Report: UK news industry faces hefty profit losses

According to a new report by strategy consultants OC&C, social media platforms such as Facebook will deprive the UK news industry of as much as £450 million (AU$781m) over the next ten years.

The projected loss is a result of younger generations choosing to obtain their news from cost effective and accessible news outlets, rather than newspapers and other traditional publications.

The share of Britain’s population, for whom Facebook, Apple News and Twitter serve as a source of news, is continuing to rise. The extent of available information and the news distribution strengths of these platforms have seen digital outlets dominate and thrust out physical competitors.

The findings from the report indicate that 67% of over-55s in the UK still embrace and use traditional news brands, while about 41% of under 34s use online platforms as their principal way of getting news.

In light of these trends, approximately 30% of digital annual revenue is projected to be collected by online platforms, suggesting that Facebook and Apple News will take between £200 million and £250 million (AU$347 – $434m) this year, with those numbers set to rise to between £400 million and £450 million (AU$695 – $781m) from 2026.

The current course of the news industry suggests that the key link between news content and consumers will continue to challenge and uproot traditional mediums as emerging younger generations take advantage of the increasing prevalence of free news services.

Locally, social media’s presence and impact is just as eye-catching. Statistics from a Sensis Reportin Australia show that 40% of social media users in 2015 used these services to get information on news and current events.

Furthermore, the intensity of social media use is rising in Australians with 24% of users claiming to access social media more than five times a day, up from 19% in 2014, highlighting the potential for news consumption through these outlets.

The report in the UK from OC&C highlights the similarity of the issue to the evolving state of the music industry. In fact, the projected numbers in the report are based on the impact of platforms on other mature media markets, particularly the music industry.

Worldwide music consumption has seen a comparable shift from long-established mediums to digital platform alternatives in recent years.