Snoddy’s 2019 media preview

Clear all of the Brexit stuff out of the way and the fog begins to clear on the crystal ball, writes Raymond Snoddy as he looks at the year ahead in media

It is impossible to even begin thinking about the year ahead in the media without addressing the current political situation – and that is impossible to predict, at least for now.

You have to break it down into stages, votes taken, options closing with each one dependent on the one that has gone before, to even make a stab at a likely outcome.

First there is next week’s vote on Theresa May’s deal which will be heavily lost according to all conventional political analysis.

Then a no-deal Brexit yawns and with it a further fall in the value of the pound and the prospect of further American raids on UK media assets.

But there is no majority in the Commons for a no-deal departure from the EU so next up, either a postponement or even overturning of the Article 50 March 29 deadline. The more radical option would need the full support of Labour, which may not be forthcoming.

Should it happen and deadlock, or even paralysis set in, then, and only then, when everything else has fallen away, might Parliament accept a second referendum as the last option standing. It would be the only way, short of an unlikely general election, of escaping the quagmire and moving on to take what would be a final decision on Europe for a generation – one way or the other.

This would lead to six months of pandemonium and certainly might be good for newspaper readership but bad for just about everything else.

Assume a second referendum, and it’s less unlikely than it was even three months ago, and lots of wonderful entertainment will flow.

The greatest difficulty is likely to be faced by the “remainer” editor of the Daily Mail Geordie Greig who has gone for the middle way and hitched his wagon to the May deal. Where he goes after that without offending his Brexit readership even further is not easy to see.

Should there be a second referendum the Brexit press will presumably have to stick to their guns but without the help of £350 million on the bus, the Turkey card and, one would hope, without leave campaign electoral illegalities this time.

Clear all of the Brexit stuff out of the way – not an easy task – and the fog begins to clear on the crystal ball.

The international trends on the importance of both content and distribution would imply further media consolidation in the UK. With Sky gone other major players who earn most of their living in weak pounds could find themselves in the firing line – Virgin Media and BT to name just two.

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And then there is ITV, a sort of last man- or last woman- standing. Predictions about the takeover of ITV have been made for years and so far as is known publicly little has actually happened since Greg Dyke’s aborted putsch in 2004.

There will be a takeover of ITV one day – and maybe that day is fast approaching at last.

Certainly Bloomberg analysts believe that the combination of a weak pound and the attractions of ITV Studios will make ITV a takeover target this year.

That however is a piece of analysis, a judgment rather than a forecast.

You can also see further consolidation in the regional newspaper industry, not out of desire but necessity, and the herd has an obvious weak and injured member in danger of falling further and further behind.

The collapse of Johnston Press into administration, strangled by more than £200 million debt, will provide an opportunity for someone. It is a viable business at the operational level and that someone could turn out to American-owned Newsquest, which not only has a publishing structure already in place, but is that rare beast: a company committed to publishing rather than one searching desperately for the exit.

It’s easy to predict that the Cairncross review into the provision of high quality news will come up with firm recommendations – otherwise what was the point given the self-evident scale of the problem.

To make any sense at all there will have to be additional funds made available for local journalism through an expanded version of the BBC’s local reporter scheme that has provided 150 reporters for socially useful journalism.

The BBC can hardly be expected to provide more, given its £750 million dilemma on paying for free licence fees for the over 75s.

So it will have to be the social media that will have to support what they have most damaged.

Apart from voluntary contributions – problematical – the obvious funding mechanisms could include a tax on digital advertising, with traditional publishers excluded, or a social media revenue tax.

The danger is that whatever Cairncross recommends will be welcomed by the Government and then ignored in the swamps of Brexit.

Funding journalism may turn out to be a small skirmish for the social media compared with what they might face in 2019.

It has been best expressed by the Observer’s John Naughton who points out that the 15,000 monitors that Facebook has had to hire to try to weed extremist language and false facts – an impossible task – is already eating into their profits.

Employing thousands of people in the Philippines to “process Facebook’s waste” to enable a tiny elite in Silicon Valley to continue to become “insanely rich” is confirmation that Facebook, Naughton believes, is no longer a viable system.

Maybe the advertising industry will start to catch up with the implications of this reality in 2019.

Is there any sign of good news out there? If you look hard enough there are a few, however modest.

James Hewes, the chief executive of FIPP, the international magazine organisation, notes that in most markets print magazine advertising will continue to decline this year – “but there are signs that this is happening at a slower rate.”

Modest indeed, but a little better news comes from The Times and the Sunday Times.

Times Newspapers is in profit after subscriptions to The Times and Sunday Times passed half a million for the first time in the past 12 months.

However, in perhaps a better guide to the realities of the year ahead, the losses at News Group Newspapers, the parent group of Times Newspapers which includes The Sun and Wall Street Journal, rose from £58.8 million to £91 million.

The losses were boosted by £46.2 million in costs associated with claims made against the company over the voicemail hacking scandal.

And that we can surely believe will not be a recurring cost.

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