Innovating Amidst Challenges: What's Driving Revenue for U.K. Independent News Outlets?
The independent news sector in the U.K. is facing significant challenges, with low revenue and limited resources hindering their ability to innovate. According to the Public Independent News Foundation's (PINF) third annual index of the independent news sector, these outlets are finding new monetization opportunities while grappling with inflation and declining grant funding.
On average, U.K. independent news outlets are experiencing a nearly 20 percent increase in revenues compared to the previous year. However, there is a stark difference between for-profit and nonprofit organizations. Independent publishers, utilizing a "trimmed mean" methodology (which refers to “a method of averaging where a specific percentage is trimmed off from the lowest and highest value before the mean is calculated”), are just about breaking even with an annual revenue of £89,000. Advertising accounts for half of their revenue, while readership and grant funding each contribute a fifth, usually, even despite decreased grant funding across the sector. The remaining six percent comes from various sources such as content commissioning, training, syndication, speaking fees, merchandise, and events.
One such publication, Greater Govanhill, a Glasgow-based Community Interest Company (CIC), relies on producing a certain type of content in order to remain eligible for grants.
"We operate in a way that is impact and values-driven, so we can go after grant funding typically reserved for charities but also CICs," says Rhiannon Davies, founder of Greater Govanhill. "Our mission is to do with platforming different voices, challenging negative stereotypes, breaking down cultural barriers and bringing people together. A lot of those aims fit in with foundation grant funding. Although a lot of those aims are not seen as journalistic aims, the projects we do to meet those aims are still journalistic."
Operating on limited budgets, independent publishers allocate a substantial portion of their outgoings to staffing, with an average expenditure of £90,500 (other expenses include technology, office space, and administrative costs). Notably, marketing remains an overlooked aspect, despite its crucial role in audience growth. The lack of marketing investment in the news hampers the ability of independent outlets to reach wider audiences. To overcome this, Jonathan Heawood, the director of PINF, said that other entities should step in to raise funding: "It’s unfair to lay all the responsibility on local independent news organizations. Big media, governments and philanthropists are needed. We should support the ecosystem with targeted investment funds.”
Independent publishers in the U.K. are sure that they can make a difference, despite financial challenges—they score themselves an average of 68 out of 100 in terms of their social impact.
"Local journalists are subsiding their communities because they are working longer hours than they need to for less pay," says Sameer Padania, the team lead of the local plans news project for PINF. “Developing countries have been dealing with this viability crisis in local journalism for a while. This is a relatively new problem in the UK."
Print may also have a role in keeping outlets’ revenue up. For example, Hackney Citizen, a fortnightly print newspaper, defies expectations with a lucrative print-centric business model. Despite having no significant online presence, it generates £250,000 in turnover primarily from print advertising and receives £20,000 annually from donors. Print ads have experienced a decline post-pandemic, but print ad companies were able to strike agreements (like the one with Hackney Council), that have given them some slight stability and revenue gains. Nonetheless, the publication is exploring a digital future. "We currently give all our content away on print, so that would be quite a drastic move for us," Magnum says.
Newsrooms across the globe are currently doing gymnastics to keep their heads above water—and many are having to get creative with their spending and revenue sources in order to keep cash flowing. Until more large entities, including the government, support local newsrooms, things will continue to move and change financially and could cause ups and downs for any newsrooms that remain active throughout this period of transition for the digital landscape.
