A new report by the Public Interest News Foundation (PINF) has revealed that independent news publishers' reach and revenue are at odds.
Its Index of Independent News Publishing in the UK 2021 surveyed the operations and challenges of 56 small, British publishers (those with turnovers less than £2m) between February and March this year.
The gap between reach and revenue
On average, these 56 publishers together reach 10.1m users a month but last year they only generated £5.4m in revenue between them.
This is in stark contrast with the main regional UK news publishers, citing figures from Reach Plc (42.m users and £600.2m revenue) and JPI Media (14.8m users and £88.2m). Niche news is a hard market to crack and often the impact of their work is not felt in the financial returns.
Advertising revenue remains the top revenue generator at £1.8m (one third) of total income, despite how badly small publishers were hit during the pandemic because many local businesses slashed their advertising budgets.
The report warns this is a "dysfunctional" revenue source and their reliance on it is resulting in "little capacity to explore alternative business models."
A third of respondents said that equal access to funding and advertising contracts would help safeguard their future.
Unsurprisingly, independent news publishers work in small teams and on small budgets. Typical annual revenue amongst the 56 publishers was around £42k, with 40 per cent of respondents reporting less than £20k.
Many outfits are led by one- or two-person teams and rely on voluntary work, according to Clare Cook, co-author of the report and co-founder of the Media Innovation Studio at the University of Central Lancashire, speaking at the PINF report launch event.
However, more voluntary work does not bring more income and what these outlets need is paid expertise in their teams to capitalise on new opportunities.
New revenue opportunities
Reader revenue accounts for a sixth of total income for publishers. The best place to do that work is on social media, which has long been criticised for decimating digital advertising for news websites. The report recommends focusing on these digital opportunities.
"Where the direct benefit from big platforms is less felt through advertising returns, there is an indirect benefit from using social media to distribute content," says Cook.
Publishers with the highest revenues were embracing digital engagement strategies: three quarters of respondents used email newsletters and 16 per cent used webinars.
"We'll have to see post-covid whether this holds true but certainly engaging with your community is a positive thing to do towards your income."
There is also untapped potential in grant funding, as only a quarter of total revenue is coming through these channels. In the US, that figure is nearly double (47 per cent).
'Charitable status not realistic'
The US is also a leading model for philanthropic-funded public interest news. Few have championed calls for the UK to chart a similar path more than Dame Frances Cairncross, author of The Cairncross Review into the sustainable future for journalism.
Her report recommends giving a charitable status to public interest journalism outlets which would lead to tax breaks and be a catalyst for philanthropic funding. The UK government responded to the review and these recommendations by stating that existing business rates relief has been extended until 31 March 2025.
Cairncross's view now, speaking at the event, is that a blanket charitable status for UK publishers is not likely. Instead, a division strictly for independently owned news publishers is preferable because some local news providers (like Newsquest) have foreign parent companies. But she conceded that will be incredibly hard to get this passed into law.
Another recommendation comes back to her vision for an 'Arts Council for news'. This would see public and private funds (from the likes of Google and Facebook) channelled into an Institute for Public News as a 'centre of excellence' for research, partnerships and innovation to help quality online news prosper. The government rejected the proposal for the Institute.
Cairncross called on PINF to put together a group of MPs to create momentum from within Parliament. This would include those with constituencies that have seen their independent news publishers crumble.
"Local MPs [are] worried about not having somewhere to publish their speeches and words of wisdom, and it would be harder to gain exposure to the public [without independent news publishers]," says Cairncross. "They have a direct interest in protecting local publishers."
The report also calls on policymakers and philanthropists to "support initiatives to transfer learning from the US non-profit news sector to the UK independent news sector."
Want to receive journalism news and job updates straight to your phone? Subscribe to Journalism.co.uk on our Telegram jobs channel for the latest job opportunities, and our news channel for a weekly digest every Monday morning.
Free daily newsletter
- How AI can help journalists track MPs financial interests
- How MyLocal Lincolnshire and Ping! are innovating local media
- Newsrewired throwback: What you learned at our previous digital journalism conference
- 'Collaboration over competition' is the way forward for public interest media
- The Bristol Cable targets £60k of funding in new membership drive