The Government, responding to urgent approaches from Media Reform and others, has confirmed that the cost benefits available to those who sign up for regulation will be extended to all those news bloggers who are too small to sign up. This is a major victory for small publishers and for news pluralism which Media Reform welcomes.
Moreover, it has announced proposals for a workable turnover threshold to exempt small publishers from the burden of mandatory regulation. On Friday the Guardian reported that all three main parties had agreed to exempt ‘micro-businesses’ blogs from the Crime and Courts Bill, which defines cost penalties and exemplary damages for those who refuse to join a regulator.
But are they taking the right approach?
The new amendments can be read here and are now going back to the House of Lords, having been approved by the Commons on Monday. They add a special exemption for any “multi-author blog” publishing “news-related material” which operates as a ‘micro-business’ – defined as having both a turnover of less than £2m and fewer than 10 employees.
Extending cost benefits to everyone, whether or not they’re a “relevant publisher”, was a measure backed by 67% of the bloggers who responded to our consultation. It could be revolutionary for freedom of speech if small publishers end up joining a new regulator or forming their own, and we welcome it unreservedly.
But our response to the turnover proposals is more complicated. Make no mistake: any turnover threshold is better than no turnover threshold at all. As we’ve argued since March, there should be no legal route, however convoluted, by which small blogs can be punished for rejecting regulation. So let’s be clear that these amendments are a step forward.
Their high threshold, however, and their specific restriction to online ‘blogs’, pose problems. On the one hand there are good arguments for setting the bar high. In our meetings with the DCMS and other interested organisations, there was wide support for a high threshold because it would send small publishers an unambiguous message that it wasn’t intended for them. Given the uncertainties over the cost and terms of the new regulator – which may not be resolved for a year or two – this would provide much-needed confidence.
But the DCMS also made clear that they want everyone covered by the current PCC regime to also fall within the new regulator – including some small independent local newspapers which may themselves be ‘micro-businesses’. This is why the exemption is platform-specific and applies only to online content i.e. blogs. The problem with this is that it takes a very one-sided view of the crisis now crashing against the walls of the media industry.
Nobody really quite knows yet how we can make local journalism sustainable in the future – or how we can make it pay. Though public discourse usually frames the internet as an all-conquering game changer, we can’t discount the role of print. Some local news blogs are considering producing at least occasional print editions or ‘premium’ print asides, recognising that this can expand their reach and bring increased advertising revenue. This kind of innovation should be welcomed and supported, particularly in the 25% of local authority areas that now have no daily local newspaper at all. It would be foolish to prevent small publishers from experimenting with new business models.
But with a platform-specific threshold, a blog with a turnover of a few thousand pounds which produces a weekly free sheet could now be penalised for not joining the regulator, whereas a much bigger online-only news blog would not. We believe this is confusing, unfair, and will stifle innovation. It may also increase social exclusion as those who do not have access to the internet see local newspapers close and nothing in print emerges to replace them. Moreover, it may quickly become outdated if a new kind of platform takes over from the ‘blog’ as the pre-eminent means of online news provision.
Our position in the past has been that the threshold should be set much lower, at the VAT registration level (turnover of £77,000 a year), and apply to ‘news publishers’ on any platform. Print news companies get a VAT exemption – you don’t pay VAT on your newspaper – which is effectively a public subsidy worth £500m a year to the industry as a whole. We’ve argued that if this VAT exemption was extended to online-only news sources as well, there would be a strong, non-arbitrary justification for expecting all businesses which benefit from this subsidy to uphold standards and join a regulator.
Of course, turnover of £77,000 a year is still very small in business terms, and we proposed that membership should be very cheap or free for the smallest members. Again, there is good, non-arbitrary reasoning for this: the bigger you are, the bigger a public subsidy you receive and therefore the more you should be expected to subsidise other organisations’ membership of the regulator. Crucially, this would allow a cross-platform system of regulation to emerge in a way that was equitable and would still be meaningful in 10 years time when our news media landscape may look substantially different.
We do recognise that there are strong arguments for a higher threshold at this stage. The lack of moves to extend the VAT exemption to online-only news sources puts them at a disadvantage compared to print and breaks the symmetry of expecting high standards in return for public subsidy. In addition, although the Royal Charter does say that membership of the new regulator should be provided on different terms to different kinds of members, this is so contingent on future events and the precise attitude of the press when it forms the regulator that it may make more sense to include only those who will definitely be able to pay relatively high fees. However, a higher threshold has to be platform-specific in order to avoid exempting reasonably large independent local newspapers that probably should be expected to be members of a regulator, and therein lies the rub.
We anticipate that a platform-specific system will lead to problems in the future as the distinction between on and offline news provision becomes increasingly blurred. Whether or not the VAT registration threshold is the appropriate level at which to set the exemption – it may be that a multiple of it is preferable – we stand by our original proposal for a relatively low threshold that can then be applied to any ‘news publisher’, whether online or in print. For what it’s worth, the results of our survey reflected this [pdf] – only 36% liked or strongly liked proposals for a threshold over £250,000 – and 34% disliked or strongly disliked them.
Again, there are provisions in the C&C Bill about ‘fairness’ and ‘equitable’ expectations which would prevent judges from punishing small publishers. But as the entire media market turns itself upside down, what bloggers, small publishers and press innovators need more than anything else is absolute certainty that they’ll be free to try, succeed, and fail on their own terms – and claim the benefits and responsibilities of regulation only if they wish to.