BCD0003

Written evidence submitted by The News Media Association

1. Background

1.1.           The News Media Association (the “NMA”) is the voice of UK local, regional and national news media in all their print and digital forms - a £4 billion sector read by more than 47.4 million adults every month. Our members publish around 900 news media titles - from the Manchester Evening News, Kent Messenger, and the Monmouthshire Beacon to national titles including The Times, The Guardian, The Daily Telegraph and the Daily Mirror.

1.2.           The BBC has sought to close valued local radio services, which offer a genuinely unique service, to fund new investment and expansion of local written news in communities already well-served by commercial providers. The BBC has an understandable desire to keep up with consumer trends and habits as the market becomes increasingly digitised. Nevertheless, the BBC’s proposal is a serious competition concern, and an unnecessary use of taxpayers’ money given the existing offering from independent local titles. We, therefore, welcome the Public Accounts Committee’s consultation on BBC Digital, and ask that the BBC’s decision to divert funds into local written news instead of local radio is scrutinised.

2. Headline Issues with the BBC’s Proposals

2.1.           The BBC proposed expansion of their local news services would nearly double the volume of local news content from an already damaging baseline. This directly competes with news provided from commercial publishers, who already reach 89% of UK adults, across all demographics, in print and online.

2.2.           Online is an increasingly important channel for local publishers to reach their audience, deepen engagement, and drive revenues, as well as providing a vital avenue for local businesses to advertise.

2.3.           The BBC has failed to explain why such an investment of taxpayer resource is justifiable, especially coming as it is, from cuts to other highly valued services.

2.4.           Additionally, the BBC has singled out four local areas where they will provide a new dedicated ‘rail’ for local written news including Bradford, Sunderland, Peterborough and Wolverhampton. However, this is unnecessary given independent JICREG data that shows that commercial local news brands have a strong deduped total monthly brand reach in these areas:[1]

2.5.           We understand that the BBC also plans to make changes to prominence of local news via its website and app. They have not considered the impact of this change, or the cumulative impact of all changes they are intending across the BBC sites. Faster loading of BBC digital services due to taxpayer funded investment in technology and the ad-free sites is likely to confer greater prominence for BBC local news which will further exacerbate the anti-competitive influence of the BBC in the local news market.

2.6.           Search is an important source of traffic for commercial news publishers. The BBC already ranks highly within organic search results because of its size, loading speed and other characteristics. Expanding the volume of news content that the BBC produces will likely give further prominence to the BBC in search results, diverting valuable traffic away from local news publishers.

3. BBC Competition Concerns

3.1.           We acknowledge the BBC has a Charter commitment to serve local audiences, but the BBC plans to expand into local written news in competition with independent local news titles, rather than in partnership via the Local Democracy Reporting Scheme,[2] for example. This runs against the Cairncross Report’s recommendation for the BBC to “think more carefully about how its news provision can act as a complement, rather than a substitute, for private news provision.”[3]

3.2.           Local and regional titles consistently tell us that generating sustainable revenue in the current digital market is seriously complicated by the BBC’s vast provision of ad free online news, which presently knows few boundaries. Digital subscriptions are an important and growing revenue source for some news publishers – a more competitive BBC publishing a greater volume of local news acts as a future drag on consumer propensity to pay for local news, and thus publishers’ ability to develop subscription models.

3.3.           The Reuters Institute’s report, “Digital News Report 2022”,[4] when looking at the percentage of people who pay for news across the world, demonstrates the UK (at 9%) lags behind its European peers, with the sole exception of Croatia (8%); versus a European average of 15%. Indeed, the BBC’s plans to expand its ad and subscription free service further into local written news will not increase the UK’s already noticeably low number of consumers paying for news.

3.4.           Ofcom’s report, “News Consumption in the UK: 2022”,[5] evidenced that among those using websites or apps for news, the BBC overshadows its competitors. A clear indicator of its market dominance. The BBC’s website/app (62%) is moving close to doubling the numbers of users compared to its nearest competition in the news sphere, the tech giant Google (34%).[6] For “any local newspapers” (10%), the gap in competition becomes stark, and will likely worsen radically under the BBC’s proposals.

3.5.           Expanding further into local written news will also likely lead to an increase in the BBC duplicating stories from local news providers, an already rife practice. The BBC has claimed that they have a unique online local output in written news, but our analysis of their evidence demonstrates that the BBC frequently covers independent news stories hours after its original publication (we would be happy to provide you with this if helpful).

3.6.           Instead of proceeding with the damaging proposals, the BBC should work with the commercial sector – as they currently do via the Local News Partnership and the Local Democracy Reporting Service – to be a genuine partner in building a sustainable digital future for vital local news.

We are happy to arrange a meeting to discuss any of the above and to include representatives from NMA member publications who could talk in detail about the day-to-day challenges they face competing with the BBC and the practices it adopts.

January 2023

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