Ofcom published its report on measuring media plurality on June 19th. It received little attention. The fierce battle triggered by its report on the News Corp bid to take full control of BSkyB still reverberates through the Leveson Inquiry hearings, but this report – as submitted to Leveson – is in a very different key.
I was sharply critical of the BSkyB document, listing a series of errors and questionable judgements. I also challenged the suggestion made in that document that there might be ad hoc discretionary interventions in the media market to protect plurality.
Ofcom has now fully backed away from this idea. It rejects (no doubt to the disappointment of Ed Miliband and the Daily Mail) the idea of fixed limits on newspaper circulation (“bright white lines”) as too rigid, recognising that the decline of total newspaper circulation is likely to lead to consolidation as a means of commercial sustainability. Fixed limits can also militate against innovation.
In terms of local news operations, Ofcom has already implemented abolition of cross-media ownership restrictions, on the basis that it is preferable to have one surviving competitor to the BBC than none.
In passing, Ofcom also rejects the Enders Analysis proposal to limit any one organisation to 15% of “total media revenues”. Defining relevant revenues is too difficult. How would you discipline non-UK companies? And how does a revenue-based approach help in the narrower tasks of measuring influence or ensuring diversity? We can confidently predict that no fixed limits on circulation or “media ownership” share will now be introduced.
Ofcom has also recognized that a permanent discretionary right to intervene to halt organic growth in share is too draconian a measure: leaving the market in a constant state of uncertainty, and undermining the core regulatory principles of proportionality, transparency, simplicity and practicability.
Having in its BSkyB report raised the prospect of an “exit trigger” (an intervention when a media player exits the market), Ofcom now lays that hare to rest. Such a trigger requires too much discretionary power, and implies constant market review: both undesirable.
Sheer impracticability must also have played a part in this judgement. If a loss-making news operation closes, what can be done anyway? Subsidise the loss-maker? Out of whose pocket? Doesn’t that penalise success? And if a closure increases the market shares of others, what follows?
This was always a dumb idea. The only “exit trigger” Ofcom now mentions is the prospective closure of either ITN or Sky News, unable to compete with the £430 million the BBC spends each year on news operations. As Ofcom acknowledges, there is nothing that government could do about either.
The only practical incentive government could offer BSkyB to keep funding the massive losses incurred by Sky News was within the context of the attempted purchase of BSkyB by News Corp. Indeed, given that the status of Sky News was the only obstacle to that transaction (before it fell apart), it is a lucky accident that Sky News has survived this long.
And as the funding of ITN by the three commercial terrestrial broadcasters (ITV, Channel 4 and Five) is already a trade-off for concessions granted to them, whose value is steadily diminishing, there is no action government could take to ensure ITN’s survival – top-slicing the licence fee is not on the agenda.
Ofcom has instead settled for what many of us urged: periodic reviews of the market, every 4-5 years, using criteria that concentrate on actual consumption (as measured by volume, reach and multi-sourcing). As until recently Ofcom anyway carried out a review of media ownership rules every 3 years (the last was in 2009), the “mouse” and “damp squib” verdicts on its efforts look understandable.
Actually, that would be unfair. When a regulator shows that it can learn from its mistakes, we should all feel comforted (as Luke 15:7 puts it, “there is more joy in heaven when a sinner repents...). A whole series of errors in the BSkyB review have now – even if unacknowledged – been conceded.
Ofcom now recognizes it should have included current affairs programmes in its BSkyB review (it said it would do, but failed).
It recommends that the definition of “media enterprise” in the relevant Act of Parliament needs to be amended, so as to embrace ITN (a gaping hole in its last report).
It now recognizes that the “value added by editorial control downstream” makes nonsense of its decision in the BSkyB review to allocate – in measuring share – 100% of the news consumption on Five and commercial radio to the wholesale supplier (Sky News).
It now recognizes that there is no actual measure currently for news consumption on radio (in the BSkyB review, it decided to treat the total reach of commercial radio as equivalent to commercial radio news reach: an indefensible assumption).
