The UK Media Influence Matrix Final Report is Published Today

At the end of one year of research  the final Media Influence Matrix: United Kingdom Report is being published today. The report provides a comprehensive and timely overview of the UK media landscape with a particular emphasis on the key institutions shaping the regulatory environment, the funding and consumption of news, and the impact of big tech on the production and consumption of journalism. 

Read and download the full report here.

Executive Summary Media Influence Matrix: United Kingdom

The UK media is probably one of the most researched media systems in the world, for reasons both positive and negative. From offering a model for high-quality 'public service broadcasting' to the phone hacking scandal, which raised issues of privacy, corporate malpractice and professional standards, the UK's media is fertile ground for media scholars. This present report contributes to this wealth of knowledge with a thorough, in-depth analysis of the three areas that shape journalism in the UK:

• Government, legislation and media policy, with a focus on the regulatory environment and the media policy-making process.
• Journalism funding and consumption, with a focus on changing news consumption habits and the role played by an evolving mix of funding sources.
• Technology, journalism and government, with a focus on how government is planning to regulate the big internet platforms and how news publishers are trying to reshape their relationships with those same platforms.

The study has three chapters that followed the methodology developed by the Center for Media, Data, and Society's Media Influence Matrix Project. A detailed methodology and the source list are available online here.

Government, Legislation and Media Policy

There are three areas of regulation discussed in the report, covering broadcasting, the press, and online. In the UK, as in most countries, broadcasting is historically the most tightly regulated platform whereas the press and online have been largely unregulated. Over the course of the 2010s, Parliament's attention has shifted away from regulating the press, on which it was focused in the aftermath of the phone hacking scandal and the Leveson Inquiry, and increasingly towards regulating the online space. Waging a long war of attrition, the press has now successfully halted the momentum behind more robust and independent regulation of its output. Meanwhile, the internet is almost totally unregulated in the UK and Parliament has, overall, been very slow even to comprehend the nature of the online world, let alone to consider seriously the question of how, or whether, it should be regulated. That debate is now underway in earnest, with the press – ironically – one of the leading voices for robust regulation of the big tech platforms, to prevent a proliferating list of 'online harms' for which the platforms are seen as culpable.
The government is planning to tighten 'official secrets' laws, while public rights to 'freedom of information' – access to information held by public bodies – have been steadily eroded in recent years. Both of these moves towards greater state secrecy need to be opposed and reversed. Other areas of law, like data protection, that were once decided at the EU level are now, post-Brexit, set to be determined at Westminster, although for the time being the UK appears to intend to maintain its alignment with the EU GDPR.

The report shows that media policy in the UK is driven by the Department for Digital, Culture Media and Sport (DCMS). Within Parliament, two committees have some influence on media policy: the House of Commons the Digital, Culture, Media and Sport Committee and the House of Lords the Communications and Digital Committee. The work of the Commons and Lords select committees on disinformation, online harms, and the tech platforms has occurred in the context of developing concern globally, about a variety of harms occurring on digital platforms. The current UK government intends to legislate in this area. Both Parliamentary committees are seeking to play a role in shaping the eventual legislation. However, our research shows that the most important influence over media policy in the UK is outside Parliament: the national press has successfully managed to resist Parliament's attempt to regulate it, boycotting the system Parliament established after the Leveson Report. At the same time, much of the right-wing press continues to incite government attacks on the BBC's funding and independence under the banner of a 'culture war' against the liberal-left. The press is also arguably the key force responsible for exposing and publicizing stories of 'online harms' attributable to the big tech platforms: stories that have set much of the media policy agenda for the last five years.

The question of internet regulation raises many issues that the UK Parliament and policymakers are only beginning to address: the protection of data and privacy online; the regulation of social media and other platforms to prevent 'online harms'; the protection of freedom of expression online; the possibility of a sustainable future for commercially-funded journalism online despite an online advertising market in which tech giants seem unassailably dominant.

Journalism Funding and Consumption

Funding for journalism in the UK comes from two main sources: the government and the market. There is only a tiny niche for independent, non-profit journalism, which – with the notable exception of The Guardian – is funded largely by a small pool of grant money. Public funding for news in the UK comes in two main forms: revenue generated by the TV License Fee, which funds the BBC; a small, indirect subsidy for news publishers through zero VAT rating on newspapers, journals, periodicals, and magazines. Market funding still comes largely from advertising, which currently stands at almost double the amount of income generated by subscriptions to news media, despite the vertiginous collapse of print newspaper advertising revenue since the mid-2000s. Philanthropy is not a major source of funding for the UK's news media, except for The Guardian, a non-profit which now relies heavily on reader donations to break even. A small number of independent, niche organizations have developed over the last decade, but these operate mostly as local outlets in major cities outside London.

The development of the internet in the UK has created big challenges for news media funding, primarily for newspaper publishers seeking to turn newspaper businesses, which were once highly profitable, into online news operations which have so far proved much less profitable. Broadcasters have been much less negatively affected by the rise of the internet than the newspaper industry, but since around 2016 they too have begun to face a major digital challenge. Theirs has come less from the big tech platforms than from major American streaming services like Netflix, Amazon and Disney, who can afford to produce big-budget entertainment content that is increasingly drawing young audiences in particular ways from traditional live TV viewing and UK broadcasters. Radio in the UK is still dominated by the publicly funded BBC, whose national stations account for more than 44% of total listening time compared to the 21.1% share achieved by national commercial radio stations. The UK press remains highly competitive but increasingly financially challenged: News UK, the UK subsidiary of Rupert Murdoch's News Corp, is the biggest national news publisher in the UK, yet has suffered financial losses in recent years. The local press is in a state of total collapse, without a business model capable of funding much more than low-quality 'clickbait'.

