Background
1.1
In December 2017, the Australian Competition and Consumer Commission (ACCC) was directed to consider the impact of online search engines, social media and digital content aggregators on competition in the media and advertising services markets.
1.2
The ACCC tabled its final report in July 2019 making 23 recommendations, most directed at enhancing competition, improving consumer protection, ensuring privacy and undertaking media regulation reform.
1.3
Some recommendations were targeted at regional Australia, including a new program of direct grants and the development of a voluntary code to address bargaining power imbalances between parties. The Government responded to the recommendations of the report in December 2019.
1.4
Since then, the emergence of COVID-19 has magnified the important role of credible and up-to-date news and there has been an increase in news consumption:
Trust in news increased globally over the past 12 months, in Australia trust in news has risen to 43%, close to the global average (44%). The improvement in trust likely reflects the public’s greater reliance on news in a crisis, and the active dissemination of official health advice by news outlets during the pandemic…However, the peak in trust associated with news reporting about COVID-19 at the start of the pandemic (53%) has not been sustained.
1.5
In its digital platforms inquiry report, the ACCC stated that the closure of Australian and local newspaper titles between 2008-09 and 2017-18 resulted in a 15 per cent net total decline in regional newspapers. Emerging from these closures were 21 local government areas without a single or regional newspaper, 16 of which were in regional Australia. There were 106 closures over the period, with 85 per cent of these related to titles owned by major national media publishing groups.
1.6
However, the Public Interest Journalism Initiative (PIJI) said that there were 400 changes in two years, which included both market growth and market contractions:
Recent events which have included bushfires and COVID-19 have exposed news’ vulnerability … COVID-19’s economic shock has dried up remaining advertising revenue from sectors such as tourism, hospitality and entertainment, resulting in a significant reduction of Australian news production as tracked by PIJI’s Australian Newsroom Mapping Project (ANMP). The map has recorded more than 400 changes in three years, two thirds of which are market contractions – a sharp acceleration from previous ACCC data that showed 106 news closures over a 10 year period (2008-18). PIJI research prior to COVID-19 had also suggested declines in coverage of local government.
1.7
Newspapers in both regional and metropolitan areas have experienced significantly declining revenues for more than a decade. For example, during the 1980s and 1990s the industry encountered a major restructure and consolidation which resulted in the discontinuation of all metropolitan afternoon newspapers and a decrease in the number of titles to less than a third of 1984 figures. In addition, between 1984 and 2011, newspaper circulation dropped from 29 newspapers per 100 persons to around 12.
1.8
The Department of Infrastructure, Transport, Regional Development and Communications (the Department) said that since 2010, real revenue had declined at an average rate of 7.45 per cent each year, which represented a total decline of approximately 57.8 per cent from $5.75 billion in 2010 to $2.5 billion in 2021. The Department said that this was likely to continue:
Revenues are projected to continue declining over at least the next four years, with the impacts of the COVID-19 pandemic further exacerbating these pressures.
1.9
The closure of local newspapers has left members of the public that previously relied on print media for their news feeling mistrust and unattached to their communities. Closures have also resulted in job losses in regional Australia, including editorial roles:
Staff numbers for many digital natives have fallen recently as these companies grapple with similar financial challenges to those facing traditional media businesses. In January 2019, BuzzFeed Australia cut 11 of its 40 staff as part of an attempt to ‘reduce its overall news footprint’. This was part of a global round of job cuts that affected BuzzFeed and other digital natives including The Huffington Post.
1.10
The ACCC found that the rise of the digital platforms contributed to the continuing decline in advertising revenue. The impact of this reduction in advertising revenue is most evident in relation to local and regional news providers, which do not have the large potential audience of metropolitan and national titles. New digital-only publications have not replaced traditional news services and many news media businesses are still searching for a viable business model for the provision of journalism online.
1.11
In May 2021, RMIT and Deakin University released findings of a survey of 4,200 Australian country newspaper readers. Of those who participated, 71 per cent preferred to read their newspaper in print, and 86 per cent of respondents considered print copies of local newspapers an essential service for the community. In addition, 94 per cent of respondents wanted a larger say in the government policies and decisions affecting the future of local newspapers.
1.12
This survey also expressed the strong demand for printed product in rural and regional Australia, with most of its audiences, which include younger generations preferring a printed newspaper. Country Press readers are ‘2.6 times as likely to read their local paper in print than in digital format.’
1.13
In March 2021, the Australian Government implemented a mandatory code, the News Media and Digital Platforms Mandatory Bargaining Code, to support with the stability of public interest journalism in Australia by addressing bargaining power imbalances between digital platforms and Australian news businesses.
About the inquiry
1.14
On 22 December 2021, the Minister for Communications, Urban Infrastructure, Cities and the Arts, the Hon. Paul Fletcher MP, referred the Inquiry into Australia’s regional newspapers to the Standing Committee on Communications and the Arts (the Committee).
1.15
As part of the inquiry, the Committee considered:
The impact of decisions in a number of markets in regional and remote Australia by large publishers such as News Corp and Australian Community Media to suspend publication of print editions;
The extent to which there has been entry into these or other markets by new operators, particularly small businesses;
The impact of the News Media Bargaining Code for regional and remote newspapers; and
The degree to which there has been economic recovery in regional and remote markets from the impacts of COVID, and whether this has led to advertising revenue improving.
Inquiry conduct
1.16
A media release announcing the inquiry was issued on 24 December 2021, calling for submissions to be made by 28 January 2022.
1.17
An online survey was launched on 17 January 2022 to seek views on how Australians living in regional, rural or remote areas accessed news. The closing date of the survey was 11 February 2022.
1.18
The survey received 1,731 responses and included both free-text and multiple-choice questions. A survey summary is available at Appendix C.
1.19
The Committee also invited submissions from over 300 national and regional news providers, agencies, academics, and individuals.
1.20
The inquiry received 63 submissions which are listed at Appendix A.
1.21
The Committee held two public hearings, and a list of witnesses and organisations may be found at Appendix B.
Report structure
1.22
Chapter 2 provides an overview of how regional news is defined and accessed, as well as the role that large publishers play in regional areas. The chapter also discusses the emergence of hyper-local news, the evolution of media in regional areas and how access to regional news is tracked and mapped.
1.23
Chapter 3 considers how revenue sources for regional newspapers have changed as a result of the growth of digital platforms and the impacts of COVID-19, and potential future funding models to support regional papers. The chapter also considers current Australian Government initiatives to support regional newspapers and the growing role of philanthropy in ongoing funding models.
1.24
Chapter 4 considers the growth of digital platforms and the impact on regional newspapers, as well as the development and impact of the News Media Bargaining Code.