It now recognizes that “it is not meaningful to combine volume measures for different platforms”, though not quite conceding the error in its decision to treat minutes reading newspapers (more than half of whose content is nothing to do with news) as equivalent to watching TV news bulletins.
It now recognizes that the BBC cannot be excluded from the process of measuring media plurality, just because of its governance and its commitment to impartiality – such a commitment may be a safeguard, but cannot be a guarantee of impartiality, as there is still room to “influence the news agenda through the selection or omission of stories”.
Ofcom paints a startling picture of the BBC’s dominant position in news consumption. It is responsible for 74% of TV news hours, a “high but unquantifiable” proportion of radio news hours (at least 70%), and 46% of all page views in the top 50 online news providers. 57% of online news consumers use BBC online: the next highest placed providers are at 19% - and they are Facebook and Google (not Google News), suggesting that their reported score is not a pure news measure.
Given that previous Ofcom surveys have shown that these three media are judged by news consumers to be responsible for between 86% and 92% of their news consumption (with newspapers at between 8% and 14%), the BBC appears to have a share of the news consumption market of well over 60%.
According to specially commissioned research, Ofcom finds that three of the top five sources of TV news are BBC One, the BBC News channel and BBC online. In radio, the three at the top of the list are BBC Radio 4, Radio 2 and Radio 1. In terms of share of references (a different measure of influence), the BBC is the source identified for 56% of TV news stories, 69% of radio news stories and 29% of online news stories, giving a staggering total of 47% across all media.
Ofcom does not believe the BBC’s current position should trigger a plurality review in itself, but warns that the BBC Trust does not include the promotion of internal plurality as one of the BBC’s purposes. It also notes that the pressure for cost savings adds to the problems of centralised newsgathering and output, further reducing the scope for internal pluralism.
There is a coded warning that this state of affairs may not be sustainable: there is a “potential risk that people who rely primarily on the BBC for news [are] not being exposed to a sufficient diversity of perspectives, contributors, subjects or treatment of news stories”.
Ofcom also raises the question – but leaves the answer to Parliament – as to whether the famous 20/20 rule (which effectively excludes Murdoch from controlling more than 20% of ITV) any longer makes sense, given that the first of these “20”s (ownership of more than 20% of the national newspaper market) related to daily sales of 16 million newspapers when the clause was enacted, but now relates to daily sales below 9 million. Ofcom notes that normal competition rules have anyway precluded BSkyB from owning more than 5% of ITV: the “Murdoch rule” may just be a relic of 20-year-old legislation.
Perhaps at heart Ofcom recognizes the inherent difficulty of any media plurality regime. How can anyone “ensure” that “there is a diversity of viewpoints available and consumed across and within media enterprises”? How, as per the Communications Act of 2003, can Ofcom “secure the maintenance of a sufficient plurality of providers of different TV and radio services”? Define “sufficient”.
Ofcom itself says that the rationale for making ITV, Channel 4 and Five show an “appropriate amount of national and international news” is to “ensure a range of impartial news programmes is available which appeals to different audiences”: yet all those news programmes come from a single supplier: ITN.
The Ofcom report identifies share of consumption as a good proxy for measuring influence: but concedes that this might be mitigated by internal plurality (even the four Murdoch papers made three different recommendations as to how to vote in the 1997 and 2005 elections).
Ofcom’s job is half done. It has buried a series of bad ideas. It has indicated which metrics are most useful in at least trying to measure news consumption, and then placing shares of consumption within a more nuanced context, taking into account reach (where it can be measured), multi-sourcing and more elusive concepts such as impact and diversity, all within a framework of economic sustainability and rapid technological change. Now it needs to get together with media players and independent experts and thrash out some of the detail.
Its comments on the BBC are significant. It is fair to assume that Ed Richards, Ofcom’s CEO, recused himself from the final stages of completing this report, as he is a candidate to be the BBC’s Director-General. If the BBC Trust still appoints him, despite this shot across its bows, we can expect a serious reconsideration of how the BBC generates and presents its news in the course of the next Charter review. For that relief, much thanks.
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