Tag Archives: Frances Cairncross

Arts, Britain, Culture, Government, Media, Society

Probe launched into online giants

CULTURE & MEDIA

GOOGLE and Facebook are facing two new probes into their “opaque” advertising business amid Government fears that they are making it impossible for online news publishers to survive.

. See also The demise of the printed press?

Culture Secretary Jeremy Wright said he had written to the Competition and Markets Authority (CMA), asking the watchdog to investigate the “digital advertising market” and see whether it prevents “fair competition”.

And he announced a formal probe by the Department for Digital, Culture, Media and Sport into how online advertising is regulated.

He also took aim at the BBC, calling on regulator OFCOM to consider opening a formal investigation into the size of its online news website. He asked the media watchdog to look at whether the broadcaster is “striking the right balance” between pushing its own content and driving traffic to commercial news websites.

The investigation comes after a damning report said online journalism is “at risk” because of the stranglehold the web giants have on the online advertising business.

The Cairncross Review, commissioned by the Prime Minister, and led by Dame Frances Cairncross, called for the CMA and OFCOM inquiries as it warned that Google and Facebook have become too powerful and too secretive.

At the moment, online news providers struggle to make ends meet because Google and Facebook hoover up so much of every pound spent on advertising on news websites.

The web giants keep their algorithms – the computer codes that dictate the order of search results – closely guarded secrets, but even the smallest changes can have a huge impact on the amount of traffic news websites receive and their ability to make money from their content. Google and Facebook control so much of the online advertising market that they can simply “impose terms on publishers”, Dame Frances said.

Mr Wright has now thrown his weight behind her report. In a Commons debate about the review, he said: “Online advertising represents a growing part of the economy and forms an important revenue stream for many publishers.

“But this burgeoning market is largely opaque and extremely complex, and therefore it is at present impossible to know whether the revenue shares received by news publishers are fair.”

He said the CMA probe would “examine whether the online marketplace . . . enables or prevents fair competition”.

Mr Wright added that his own department will conduct a review into “how online advertising is regulated”.

Some Conservative backbenchers have called for even more draconian measures. Former Tory leader Iain Duncan Smith said the social media giants need to be “broken up”. “This kind of monopoly cartel is damaging to people as individuals, and damaging to the functioning democratic society”, he said.

Sir Edward Leigh MP, said: “I think we’re being weak with these American tech giants . . . they are a monopolistic, anti-competition force in our society.”

In her review, Dame Frances said the web giants should have to sign up to a new code of conduct – overseen by a regulator – to ensure they deal with publishers fairly, and Google and Facebook should disclose how much of every pound spent on online advertising reaches the publisher.

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Arts, Britain, Culture, Government, Media, Society

The demise of the printed press?

CULTURE & MEDIA

JOURNALISM, whether in print or online, is in the grip of a crisis. Local newspapers are especially vulnerable, but the national press, too, is badly affected.

As a result of the inexorable rise of the internet, print circulation has fallen, in most cases dramatically. Most publishers have launched online newspapers, some of which have built up vast new readerships.

Yet, revenue streams have decreased significantly across the board. However successful some online news operations may be, they have been unable to make up the shortfall caused by the rapid decline in circulation of the printed press, which have traditionally enjoyed revenue from both advertising and print sales.

It has been against this background that Frances Cairncross was asked to write her report. Even in government, some are alarmed by the prospect that a weaker Press, whether national or local, will find it harder to fulfil its democratic role of holding the powerful to account.

As Dame Frances has noted, for example, there are already some towns where court proceedings, or the behaviour of unscrupulous and dodgy businessmen, are unexamined because the local newspaper has closed.

In analysing the huge problems being faced by the Press, this review – in terms of its understanding of the crisis and its causes – can scarcely be bettered. Dame Frances has brought to bear all her forensic skills as a distinguished former journalist.

She is acutely aware that publishers with reduced resources will be unable to undertake time-consuming and costly investigative journalism. It remains a fact that newspapers break many more important news stories than the habitually cautious BBC. What will happen if they are no longer able to?

One area within the review that doesn’t go far enough is in recommending curbs for the web giants – in particular Google and Facebook, although Dame Frances does put forward some proposals.

While traditional publishers struggle, these behemoths are laughing all the way to the bank. One of their obvious advantages is that they pay much less tax than established media companies.

But they also enjoy massive advantages in global and national advertising markets, which they increasingly dominate to the detriment of newspapers. Crucially, “programmatic advertising” which is sold through multiple intermediaries – many controlled by the all-powerful Google – operate via online auctions where they are sometimes both a buyer and a seller.

News is also filtered by Google and Facebook through the opaque use of algorithms that’s little understood in the wider world. An online publication may be discriminated against by these web giants – in other words, its website may effectively be censored or difficult to find.

And, of course, Google and Facebook refuse to pay for disseminating papers’ news coverage. While they make money out of this operation, publishers who bore the original cost of newsgathering get nothing. On all these tangled but vital issues, Dame Frances gives a mixed response. Unfortunately, she rejects the idea that publishers should be paid for having their stories recycled by the likes of Google and Facebook, on the grounds that such a process would be too complex.

To be fair, she does address the vexed subject of programmatic advertising by powerfully proposing that the Competition and Market Authority (CMA) should take a long-overdue look at it.

But as far as the algorithms are concerned, she suggests a pledge “might” be made by Facebook and Google “to give publishers early warning of changes to algorithms that may significantly affect the way in which their content is ranked”. That’s fine as far as it goes, but it’s not far enough.

Her report is also too indulgent of the BBC, whose publicly-funded, all-singing website is read by 43 per cent of the adult population every month. This inevitably undermines online newspapers and other publications. Dame Frances prevaricates on the issue by suggesting that media regulator OFCOM should consider it.

 

ONE worthy suggestion is that government subsidy of local and regional newspapers be increased. That sounds fine until one reflects that it’s far from ideal for newspapers to be dependent on the State, however benevolent the reasoning. Wouldn’t they benefit more if Google and Facebook and the other web giants were cut down to size?

And that really is the logical conclusion of this report. Despite what some may say, the future of the printed and online Press need not be one of contraction.

Decline is not a certainty. Newspapers can still have a successful and profitable future. But only if the Government has the courage and single-mindedness to stand up to these utterly unscrupulous and multinational tech giants.

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