The most pressing issue identified in this chapter is the continued commercial decline of the press and its impact on both the employment of journalists and the production of original news in the UK – especially in less 'commercial', more 'public interest' news genres like local news, foreign reporting and investigative journalism. Meanwhile, the stagnation of the BBC's funding – a deliberate result of government policy – has done further damage to news production in the UK.

Technology, Journalism and Government

Despite a substantial and growing tech sector, the dominant platforms in the UK for many key digital activities like search, social media, communication, and audio-visual media are those of American tech giants, especially Google and Facebook. The online advertising market is also dominated by the two tech giants, with Google accounting for over 90% of search advertising revenue and Facebook taking a share of 50% of online display advertising revenue. Between them, these two firms account for around 80% of online advertising revenue in the UK. The UK's broadcasters are an important presence online through video-on-demand platforms like the BBC's iPlayer and Channel 4's All4. But even in this area, American free and paid video streaming platforms like YouTube, Netflix, Amazon Prime Video, and Disney+ are increasingly challenging the long-established cultural centrality of the UK's main broadcasters.

The American tech giants' dominance in many areas of online activity in the UK generates them billions of pounds a year in revenue, but this stands in stark contrast to the minimal amounts of tax they paid to the UK exchequer. This discrepancy has often been a focus of media attention, public anger, and political inquiry. It it just another way that the tech giants enjoy a number of powerful advantages over news publishers, an unequal relationship which publishers have only in the last few years started to work consistently to rebalance.

The UK's news publishers strongly support the development of a new pro-competition regime for digital markets, which the government is currently developing, and which the publishers believe will help them 'level the playing field' with the tech giants, at least to some extent. But it is unlikely that the regime eventually established will, on its own, lead to much more revenue for news publishers. The problem of the commercial sustainability of journalism in the UK – particularly at the local level – will remain. Attempts to develop new business models, most centred much less on advertising and much more on subscription revenue, will have to continue.

What are the Issues to Follow in the Future?

The current Conservative government, led by the Prime Minister Boris Johnson, has four main priorities in its agenda for media and technology policy. First, the promotion of economic growth through investment in high-speed broadband infrastructure and promotion of the UK's tech sector. Second, regulating the online world by creating a new regulatory regime to govern the practices of the big tech platforms and prevent 'online harms', and by reforming the anti-trust regime to promote competition in digital markets. Third, increasing government secrecy by toughening the penalties for unauthorized disclosures of government information by whistleblowers and journalists, and by undermining the public's right to request disclosure of government information. Fourth, fighting a 'culture war' with what it sees as its liberal and left-wing enemies in a range of public institutions, by threatening the BBC's funding and attempts to undermine its independence, proposing to privatize Channel 4 (the UK's other public-owned broadcaster), and using its power of appointment over a wide range of public institutions – including the UK's media regulator Ofcom, the two publicly owned broadcasters, and cultural institutions like museums and galleries – to appoint more right-wing figures, whose politics are more acceptable to the current government, to leadership positions. Support for Brexit has come to serve as a basic litmus test of acceptability.

Of these four agenda items, the first is innocuous – though the government has had to scale back its ambitions for rapid broadband rollout after cutting planned infrastructure investment in response to the fiscal impact of the pandemic. The second starts from a reasonable place: clearly tech platforms are creating a whole host of new issues, including some serious 'online harms', that require attention. The question is whether the UK government's legislative proposals are sufficiently coherent, comprehensive, effective, and proportionate response to fully address these issues without harming freedom of expression online. The third and fourth parts of the government's agenda are simple authoritarianism. But there is an important difference between them: increasing government secrecy is opposed by most of the UK's news media, whereas the government's 'culture war' agenda is actively incited and applauded by the UK's right-wing newspaper publishers, whose titles have become even more truculently reactionary and nationalist in the last five years since the UK voted to leave the EU.

Meanwhile, nothing in the government's agenda for media and technology policy adequately addresses the two biggest issues facing the UK media over the next decade. First, the continuing commercial collapse of the UK's newspaper publishers, with its knock-on effects on journalism employment and original news production. Second, the decline of the UK's 'public service broadcasting' system – encompassing not only publicly-owned broadcasters like the BBC and Channel 4, but 'commercial PSBs' like ITV required to produce public service programming and adhere to high broadcasting standards – as video viewing in the UK comes increasingly to be dominated by US platforms and entertainment giants like YouTube, Netflix, Amazon, Disney and now possibly Apple. Neither of these trends looks good for the long-term health of the UK's media and culture. Yet the government is doing nothing to address either issue. Indeed, its attacks on the BBC and Channel 4 look set only to accelerate their decline into cultural irrelevance and marginality. The government's obsession with conducting a 'culture war' against liberalism and the left will only cause further damage to public media and cultural institutions that have already been withered by years of government-imposed austerity.

Leo Watkins is a Media and Communications PhD student at Goldsmiths, University of London, researching Rupert Murdoch and the rise of neoliberalism in Britain in the 1970s and 1980s. He previously worked as an analyst at a commercial research firm specializing in technology, media and telecoms, and contributed research to the Parliamentary campaign to persuade UK regulators to stop Rupert Murdoch’s company 21st Century Fox buying Sky plc. He is on the co-ordinating committee of the Media Reform Coalition.