Funding journalism in the future 'must be a priority' for government
In revolutionising access to information, the internet severely disrupted the business model of journalism. This is of critical concern because well-resourced, quality journalism is a vital component of a democratic society. It may not always be perfect, but journalism does inform the public and hold power to account.
Essentially, the funding crisis in journalism emerges from three overlapping trends: the public’s unwillingness to pay for online news, the low rate of return for online advertising, and the growing power of online technology companies. Results from the second , the largest ongoing study of news consumption in the world, highlight the extent of the difficulties facing news publishers.
Results from the second Oxford Reuters Digital News Report (Ireland), the largest ongoing study of news consumption in the world, highlight the extent of the difficulties facing news publishers.
Although the Irish public are keenly interested in news - 84 per cent assess some news every day - 71 per cent are unwilling to pay for online news. Among those who do currently pay for news, almost half pay less than €50 a year.
Undoubtedly, the widespread availability of free news in the global English-language market influences people’s willingness to pay. All English-speaking countries surveyed for the Reuters Digital News Report have low rates of paying for news.
Undoubtedly, the widespread availability of free news in the global English-language market influences people’s willingness to pay. All English-speaking countries surveyed for the Reuters Digital News Report have low rates of paying for news.
With so few people willing to pay for news, advertising is a key alternative revenue source. But this fragmented market is also beset with problems. Online advertising generates far less revenue than traditional offline advertising and many people find adverts on news sites intrusive.
While some 42 per cent of consumers are willing to view adverts in return for free access to news, this attitude is largely negated by the growth of ad blocking software. Ireland has the highest level of ad blocker penetration among English-speaking nations and more than half of 18-24s in Ireland use some form of ad blocker. Evidence suggests that people rarely go back once they have installed an ad blocker.
Ireland has the highest level of ad blocker penetration among English-speaking nations and more than half of 18-24s in Ireland use some form of ad blocker. Evidence suggests that people rarely go back once they have installed an ad blocker.
In this scenario, news publishers may push further into social media platforms where ad blockers have limited impact. Of course, this also means that publishers will become even more dependent on a small set of online technology companies.
These companies can change their algorithms at any time and they attract the majority of new online advertising revenue. In the US, Brian Nowak, a Morgan Stanley analyst, notes that 85 cents of every new dollar spent in online advertising goes to Google or Facebook.
To a large extent, publishers are already dependent on social media. More than half of Irish consumers now get their news from social media. Convenience is a major factor as the ubiquity of smartphones goes hand in hand with easy access to social media apps. In essence, news publishers are left at sea in a market they used to control.
They no longer control distribution or readers’ access to content and they cannot control advertising.
So what options are available to publishers? Paywalls limit access unless the reader pays. This strategy can work well for special interest publications, such as the Wall Street Journal or the Irish Farmer’s Journal, because readers have a good reason to pay for articles they cannot get elsewhere.
The wisdom of a paywall is not as obvious for general news publishers. After all, if one publication restricts access to the latest news, the same content is freely available elsewhere. And if they restrict access altogether, web traffic decreases, fewer people share articles, and the hoped for monetisation of that traffic disappears. Publishers that deny access to people using ad-blocker risk a similar fate.
Native advertising, or advertising disguised as a news article, has attracted much attention within industry. Such adverts have been a major feature of magazines and lifestyle supplements for decades. The willingness of quality publications to integrate native advertising into serious news content is a new development and one that risks undermining the credibility of journalism.
The willingness of quality publications to integrate native advertising into serious news content is a new development and one that risks undermining the credibility of journalism.
In some countries, particularly non-English-speaking ones, publishers experiment with crowd-funding. In the US, and to lesser extent the UK, philanthropy is a major source of funding for investigative journalism. Neither of these appear workable models for a small English-speaking nation like Ireland – at least not on the scale required for a vibrant national fourth estate.
Neither of these appear workable models for a small English-speaking nation like Ireland – at least not on the scale required for a vibrant national fourth estate.
Currently, much of the discussion about the future of journalism takes place within industry, academic and regulatory spaces. But the issue is one of public importance from the local to the national level.
As global corporations, Google and Facebook have little reason to be concerned with investigative journalism and reporting in Ireland. How to fund Irish journalism is not a pressing question for US corporations. It is a question for the Irish public – for those who pay and those who won’t pay – and it is a priority for the new Minister of Communications.
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