- Online disruption has cost the UK news industry nearly half of its revenue (46%) in the last decade
- On top of this, a further £500 million could be diverted to platforms in the next ten years, amounting to 10-15% of the industry’s revenues
- 41% of UK millennials rely on social media or links shared by friends to find news content, according to research by OC&C Strategy Consultants.
As more young people choose to consume news through online platforms - like Google News, Apple News, Facebook and Twitter - the loss in digital subscriptions and advertising could cost the UK news industry half a billion pounds in the next ten years, according to research by OC&C Strategy Consultants.
Online platforms are all set to become more powerful in controlling the flow and consumption of news traffic, costing the traditional newspaper industry 10-15% in total revenues by 2026 based on analysis of the impact of platforms across multiple industries.
After years of cost cutting from household names in British newspapers and print revenues continuing to fall rapidly, further efficiencies are unlikely to be a radical enough strategy to offset this predicted loss in revenue, most of which will hit the bottom line directly.
According to OC&C Strategy Consultants’ “Is Content King After All?” report, which analyses the way consumers are interacting with platforms and media content across multiple counties and industries, 41% of UK millennials rely on social media or links from friends to find news articles, compared to just 8% of over 55s.
And the importance of brand identity continues to lose relevance with the younger generation, with just 39% of millennials turning to a trusted brand for news and information, compared to over two thirds (67%) of over 55s.
Toby Chapman, Associate Partner at OC&C Strategy Consultants, said,
“It’s already a familiar story in other industries such as music, and now the news industry looks next in line for platform disruption. The reaction of incumbent brands will be critical to what happens next. There are strategies that can be taken – by news and other industries vulnerable to the threat of online platforms - to avoid a similar fate.
“First, news publishers need to think hard about their brand. A strong and distinct editorial voice will be crucial to achieve cut through in the platform era. Second, publishers need to partner with, not work against, platforms to help them develop their news offer. As the traffic to platforms continues to grow and as they develop an increasingly important role in categorising and curating content, working with them will ensure content is used effectively. Third, publishers need to be smart about what customer data is – and isn’t! – shared with platforms in order to retain authority with advertisers. To do this, news publishers need to urgently build the technical capabilities to not only share and leverage data, but develop ways to sell advertising around their platform-based content as well.
“Most importantly, news publishers need to consider a collaborative, industry wide response to the growth of platforms in order to retain control of their market. It needs to happen fast, have broad industry support and, in order for it to work, focus on the consumer. Project Juno – announced a few weeks ago – is a positive signal that this dialogue is taking place.”
OC&C cite onthemarket.com as an example of an industry-driven intervention to platform disruption which has had mixed success. In order to challenge the duopoly of Rightmove and Zoopla in the property market, a consortium of UK estate agents launched onthemarket.com to give suppliers more control over costs, and give consumers a premium service. In onthemarket.com’s first year of running, Zoopla is estimated to have lost a quarter of its agents. However, since then the platform has encountered legal challenges and Zoopla has started to recover.
The OC&C Strategy Consultants’ “Is Content King After All?” report assesses the latest developments in the way people discover, experience and transact with news and other consumer media content online. The information is based on a major survey of c.10,000 people across several major countries.
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