Reed Smith Client Alert

Type: Client Alerts

Reed Smith is releasing this client alert, as the deadline for submitted responses to the following DCMS recommendations is on 22 October – just one week away.

Executive Summary

On 30 July 2013, following recommendations from Lord Justice Leveson, the Department for Culture, Media & Sport (DCMS) issued a consultation on media ownership and plurality regarding newspapers, TV, radio and online platforms. The purpose of the consultation is to “question how media plurality should be measured”, identify the scope of the measurement framework, and ultimately “ensure that the media landscape isn’t dominated by too few organisations”. In particular, the DCMS is seeking submissions on which forms of media the measurement framework should include, which genres should be covered, which organisations and services should be included, whether the BBC should be included, and submissions regarding the audiences with which the framework should be concerned.

Background

How to measure media plurality has long been the subject of debate, and was one of the issues considered by Lord Justice Leveson as part of the inquiry into the culture, practice and ethics of the press. Currently, media plurality is protected by a number of rules and restrictions. For example, the “20/20 rule” prevents a person from holding a Channel 3 or Channel 5 licence if that person runs a national newspaper with an aggregate 20% or more of the total national market share. The rule is only concerned with newspapers and does not address the use of online news sources. Similarly, the secretary of state has the authority to intervene on public interest grounds in mergers between media companies that are being considered under the Enterprise Act 2002. For example, in January 2008, the secretary of state informed Sky, following its acquisition of a 17.9% shareholding in ITV, that it would have to divest its shareholding in ITV to below 7.5%, because he considered that its larger stake would operate contrary to public interest because of its adverse effects on competition.

The Facts and Figures

The table below sets out the reach of the top news channels across all platforms.

 News Channel

 Percentage of adults reached

 BBC One

 65% 

 IT

 37%

 Sky

 23%

 BBC News Worldwide

 22% 

 BBC News Channel

 22%

 The Sun

 16% 

 BBC Radio 4

 14%

Source: Department for Culture, Media & Sport – Media Ownership and Plurality Consultation 2013

In 2002, just 15% of adults used the Internet to regularly access the news, whilst in 2012 the figure had increased nearly three-fold to 41%. There has been a corresponding decline in newspaper circulation, with ABC (Audit Bureau of Circulations) reporting in April 2012 a 7.6% fall in daily newspaper circulation, in comparison with the same month in the previous year. Users still consider television to be the most important platform for news..

The Consultation

The consultation invites views on new ways to measure plurality, and in particular, responses to the following:

  • The types of media that the measurement framework should include. The document states that the current media ownership rules “only apply to newspapers, television and radio”, and that “they do not extend to other media organisations that only operate in the online sphere – such as the Huffington Post”. The consultation therefore asks:

Do you agree that online should be included within the scope of any new measurement framework?

  • The genres that the framework should cover. Whilst the current focus is on news and current affairs, an approach supported by Lord Leveson, this could be expanded in order to cover a wider cultural context such as drama, light entertainment and “reality” programmes. There is also a question mark around the extent to which social media should fall within the scope of the measurement framework. In this context, the consultation asks three questions:

What type of content is relevant to media plurality?

Do you believe that scope should be limited to news and current affairs, or be widened to consider a wider cultural context?

If so, how might a wider context be defined?

  • The types of organisations and services to which the framework should apply. The consultation considers all organisations that are involved in bringing content to the public. The document contains the following table, which provides a useful overview of the types of such organisations:    

 Role 

 Definition

 e.g. 

 Originator

 Gather news independently.  Retail supplier of news.

 Reuters, BBC

 Wholesaler

 Third-party news coordinated centrally for wider distribution.

 ITN

 Retailer

 Broadcaster

 TV, Radio - transmits messages audibly or visually, has editorial control.

 Sky, Channel 4

 Publisher

 Newspaper, website - publicly issues written information, has editorial control.

 The Guardian, The Mail Online

 Aggregator

 Consolidated source of third-party content.

 Google News

 Search Engine

 A website that allows the user to search for information available on the Internet, usually using key words.

 Google 

 Social Media

 The means of interaction among people in virtual communities and networks.

 Facebook, Twitter

 Source: Department for Culture, Media & Sport – Media Ownership and Plurality Consultation 2013

Whilst the traditional model saw publishers or broadcasters of news acquiring content either in-house (retail content) or from third parties (wholesale content), the rise of the Internet has disrupted the typical supply-chain model, with aggregators, search engines, and social media becoming more prominent features in the landscape. Therefore, the consultation asks:

What sorts of organisations and services are relevant to media plurality?

Do you believe that scope should be limited to publishers or include services that affect discoverability and accessibility?

  • The inclusion of the BBC. Both Ofcom and Lord Justice Leveson have stated that any new consideration of plurality must take account of the wide consumption of BBC news. However, others note that due to the BBC’s overriding requirement to be both independent and impartial, and given the numerous governmental controls placed on the BBC, it should fall outside of plurality regulations. Therefore, the consultation asks:

Do you agree that the BBC’s impact on plurality should be assessed as part of a plurality review?

  • The audiences with which the framework should be concerned. The consultation suggests that “[t]o provide a complete picture of the true extent of plurality across the UK, we consider that a measurement framework will need to take into account the specific circumstances of local media. This is important in terms of ensuring lively democratic debate in our local communities”. The paper argues that the amount, quality and type of information that people are able to and actively do access in local areas can differ hugely, and therefore asks:

Are there specific factors that you think a measurement framework needs to capture in order to provide a picture of plurality in local communities?

Do you agree that a measurement framework should also seek to assess the plurality of media serving other audiences or communities of interest? If so, which ones?

A full copy of the report can be found here. Comments must be submitted by 22 October 2013, and should be sent to either:

MediaPlurality@culture.gsi.gov.uk   
Or by post to:
DCMS Media Team
100 Parliament Street
London SW1A 2BQ

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Client Alert 2013-268