Internet giants like Facebook and Twitter could cost the UK news industry around £450m in revenue by 2026, a new report has suggested.
Online “disruption” has cost the industry 46 per cent of its turnover in the last decade, according to estimates from OC&C Strategy Consultants.
And the traditional newspaper industry, covering both national and regional titles, is forecast to lose up to half a billion more, or 10 to 15 per cent, in the next decade.
OC&C’s report, “Is Content King?”, found that 41 per cent of UK millennials rely on social media or links from friends to find news articles, compared with eight per cent of over-55s.
And 39 per cent of the younger generation turn to a trusted brand for news and information, versus 67 per cent of the 55-pluses.
OC&C said that further cuts from British newspapers are “unlikely to be a radical enough strategy to offset this predicted loss in revenue, most of which will hit the bottom line directly”.
“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,” said Toby Chapman, associate partner at OC&C. “There are strategies that can be taken – by news and other industries vulnerable to the threat of online platforms – to avoid a similar fate.
He suggested as a solution that publishers need to promote their brands, work with the disrupters and “be smart about what customer data is – and isn’t! – shared with platforms in order to retain authority with advertisers”. Chapman added: “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.”
He also suggested that news publishers need to consider a “collaborative, industry wide response to the growth of platforms in order to retain control of their market”.
Chapman said Project Juno, a combined advertising effort being worked on by the main publishers, is a “positive signal”.