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Lords Committee warns of risks of print industry consolidation
A powerful House of Lords Committee has called for much tighter controls on mergers in the newspaper industry to ensure pluralism of the news, but its verdict has met with mixed reactions from the print industry.
In its report, titled 'The Ownership of the News', the Lords' Communications Committee laid out concerns that the concentration of newspaper ownership in a small number of publishing companies could affect the "diversity" of news.
The report states: "The consolidation of ownership in the media that has taken place over the last years has added to the risk of disproportionate influence being exercised by a small number of companies and owners."
The union Unite backed the report. Steve Sibbald, national officer for Unite, said: "We haven't changed our view in the last 50 years – there's too much concentration in the market."
Sibbald said the union was also very concerned about concentration in the contract printing industry, saying "News International is likely to completely dominate contract printing".
He indicated that it was a very real possibility in the future that "contract printing will be done by just one company".
However, others think that the verdict of the Lords Committee failed to take into account current economic conditions and that market forces are likely to drive further consolidation.
Nick Hood, senior partner for corporate legal specialist Begbies Traynor, said: "The Lords' suggestion flies in the face of commercial situations. Sometimes there is a natural commercial selection to survival."
Hood said the disintegration of classified and general ad revenue meant the industry would see "rapidly increasing failure in small and medium sized companies and some surprising failures up the scale".
"It reminds me of King Canute and the tide," he said. "If financial conditions are so bad, you get enforced consolidation not strategic consolidation. Whether politicians like it or not that is going to happen."
At present, Johnston Press, Newsquest, Northcliffe and Trinity Mirror control 70% of local and regional press in terms of overall circulation, while Rupert Murdoch's News International has a 35% slice of national newspaper circulation.
Sibbald: there's too much concentration in the market
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Comments
Colin Thompson - 02 July 2008
There will be more consolidation for businesses to survive - this is the real world!
Wake up Sibbald and the Lords' Communications Committee to the world of business!
Colin Thompson
Cavendish
www.cavendish-mr.org.uk
Jon Fennell - 02 July 2008
In this case survival at what cost.
The social balance is held by a handful of publishers, who each have there own polictical bias.
The balance of power held by media is already too high, and the ability to topple government should not be under estimated. Free speech also could well be stifled as reporting could become 'restricted'.
If NI was to buy out Trinity (as an arguement), the effect on reporting could result in one sided viewpoints, which could weaken the real case.
Consolidation in this area should be controlled for all our well beings. In other areas as with retail, paper ect. its inevitable, the only losers are people who want to make a choice and be sure they have a competitive price.
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