Simon Fox: BBC Online News Expansion Similar To Piracy

Simon Fox has likened the BBC’s online news coverage to internet piracy in a wide-ranging Stationers Annual Lecture on the power of print. The Reach Plc chief executive also discussed transforming to a digital future, trusted news media journalism and the continuing importance of print.

Discussing the Cairncross Review and the impact of the BBC’s online expansion Mr Fox said: “Building a profitable digital news business is not straightforward. Perhaps, the main challenge is that people expect their online news to be available for free.

“It took a while for the music industry to get hold of internet piracy but they did, thus enabling services like Spotify and iTunes to prosper. In news, it wasn’t piracy but rather the BBC, which expanded rapidly into publishing written news stories online and for free, thereby making it impossible for all but the most niche news publications to build a digital paid-for subscription business.

“I am a big supporter of the BBC but I am happy that one of the recommendations of the recent Cairncross report was to ask Ofcom to review whether the online content of the BBC has crept too far away from its Charter obligations and has lost the distinctiveness, relevancy, quality and trust which underpins these obligations.

“Given the difficulty of asking people to pay for news in the UK (indeed only seven per cent said they would be willing to do so in the latest Reuters survey), most news publishers have therefore adopted a strategy of building significant online scale and making money through digital advertising.

“Given that advertising money tends to flow to where people are spending their time, the digital advertising market has exploded in recent years and in 2018 was worth £12bn in the UK; that’s more than twice the amount spent on TV advertising.

Mr Fox praised the ability of digital to better understand reader engagement, but also highlighted digital platforms’ brand safety problems, he said: “Each month our digital brands reach 38m people in the UK and a similar number overseas. We have never had such a huge readership as we have now. It also enables us to create far more content, unrestricted by the constraints of a fixed pagination paper. In addition, digital enables us to expand beyond words and pictures into video, podcasts, email newsletters and social media story formats.

“…In print, reader feedback is restricted to the letters page. In digital we can have a real time and two-way dialogue with our readers. Digital also gives us access to a whole new toolbox for finding new stories by analyzing what’s happening on Twitter, Facebook and elsewhere.

“However, consumers are becoming worried about how their personal data is being used for commercial purposes and regulators are becoming increasingly concerned about the emergence of a small number of big players in digital markets.

“Digital advertisers want to ensure that their adverts appear in a brand safe environment, and as such will increasingly seek to advertise on trusted digital news brands rather than allowing their ads to appear randomly in the wild west of the world wide web.   

“I’m proud that at Reach we are making a successful digital transition. Last year we attracted over £100m of digital advertising to our news sites. That’s £100m we didn’t have a few years ago.”

Print remains an important part of Reach’s identity and output, Mr Fox said: “Just like Mark Twain, reports of its death have been grossly exaggerated. The biggest national stories in today’s news agenda still originate in print. When Boris Johnson wants to make an impact – which is most days really – he writes a letter or a column in the Daily Telegraph.

“…Every single day the power of print is evident and I’m hugely proud of that. It was very reassuring to see that in last year’s Edelman Trust barometer there has been a huge increase in trust in traditional media, reaching levels not seen since 2012.

“Millions of readers still enjoy the physicality of the printed newspaper. There is nothing like the serendipity of browsing through a paper and coming across a stunning photo, a witty political observation, an insightful opinion piece or a moving human interest story. Indeed, I believe that the newspaper still represents extraordinary value for money and as an industry we have undervalued and under-priced it for years.”   

In his concluding remarks, Mr Fox spoke about recent print successes and the mood shifting away from social media following recent safety issues on platforms such as Facebook and Instagram.

He concluded: “It seems that advertisers have realised that the pendulum may have swung too far towards digital advertising and needs to swing back towards traditional media such as print. In addition, public opinion and the legislative process is also finally catching up with some of the negative consequences of the digital world.

“The recent reports from Caincross, the DCMS Select Committee, and the Furman report in the UK; the Copyright directive going through the European Parliament and the huge fines being imposed on Facebook, Google and Apple for anti-trust, privacy and tax avoidance violations by the EU combined with the calls to break up ‘Big Tech’ from Senator Elizabeth Warren in the US, all point to tightening digital regulation across the globe.

“And the tragic suicide of Molly Russell, whose father blamed, in part, the images of self-harm she had seen on Instagram and the horrors of the New Zealand mosque atrocity, broadcast live on Facebook, feel like seminal moments in galvanising public opinion and political energy towards creating a more level playing field between the digital and physical worlds.

“At the same time as the mood shifts away from social media, there are great print success stories to be told. The Economist is seeing increases in print subscriptions. The Guardian has launched a new international weekly print publication. The Week and Week Junior were sold last year to Exponent for £166 million and we ourselves have made significant investments in print, buying the Regional titles of Local World in 2015 and the publishing assets of Northern & Shell in 2018.

“We recently opened a Sunday print edition of the Manchester Evening News. And print is increasingly attracting the Silicon Valley tech tycoons. Amazon chief Jeff Bezos owns The Washington Post, biotech entrepreneur Patrick Soon-Shiong bought the Los Angeles Times, and Alibaba boss Jack Ma purchased the South China Morning Post… Print may not have the power it had in the 18th Century, but don’t write it off just yet.”