contrast that with the reality in the majority of the UK, where titles have been aggregated into 4 major groups, where decisions with serious impact on local community and civic life are made by people looking at spreadsheets hundreds of miles away for the benefit of people of shareholders thousands of miles away.

Papers merging content or merging titles, groups closing papers because they’ve squeezed all they can from them, editors being told to sack hundreds of journalists in the name of efficiency, whilst working those that remain ever harder with the resulting growth of churnalism. (The NUJ’s Chris Morley writes brilliantly about this here.)

If May wanted to give communities everywhere the kind of service that she and her constituents enjoy, she would do better to look to guarantee local ownership away from remote and distant groups and ensure it was in the hands of people who cared passionately about the ability of the local media to hold their councils and MPs to account.

One route would be the kind of ownership in trust enjoyed in Maidenhead (or The Guardian and Observer), But whilst that might protect a publication, it doesn’t enhance it, which is where community ownership would work much better, opening up the press to genuine engagement and control by local people (as well as helping the balance sheet by bringing new capital and revenue in the form of membership).

This is – slowly – happening, but Ministers who care about this can help by ensuring local communities get the chance to control the destiny of their local media by giving them a right to operate local media wherever the current owners wish to close or merge a title or reduce locally generated content below a certain level, or even better, a right to buy a paper if they can meet an agreed and independently verified fair price.

Both would do so much more than blaming the BBC, which is the equivalent of treating the very serious issue of ensuring journalism survives in local communities with leeches.

Dave Boyle is a researcher, writer and business consultant, who wrote Good News: A Co-operative Solution to the Media Crisis and organised the Carnegie UK Trust / Co-operatives UK programme ‘Make Your Local News Work‘. He blogs at daveboyle.net and on twitter as @theboyler.

This post originally appeared on the Media Reform Coalition website.

Blog, Event, International, Media plurality

Upcoming event: 8 November 2013 – Pluralism in the Age of Internet

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The Florence School of Regulation will be live-streaming its Special Workshop
‘Pluralism in the Age of Internet’ on 8 November 2013 at this link.

The full programme can be found here [PDF].

About the event:

Internet challenges the traditional notion of pluralism. The term “media pluralism” has been developed in a media environment that was characterized by the scarcity of the resources of the broadcasting market. Nowadays the media sector is experiencing radical transformations: scarcity is not an issue anymore; access to the Web is usually affordable and allows users/citizens to reach a world-wide audience; new intermediaries that are operating in the market give users more opportunities to express themselves. Nonetheless the impact of these changes still needs to be carefully assessed: media pluralism in the Internet should be addressed considering important issues such as access and content regulation, market dominance and concentration, filtering and gatekeeping.

The Special Workshop will discuss the meaning of “pluralism” in the Internet age. The debate will focus on access as a fundamental right, on the need of specific regulation for web content and for web operators.